Below is text of the letter:
July 8, 2008
The Honorable George W. Bush
The President of the United States
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mr. President:
The severe energy price crisis facing millions of Americans compels strong presidential action to assist consumers and strengthen the economy.
Two months ago, after initially opposing our proposal to suspend government purchases of high-priced oil for the Strategic Petroleum Reserve (SPR), you signed our bipartisan legislation into law.
But further action is needed to protect our economy. I call on you to use your authority as President to draw down a small portion of the oil held in the Strategic Petroleum Reserve in order to expand available supplies and help reduce the record prices that are helping push the economy toward recession.
Since your Administration took office, the price of oil has increased from less than $30 per barrel to a recent record high of nearly $150, and the price of gasoline has risen from $1.47 per gallon to a record high of $4.11 per gallon. The destabilizing impact of these price increases, driven both by market forces and by excessive speculation, have been devastating to tens of millions of Americans and businesses - and to our larger economy as a whole. These are the kinds of circumstances, in addition to national security conditions, in which utilization of the Strategic Petroleum Reserve is more than justified.
As you are aware, there is nothing new or untested about releasing oil from the Reserve or deferring purchases during times of economic instability. You have done it yourself - as have President Clinton and President George H.W. Bush:
1990-1991 Desert Shield/Storm Drawdown. President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War on January 17, 1991. The administration conducted a 4 million barrel test sale in August 1990 and a Presidentially-ordered drawdown of 17 million barrels in January 1991. According to the Energy Department,
"The rapid decision to release crude oil from government-controlled stocks in the United States and other OECD countries helped calm the global oil market, and prices began to moderate. When the 1991 SPR drawdown was announced in conjunction with Operation Desert Storm, the price of oil immediately dropped $8 per barrel." [Emphasis added, White House 2003 assessment of SPR]
2000 Swap in the Face of Rising Prices. In late 2000, President Bill Clinton authorized a swap of oil in which 30 million barrels were released from the SPR to address rising oil prices and alleviate the threat of a home heating oil crisis due to low inventories. The MIT expert testified:
"The results were immediate, in spite of the fact that oil prices had not yet moved into the market - demonstrating the psychological impacts on the market when the U.S. signals its intention to act. . . By the end of the year, actual oil prices had dropped from $30.94 to $20.38 per barrel, a 34% decrease." [Emphasis added, Testimony of Melanie Kenderdine, Select Committee on Energy and Global Warming, 4/24/08]
2005 Hurricane Katrina, Drawdown. Your Administration also offered 30 million gallons of SPR oil (only 11 million gallons were actually withdrawn), helping reduce crude prices by about $5 a barrel. [Investor's Business Daily editorial, 3/8/08]
Releasing oil from the Reserve is a tool to manage our national and economic security, and when judiciously used will in no way jeopardize national security. The Reserve is currently 97 percent full - the highest level ever - with enough oil to meet our national security needs. We have more oil in the SPR than we did in 2006 (702 million barrels vs. 688 million in 2006) when you deferred deliveries stating: "Our Strategic Reserve is sufficiently large enough to guard against any major supply disruption over the next few months."
The current inventory exceeds our International Energy Program commitment to maintain at least 90 days of oil stocks in reserve (when you include private and public stocks, as other countries do).
According to the U.S. Department of Energy, oil from SPR deployment can enter the market 13 days after a Presidential decision. Deploying a small portion of the resources in the SPR would provide much needed assistance to American consumers facing record prices and help our economy during a serious period of instability. I strongly urge you to use every available tool, including deployment of the SPR, to provide timely relief for American consumers and businesses.
Thank you for your consideration of this urgent request.
Best regards,
NANCY PELOSI
Speaker of the House
SOURCE Office of the Speaker of the House
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