THE WHITE HOUSE
Office of the Press Secretary
REMARKS BY THE PRESIDENT ON THE STRATEGIC PETROLEUM RESERVE The South Lawn
9:30 A.M. EDT
THE PRESIDENT: Good morning. Yesterday I directed the Secretary of Energy to exchange 30 million barrels of crude oil from the Strategic Petroleum Reserve over the next 30 days.
As it stands, overall heating oil inventories are more than 20 percent lower than they were last year; 50 percent lower on the East Coast; more than 60 percent lower in New England. The underlying cause of low inventories is the high price of crude oil.
The overriding purpose for our action is to increase supply and help consumers make it through the cold winter. Families shouldn't have to drain their wallets to drive their cars or heat their homes.
I would also note that this action will result in more oil in the reserve. This is a swap. And the reserve will be replenished along with a premium, further increasing our long-term protection against energy supply disruptions. This is the right thing to do. It's good energy policy, good national security policy, and good family policy.
Today I'm announcing new actions to help make sure that heating oil is available and affordable for our families. First, I'm directing the Department of Health and Human Services to release $400 million in low-income home energy assistance program funds; the largest ever emergency funding release of its kind to help families who can least bear the burden of high energy prices this winter.
Second, I'm asking the EPA to help states identify ways to use more and different kinds of home heating oil while minimizing environmental consequences. This could help to further build home heating oil inventories.
Third, I am directing Federal agencies to make early contractual commitments to purchase heating oil throughout the winter so the wholesalers will have the confidence to build inventories in advance.
Fourth, I'm asking state public utility commissions to ensure that factories and businesses that use heating oil as a backup fuel keep adequate reserves.
And finally, Secretary Richardson will meet with the National Petroleum Council, an energy policy advisory committee, to discuss heating oil production this fall and winter. Taken together, these steps will enhance our nation's energy security and help to cushion working families from high heating bills. It builds on our decision in July to establish a home heating oil reserve in the Northeast.
Now, we've also taken some important steps to strengthen our long-term energy policy. To ease reliance on imported oil we've invested in new technologies to enhance recovery of domestic oil reserves. And they are quite promising. To promote clean energy alternatives we've expanded research and development of solar, wind, bio-fuels and other renewable resources.
We have also expanded research in the development of alternative forms of engines, including fuel-cell engines and engines that run on both electricity and gasoline, or electricity and other fuels. To save energy and tax dollars we have taken dramatic steps to reduce energy use in the Federal Government, America's largest consumer. By making our Federal buildings more energy efficient we will reduce electricity consumption by 30 percent, saving taxpayers $800 million a year.
We've adopted energy efficient standards for appliances and forged new alliances with industry, including the partnership for a new generation of vehicles, and the 21st Century Truck Initiative. We're on track to tripling the milage of passenger vehicles, and more than doubling the milage of medium and heavy-duty trucks. We have made headway. But too many critical elements of our energy strategy have been chopped, blocked or ignored by the Republican majority in Congress.
I proposed electricity restructuring legislation, they abandoned it. And for every new dollar we have sought to invest in clean, efficient sources of energy they have provided the dime. Today I urge Congress to get off that dime and take action.
Take up my energy budget initiatives and tax incentives to help families and businesses buy fuel saving vehicles, and energy efficient office buildings and homes and appliances; fully fund development and research into clean energy technology; provide clear guidelines for using home heating oil reserves when we need to; reauthorize the strategic petroleum reserve and stop trying to make this about drilling in the Arctic National Wildlife Refuge.
We cannot achieve energy security by endangering the environment, denying critical funding, or delaying vital action. We ought to do something more than offer cold comfort to people who simply want a warm home.
Once again, I ask Congress for its support. We can work together. There are many things that we can do. If you look -- let me just emphasize this because it always gets overlooked every time an energy issue comes up -- just look at what we have done with immediately available technologies to reduce energy consumption in the Federal Government. If we did the same thing throughout the domestic and the business sectors of the American economy, using off-the-shelf technology with a two year or less pay off -- if we did it throughout the economy you would see reduced reliance on foreign oil, lower fuel bills, higher productivity and more jobs in the American economy.
But we need help from Congress to give people the incentives to do the kinds of things that we're already doing throughout the Federal Government and that many, but nowhere near enough, businesses and consumers are doing.
So I hope we can get some action on the long-term issues as well. But I believe we have done the right thing with the petroleum reserve.
Q Mr. President, I was wondering how you would respond to critics, like to Speaker Hastert, Governor Bush, who say this is really politics, this is more about the ballot box than it is the gasoline prices?
THE PRESIDENT: Well, first I would say I doubt if they are relying on home heating oil this winter. If you look at it, the reason that the prices got so high is that the supplies got so low. And what we're trying to do here is to even out supply and price. We're in an unusual situation, I might add, where if you look at the projected price of oil for next spring, it's actually lower than it is now.
Now what does that indicate? If people believe that the price of oil is going to go down in several months, why is it so much higher now? It must be because there is a supply shortage in the stocks and reserves. So what we decided to do, after debating this for weeks, and looking at all of our options, was to have a release from the petroleum reserve, and to do it in the form of a swap. So we release the oil now, and then those who get it will replace it next spring when the oil is projected to be more plentiful, and therefore much cheaper.
So what we're trying to do is to compensate for the fact that the stocks are too low and the price is too high now, and to get the oil back into the reserve in the springtime, when the stocks are supposed to be higher and the price is supposed to be lower. I think it's plainly a prudent thing to do.
Who else had a question?
Q When do you think prices are going to come down?
THE PRESIDENT: Well, I think -- haven't they dropped almost three dollars a barrel in the last two days? I think they've dropped quite a bit just in the last couple of days, and former Secretary Rubin used to say, markets go up and markets go down; it's hard for me to know. All I can tell you is, I think this is a prudent thing to do to increase stocks for the winter, and to try to make sure it has a moderating effect on prices, but basically, to deal with the supply issue. And normally, in a market situation, the price will follow. That's what I hope will happen here.
But I will say again, I think it is important that we accelerate the long-term issues. But if you look at the things that are out there now that are available for us, if you look at how close we are to breaking the chemical barriers, to the efficient production of bio-fuels, and all these other things that we're working on -- if you look at how close we are to having a truly affordable, efficient fuel-cell vehicle, all these things are out there. We should be accelerating efforts into where we know the future is. And if we do that, we will reduce the number of these instances that the United States and the world will face in the future.
Thank you very much.
Q Can you say anything about Martin Indyk, Sir?
THE PRESIDENT: No, I have nothing else to say, except I've got to go to California. If you want to come, you're welcome to do it. I think some of you are coming with me.
9:44 A.M. EDT