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The Honolulu Advertiser
Updated at 2:57 p.m., Monday, March 31, 2008

Abercrombie wants reserve oil released to help airlines

By Dennis Camire
Gannett News Service

WASHINGTON — Citing the toll of high fuel prices on the nation's economy and airlines like Aloha, Rep. Neil Abercrombie, D-Hawai'i, called Monday for the release of crude oil from the Strategic Petroleum Reserve to help bring down the fuel prices.

"Right now — today — our nation is reeling from the impact of an energy crisis on a U.S. economy already in or on the verge of a recession," said Abercrombie in a letter to President Bush, who controls the reserve. "Add to this the highest fuel prices in history ... and the impact on a petroleum-fueled economy is devastating."

Abercrombie said crude oil prices have hit $110 a barrel and AAA reported Monday that gasoline had hit a historic high, averaging $3.29 a gallon nationally for unleaded regular.

Hawai'i residents paid an average of $3.65 a gallon for unleaded regular Monday, just short of the $3.68 record set in 2005, according to AAA.

Aloha Airlines cited soaring fuel prices as part of the reason for its shutdown.

Abercombie wants Bush to release some crude from the reserve, which contains about 700 million gallons with an average cost of about $27 a barrel.

That release could generate a temporary supply of lower-priced gasoline, diesel fuel and jet fuel, Abercrombie said.

The law authorizes a release if the president determines certain criteria are met, including a severe price increase that is likely to have a major impact on the economy, Abercrombie said. Currently the government is adding crude to the underground reserves, which are almost full.

"This step offers the prospect of temporary relief and should not be seen by anyone as a long-term solution to the national emergency," Abercrombie said.

Other members of Hawai`i's congressional delegation also were searching Monday for ways to respond to Aloha's shutdown.

Rep. Mazie Hirono, D-Hawai'i, a member of the House Transportation and Infrastructure Committee, said she has discussed Aloha's closure with the committee chairman, Rep. James L. Oberstar, D-Minn.

"I will continue to explore all actions and options available at the federal level, as well as support the state Legislature's ongoing efforts to find a viable way to keep Aloha Airlines in business," she said.

Sen. Daniel K. Inouye, D-Hawai'i, chairman of the Senate Commerce Committee with jurisdiction over aviation, is working to ensure that Aloha employees who were put out of work have access to all federal protections and programs available, said Jennifer Sabas, the senator's chief of staff.

The senator also will examine the financial state of the aviation industry, in particular Aloha, and the federal role in providing a reliable air transportation system, free of predatory pricing and unfair competition, in a time of increasing fuel costs, Sabas said.

"This may include the convening of a hearing in the weeks ahead," she said.

Aloha has a lawsuit pending against Mesa, alleging unfair pricing practices.

Abercrombie said rising petroleum costs have prompted other airlines to raise ticket prices or add a fuel surcharge.

The problem also affects the nation's motor carriers, whose fuel costs account for as much as 25 percent of their operating expenses. The additional costs already are being passed along to consumers through higher food and retail prices, Abercrombie said.

Reach Dennis Camire at dcamire@gns.gannett.com.