News
Fuel surcharge bill passes House
But the rest of story will have to wait

Despite a twice-delayed deadline, Land Line heads to press without the conclusion of what may be the most critical story of the year. On Oct. 10, the U.S. House of Representatives approved HR4441 (the fuel surcharge bill) on a voice vote. The bill, known as the Motor Carrier Fuel Cost Equity Act of 2000, passed on to Senate for consideration but as of Oct. 27, 6 p.m. CST, lawmakers had not voted on the bill.

The legislation was introduced by Rep. Nick Rahall (D-WV) and co-sponsored by Rep. Roy Blunt (R-MO) at the request of the Owner-Operator Independent Drivers Association. OOIDA has been lobbying hard for the bill's passage since March, when truckers rallied in Washington, DC. The measure would trigger a mandatory fuel surcharge when fuel prices spike and assure that the surcharge be passed on to the bearer of the cost of the fuel.

It was brought to the full House by Chairman of the Transportation and Infrastructure Committee, Rep. Bud Shuster (R-PA). Sponsor Rep. Rahall asked his fellow lawmakers to "strike a blow for the little guy" and pass the legislation. Co-sponsor Blunt told House members prior to the vote that independent owner-operators were the "indispensible engine that drives this economy."

Support for the bill was expressed by Chairman of the Ground Transportation Subcommittee, Rep. Thomas Petri (R-WI) and Rep. James Oberstar (D-MN), ranking minority member of the T&I Committee. Oberstar urged passage of the measure, saying "independent truckers should be treated fairly when the nation faces the kind of fuel price spikes we have been experiencing. This bill goes a long way to provide the kind of relief these hard-pressed and hard-working men and women need in these difficult times."

The bill passed the House without a single objection. While OOIDA's president, Jim Johnston, credits the strong bi-partisan efforts of Congressman Rahall and Blunt, he says much of the overwhelming support for the bill has been generated by the persistance of thousands of truckers.

"This could be a long hard winter, with high-priced fuel and possible shortages," OOIDA's Jim Johnston said. "Nobody has worked harder to head off the problem than the members of OOIDA who have saturated Congress with letters and phone calls. It is important for all small-business truckers to exercise this same determination in demanding adequate compensation for every load they haul."

Editor's note: At press time, the word in DC was that Congress, originally due to adjourn on Oct. 6, may not call it curtains until Oct. 31. For those of you who are online, watch our web sites, www.ooida.com and www.landlinemag.com. Or call OOIDA at 1-800-444-5791.

Tap the reserves?Any more bright ideas?

by Sandi Soendker
Managing Editor

Since spring, the American Trucking Associations (ATA) had been urging the administration to tap the Strategic Petroleum Reserve (SPR) as a solution to the fuel crisis for truckers. ATA President Walter McCormick told the government that opening the reserve would bring prices down quickly, increase supplies and send the OPEC oil cartel the message that they cannot hold the U.S. economy hostage.

Last month, McCormick's wish came true. The Clinton administration decided to release 30 million barrels of emergency crude oil from the stockpile to head off a fuel crisis. The first shipment of reserve oil, 500,000 barrels, began moving out of the reserve in early October and more moved out before Nov. 1. But where is it going?

Europe - that's where some of it is going. And the reason is, the oil is going to oil companies, who sell the oil. And the European market will pay more for it than U.S. consumers will. And that's the American way.

On Oct. 9, CBS news' Jacqueline Adams told viewers "(Gore and Clinton) said (they) released oil from the country's strategic reserve to help Americans get through the winter months, but most of the newly-released oil may never heat American homes."

American consumers were horrified. On Oct. 19, PRNewswire's article "Gore Oil Ploy Sends U.S. Oil to Heat European Homes" was snatched up by national media. The article questions if Americans will feel the effect of any relief at all. According to PRNewswire, Clinton-Gore officials now acknowledge that as much as two-thirds of the extra home heating oil refined from government crude may go to Europe, never reaching U.S. consumers. All this, despite the urgent need for home heating oil in parts of the Northeast.

How could this happen?

"The execution was flawed - there was no contractual obligation that crude oil released from the Strategic Petroleum Reserve be refined or that it not be exported," Energy panel chairman Sen. Frank Murkowski said during a recent Senate hearing on the release of the oil.

The DOE, who estimates the 30 million-barrel release will add about 10 million barrels of crude oil to U.S. supplies, has been criticized for the way it organized the bidding and awarding of oil from the stockpile. At a similar hearing in the House of Representatives, Republicans on the House Energy and Power subcommittee voiced concerns about the timing of the SPR release. Rep. Thomas Bliley (R-VA) and others expressed views that the reserve was made for emergencies as opposed to politicizing.

"One thing is for sure. This unprecedented action so close to the presidential election is troubling," said Bliley.

Nobody said it better than Jerry Thompson, senior vice president for CITGO Corp, who told the Senate panel that U.S. refineries were running at almost full capacity, and have little room to even process more crude.

"Introducing more crude into the market from the Strategic Petroleum Reserve will have the effect of lowering crude and refined product prices, but will not increase the availability of refined product, in this specific case home heating oil, into the market," Thompson said.

He also said that while the release of stockpiled oil had pushed down U.S. petroleum prices, it was now more profitable for American firms to ship the products overseas where they earn a higher profit.

"This was perhaps an unintended consequence, but not wholly unexpected given the way market forces operate. Goods and services are bid away by those who value them higher," he said.

The DOE plans to release the remaining 22.3 million barrels of oil awarded to bidders by the end of November.

ATA's McCormick refused to support OOIDA's fuel surcharge legislation, a fact that rankled truckers. The reason ATA stayed neutral on the surcharge was said to be due to split views within the ATA membership. Some wanted it, some didn't. "If that's ATA's reason for staying neutral," said OOIDA's Todd Spencer, "does that mean there was no opposition within their membership to tapping the reserves?"

The fuel surcharge bill, HR4441 was unanimously approved by the House on Oct. 10, but as of Oct. 27, had not secured a Senate vote.

World fuel crisis update

Turmoil continues as trucking communities worldwide deal with the threat of high-priced and possibly inadequate fuel supplies.

In Australia, truckers are calling for higher freight rates, an investigation into fuel pricing and fuel price cuts. Truckers say they are on the road to financial ruin and have to run more freight to meet rising fuel costs.

In October, truckers in Romania, Canada and Chile made front page news with protests. In mid-October, the strike of Greek truckers caused half the gas stations in Greece to be closed. Also, in Sicily, truckdrivers blocked roads across the island as well as ports and refineries, protesting high costs of diesel.

Argentina's National Transport Confederation began striking on Oct. 1, demanding cheaper diesel fuel. The protest sharply cut the number of trucks on the road, impeding the flow of cattle throughout the nation, which is the world's fourth largest beef exporter. The government has vowed not to bow to demands for cutting diesel fuel prices.

Keith Goble, staff writer

March/April
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