By Maureen Lorenzetti
OGJ Online
WASHINGTON, DC, Sept. 27 -- Congress and the White House are revisiting the role of the 544.7 million bbl Strategic Petroleum Reserve in light of recent terrorist attacks outside Washington, DC, and in New York City.
"I�ve asked [Deputy Sec.] Francis Blake to look at a number of possibilities, many of which are under serious discussion," Energy Sec. Spencer Abraham said Thursday.
Abraham would not disclose the nature of the policy review, but government sources said DOE is "eyeing with interest" a legislative proposal by two House Republicans that would authorize the department to fill the reserve to its 700 million bbl capacity.
Reps. Billy Tauzin (R-La.), House Energy and Commerce Committee Chairman, and Joe Barton (R-Tex.), Energy and Air Quality Subcommittee chairman, said low oil prices make this the right time to fill the stockpile.
The crude, 179.5 million bbl of sweet and 365.2 million bbl of sour, is stored at four sites in Texas and Louisiana.
Under a Clinton administration program, US companies "borrowed" crude and will be repaying it in the coming year, with an additional 30 million bbl in interest.
Over the past decade, the SPR has been the subject of many studies and reports. In his energy blueprint, President George W. Bush indicated policymakers should draw a sharper line regarding when the stockpile should be used.
The Energy Policy and Conservation Act gives the President authority to decide when to draw down SPR crude during an energy emergency. The oil is sold through competitive bidding.
The SPR's $20 billion investment has made it an attractive target for policymakers even when there are no supply concerns. In the late 1990s Congress instructed DOE to sell SPR oil to raise money for the federal budget. Former President Bill Clinton drew on SPR crude to add supplies to the market when product prices were high.
DOE officials say the reserve's size and the government's policy to withdraw oil early in a supply emergency make the SPR a significant economic and foreign policy tool.
A 1999 Oak Ridge National Laboratory study called for the SPR capacity to be increased by 300 mil bbl over several years, consistent with the 1 billion bbl goal when the program was launched. A 1 billion bbl reserve would have a drawdown rate of 6 million b/d, vs. the current 4 million b/d.
The Oak Ridge study estimated it would cost $1.25 billion (1996 $) to build more storage.
Contact Maureen Lorenzetti at [email protected]