Legislation to establish lease program for SPR introduced in Congress
A bill was introduced in Congress that would establish a program to lease up to 200 million barrels of unutilized storage space in the Strategic Petroleum Reserve (SPR).
Mandatory sales of oil would leave approximately 400 million barrels of oil in the SPR later this decade. This would leave the SPR with more than 300 million barrels of unutilized storage capacity and result in the SPR utilizing only 40 percent of its authorized capacity and 55 percent of physical storage capacity.
The Strategic Petroleum Reserve (SPR) Reform Act would require the Department of Energy to identify appropriate SPR storage facilities to lease to the private sector. Further, the Energy Secretary would be required to ensure that leasing of unused space does not jeopardize emergency use of the SPR or national security and requires lessees to pay fees to offset operations and maintenance costs. Also, it authorizes the DOE to use funds in the Energy Security and Infrastructure Modernization (ESIM) Fund for the improvements necessary to prepare SPR facilities for lease.
“As the world’s largest oil and gas producer, the U.S. should continue to maximize its spare capacity at the Strategic Petroleum Reserve,” Sen. Bill Cassidy (R-LA) said of this bipartisan, bicameral bill. “Using future cavern space through a commercial leasing program can generate sustainable revenues for U.S. Treasury, greater returns for the taxpayer and ensure the long-term operational capacity of the SPR.”
It is co-sponsored by Rep. Steve Scalise (R-LA) and Henry Cuellar (D-TX).
“I’m pleased to join Rep. Cuellar and Senator Cassidy in introducing the Strategic Petroleum Reserve (SPR) Reform Act, a bill that will allow the Department of Energy to more efficiently lease unused storage space in the SPR,” Scalise said. “The SPR is the largest stockpile of crude oil in the world and an important national security asset, and as shown by the current energy crisis, the SPR plays an important role in managing the supply of oil in times of scarcity and also oversupply.”
In uncertain economic times, the country must work to the gains the country has made in the oil and gas industry, Cuellar said.
“This bipartisan legislation will allow domestic oil companies to lease out storage space in the SPR to protect the global market from a supply disruption. As is evident in the global oil market today, safeguarding supply disruptions are more important now than ever. Furthermore, we must defend the energy sector and protect the millions of American working families whose paychecks rely on it. Replenishing the SPR will not only strengthen our economic prosperity, it will ensure our national security and ability to stabilize the global marketplace.”
