Nick Snow
Washington Editor
WASHINGTON, DC, May 16 -- The US Department of Energy said that it will not sign contracts to continue filling the Strategic Petroleum Reserve from July through December.
The May 16 announcement came 2 days after the US Senate passed the House's version of legislation suspending SPR purchases for the rest of the year unless crude oil prices fall below $75/bbl (OGJ Online, May 14, 2008). The measure, which was sent to the White House, passed both chambers by big enough margins to assure that a presidential veto could be overridden.
DOE said the suspension means up to 13 million bbl of crude won't be added to the SPR. It said that it received bids on May 13 in response to an April solicitation for delivery of 76,000 b/d of federal royalty crude. The contract would have run from July 1 through Dec. 31, with deliveries beginning in August.
The solicitation was issued in accordance to provisions of the 2005 Energy Policy Act which directed DOE to fill the SPR to its authorized size of 1 billion bbl, the federal department said.
US House Speaker Nancy Pelosi (D-Calif.) said the bill will be waiting for President George W. Bush's signature when he returns from the Middle East.
"In the past, when the SPR has been tapped or deliveries suspended, consumers saw real savings. As the price of oil has reached more than $127/bbl, this is a critical first step for America's families, businesses, and our economy. It makes no sense to buy oil and put it in the ground when prices are at record highs. The president should sign our legislation to codify this common-sense approach," she said on May 16.
Contact Nick Snow at nicks@pennwell.com.