Nov. 18–U.S. Sen. Bill Cassidy of Louisiana is cosponsoring legislation that would lease unused space in the nation’s emergency oil storage system to help pay for its maintenance and operation.
“If the tanks are empty, let’s put them to use,” Cassidy, a Baton Rouge Republican, said in a news release. “The Strategic Petroleum Reserve is crucial for our national security, and this will help keep it in good working order and save taxpayers money at the same time.”
Cassidy and Sen. Michael Bennet, D-Colo., introduced the Strategic Petroleum Reserve Reform Act last week.
“This pragmatic solution shows that lawmakers can work across the aisle to craft energy policy that puts money back into people’s pockets,” Bennet said. “We need more bipartisan efforts in Washington that save taxpayer dollars.”
Congress created the emergency reserve after the U.S. oil embargo of the 1970s disrupted imports, causing shortages and higher prices for gasoline and other fuels. The reserve stores oil in 62 salt caverns at four sites across south Louisiana and Texas. It now has a capacity of 713.5 million barrels and an inventory of about 660 million barrels.
Proponents contend increased domestic production and lower imports in recent years have diminished the need for the emergency oil stockpile.
But critics have long complained that Congress and presidents have tapped oil from the reserve for political purposes rather than the security and emergency reasons for which the system was established.
“Conducting such drawdowns on a regular basis for the purpose of raising revenue may affect the ability of the reserve to achieve its true purpose, of providing for energy security, in the event of an actual emergency,” a 2015 report prepared for the Senate Energy and Natural Resources Committee says.
It also notes that repeatedly pumping oil from the reserve, meant for long-term storage, can weaken the salt caverns’ integrity, raising maintenance costs and environmental risks.
Congress considered expanding the reserve amid the wars in Afghanistan and Iraq, launching studies of several potential sites in 2005. They included one in the Terrebonne Parish community of Chacahoula and another in Clovelly in south Lafourche. But Congress abandoned those plans in 2011.
“The project is a reminder of how quickly oil market conditions can change,” the report notes.
Congress and President Donald Trump approved a budget in February that orders the sale of 100 million barrels of the Strategic Petroleum Reserve by 2027 to help fund the federal government. It was labeled the largest sale from the reserve for non-emergency purposes, about 15 percent of the stored oil, and was estimated to raise about $6.8 billion.
As the U.S. Energy Department withdraws oil to meet Congress’ mandated sales, roughly 45 percent of the reserve’s storage capacity will be unused, Cassidy and Bennet said.
Their legislation would authorize the Energy Department to conduct a pilot program to lease spare capacity to companies and foreign governments. The senators contend it would help “preserve and maximize the strategic value of this important energy security asset.”
The legislation requires the U.S. energy secretary to ensure that any lease “will not impair the national security of the United States or its ability to use the SPR.”
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