Washington (Platts)--6Feb2008

A senior US Democratic senator on Wednesday criticized the Bush
administration's proposal to double the capacity of the Strategic Petroleum
Reserve to 1.5 billion barrels, saying current prices are too high to put oil
back in the ground.

At a Senate Energy and Natural Resources Committee hearing on the
administration's fiscal 2009 budget, Senator Byron Dorgan, a North Dakota
Democrat, told Energy Secretary Samuel Bodman that expanding SPR when crude
oil prices are at near record highs does not make sense.

"You're driving up the price of gasoline," Dorgan told Bodman. "We ought
not to do this. It's not a good idea to take [oil] off the market at $100 a
barrel and put it underground." Dorgan told the secretary he plans to
introduce a bill later Wednesday to force the department to stop adding oil to
the reserve.

"Your position is to top [the SPR] off," Dorgan said. "My position is to
[make it] stop."

Bodman defended DOE's SPR plans, telling the committee that many people
are buying oil at the current price of about $88/barrel. "Yes, investment
bankers," Dorgan replied. "Every bubble bursts, and this bubble will burst
also."

"Why not be cautious?" Dorgan asked Bodman. "You're not dong [this] with
your own money.

"There is room, in my judgment, on this, and that's my view," Bodman
said. He and Dorgan agreed to talk more about the SPR issue in separate
meetings.

--Dipka Bhambhani, Dipka_bhambhani@platts.com