Graves Urges Bush to Release Strategic Oil Reserves

American Trucking Associations President Bill Graves has urged President Bush to release oil from the U.S. Strategic Petroleum Reserve to combat surging diesel fuel prices.

Graves made the plea in a Feb. 7 letter to Bush, which was the second time in less than a month that the head of ATA has written President Bush about the fuel price issue.

On Jan. 13, then-ATA President William J. Canary said that because of already tight supplies and market conditions including tensions in the Middle East, motor fuel prices were likely to keep rising (Click here for related coverage.). He asked Bush to “watch this situation closely and take steps necessary to keep escalating diesel fuel prices under control, like potentially using the Strategic Petroleum Reserve.”

Graves wrote that in the period between the earlier ATA letter and his own, new increases in fuel prices had cost the trucking industry an additional $35 million. And Graves’ comments were written before the Department of Energy reported Feb. 10 that the average diesel price had shot up another 12 cents per gallon.

Graves urged Bush more directly to release oil from the SPR, partly to cool prices before a U.S. invasion of Iraq might send them even higher.

“Knowing what the current conditions of the crude oil and distillate markets are, we believe a release from the Strategic Petroleum Reserve may be the best option to avert a potential crisis in the domestic refinery system as a result of extremely tight crude oil stocks,” Graves said. “Releasing crude from the SPR will help inventories grow and reduce pressure on crude prices, thus lessening the magnitude of a potential price increase should it be necessary to invade Iraq.”

Graves thanked Bush for taking the step of delaying planned deliveries of more oil to the national stockpile, which has the effect of leaving more in the market. But he said that an unusually cold winter in the U.S. and a strike in Venezuela have reduced supplies of crude oil and of fuels like diesel and gasoline.

In his Jan. 13 letter, Canary had said the diesel price was averaging about $1.50 per gallon. Graves referred to the Feb. 2 price of $1.542. DOE said the average pump price on Feb. 10 was $1.662.

I>By Sean McNally

I>Staff Reporter

(Click here to read the full letter from Graves.)

(Click here to read the full letter from Canary.)