US Lawmakers Return to SPR Well

US lawmakers looking for ways to fund their legislative initiatives are once again returning to the well of the Strategic Petroleum Reserve (SPR), mandating additional sales from US emergency crude stocks to raise cash in the bipartisan infrastructure bill currently under consideration. Since 2015, Congress has outlined sales of more than 270 million barrels, according to a compilation by the Congressional Research Service. Combined with the 87.6 million bbl in sales laid out in the bipartisan package published Sunday (OD Aug.2'21), the SPR’s crude reserves would be reduced to just over 300 million bbl by the end of the 2031 fiscal year -- less than half its capacity of some 700 million bbl. The US SPR is part of a global supply security system under the umbrella of the International Energy Agency (IEA), which tells countries to hold at least 90 days of net imports in storage to protect against supply disruptions. “The SPR is an oil security insurance policy, and lawmakers appear to believe that the US is carrying too much insurance,” said Kevin Book of DC-based consultancy ClearView Energy. Congressionally mandated sales are set to accelerate in the middle part of the decade, ranging from 34 million-43 million bbl in 2023-27. Sales in later years, such as those called for beginning in fiscal year 2028 in the bipartisan package, adds up to more revenues in the congressional budget scoring process, Book points out. Increased US output has reduced US imports in recent years, and expectations over how much oil the US needs in the future is changing, said oil economist Philip Verleger. “Sooner or later we're not going to need [the SPR] because we're not going to be using so much oil," said Verleger. "And the auto industry is going to make it sooner rather than later because they're pushing electric vehicles" (OD Jan.28'21). US Sells Off Strategic Petroleum Reserves (million bbl) SPR Start