House bid to sell oil from reserve fails
WASHINGTON (Reuters) - The House of Representatives on Thursday failed to pass legislation intended to cool off gasoline prices by requiring the government to sell 70 million barrels of light sweet crude oil from the Strategic Petroleum Reserve, the national stockpile.
Democrats had pushed the legislation, hoping to lower surging oil prices by putting more of the reserve's light sweet crude, sought by refiners, on the market. Sweet crude is desirable because it has less sulphur and is more easily refined into gasoline, diesel fuel and other petroleum products.
The White House had threatened to veto the measure, arguing that Congress should work toward increasing domestic supply rather than tap into a strategic reserve.
Although the House voted 268 to 157 in favor of the legislation, the measure fell short of obtaining the two-thirds "yes" vote that is required when the chamber suspends its rules to act quickly on a bill.
Soaring energy costs have lawmakers scrambling to introduce legislation showing their constituents they are addressing the issue. Republican lawmakers have mostly pushed for increased domestic production by lifting bans on drilling offshore and in the Arctic National Wildlife Refuge, and oil shale development in the Midwest.
Democrats, however, have pushed for oil companies to drill on land already available under government leases to search for oil and tapping the SPR.
The bill would have forced the sale of 10 percent of the emergency stockpile's holdings, or 70 million barrels, on the open market over six months. Proceeds from the sales would have been used to buy an equivalent amount of heavy crude, which is cheaper.
Under the suspension of the rules, Republicans were blocked from amending the bill. Republicans say they had enough votes to pass the bill with an amendment lifting the ban on offshore drilling, which the Democratic leadership opposes.
Rep. Joe Barton, a Texas Republican, called the bill a "gimmick" that would provide only short-term relief for Americans from high energy costs, if any.
"If it has a temporary price decrease, that's a positive," Barton said. "But it's temporary because you're not changing the fundamental supply/demand equation on the world oil market."
Democrats disagreed. "The fastest way to help the consumer is to release the oil from the Strategic Petroleum Reserve," House Speaker Nancy Pelosi said on Thursday.
In May, Congress passed a law forbidding the Bush administration from adding oil to the stockpile until crude prices drop below $75 a barrel. Previously, the government had been adding an average of about 70,000 barrels of oil a day to the reserve, which is 97 percent full.
The stockpile, created by Congress in the 1970s after the Arab oil embargo, holds oil at four underground storage sites in Texas and Louisiana.
U.S. oil futures gained $1.05 to close at $125.49 a barrel on Thursday, off a high above $147 earlier this month.
(Editing by Matthew Lewis))
