House panel’s Republicans seek information about DOE’s SPR management

US House Energy and Commerce Committee Republican leaders requested a meeting with US Sec. of Energy Ernest J. Moniz and other appropriate officials concerning management of the US Strategic Petroleum Reserve as the summer driving season approaches.

US Energy Information Administration data show the US has stockpiled more US-produced crude oil than at any time since the Great Depression from the combination of hydraulic fracturing and horizontal drilling in tight oil formations, Committee Chairman Fred Upton (Mich.) and five other members of the majority said in a May 12 letter to Moniz.

DOE’s Mar. 12 announcement that it would draw down and sell 5 million bbl of SPR crude over 30 days marked the first time this authority under the 1975 Energy Policy and Conservation Act has been used, the lawmakers noted. The department’s May 2 announcement that it would create the first federal regional gasoline reserves (OGJ Online, May 5, 2014) also was a departure from current SPR use, they added.

They said DOE’s fiscal 2015 budget request of $205 million for the reserve addresses “several major, yet deferred, maintenance activities.”

These included oil degasification operations; restoration of SPR’s maximum drawdown capability (which had declined from a designed 4.4 million b/d designed rate to 4.25 million b/d at the time the proposed budget was released); and “efforts to reverse diminished cavern capacity due to cavern creep, a geological force that causes caverns to close overtime, thereby decreasing space to store oil,” the letter said.

They asked that DOE officials from its Fossil Energy Office, SPR Project Management Office, and management and operations contractor staff meet with the House committee’s staff by May 27 to discuss the test sale, creation of the Northeastern regional gasoline reserves, projected life cycle of SPR sites and infrastructure, and DOE’s assessment of the reserve’s current fuel mix and whether existing drawdown guidelines are appropriate.

Oversight and Investigations Subcommittee Chairman Tim Murphy (Pa.) and Vice-Chairman Michael C. Burgess (Tex.), Energy and Power Subcommittee Chairman Ed Whitfield (Ky.), Committee Chairman Emeritus Joe Barton (Tex.), and Committee Vice-Chairman Marsha Blackburn (Tenn.) signed the letter in addition to Upton.

Contact Nick Snow at nicks@pennwell.com.

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