In a letter to Energy Secretary Bill Richardson, Grassley said, "the president has the power to use the reserve when a very sharp increase in petroleum prices threatens economic stability. The current situation may meet this test. At the very least, the option should be heavily weighed."
Grassley emphasized that Iowa farmers and truckers need large quantities of fuel to make their living. "Crude oil prices are at levels we haven't seen since the Gulf War, and the result is dramatically higher prices for diesel fuel and gasoline. Diplomatic efforts may be underway, but American workers and the consumers who will ultimately be affected need this problem addressed promptly," he said.
Grassley also said he would be contacting Washington representatives of OPEC members, urging them to reconsider the production quotas established in March 1999. The resulting lower supply levels of oil have driven up the price of fuel in the United States. The problem was further exacerbated by severely cold January weather in the Midwest and on the East Coast.
Earlier this month, the administration delayed delivery of five million barrels of oil destined for the Strategic Petroleum Reserve. Grassley said while this gesture is welcome, five million barrels is only equal to six hours of domestic consumption nationwide. The price and supply impact of this delivery will be limited.
The 11 members of OPEC ? the Organization of Petroleum Exporting Countries ? supply more than 40 percent of the world's oil and possess about 77 percent of the world's total proven crude oil reserves. Algeria, Indonesia, Iran, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela and Iraq today comprise the organization that was formed in 1960.
Grassley is a leading advocate for development and expanded use of renewable sources of energy, especially corn-based ethanol. "Not only is clean-burning ethanol good for the rural economy and the environment, it helps to reduce America's dangerous and expensive dependence on foreign sources of energy," he says.