WASHINGTON (Reuters) – The House Energy and Commerce Committee unveiled a budget proposal that allocates over $1.5 billion for the replenishment and upkeep of the Strategic Petroleum Reserve. This proposal cancels a mandated sale following substantial sales in 2022. The plan includes $1.32 billion to purchase oil for replenishing the SPR, the largest emergency crude stockpile globally, and $218 million for facility maintenance. Energy Secretary Chris Wright estimated in March that achieving President Donald Trump’s goal of filling the SPR would require $20 billion and several years, benefiting domestic energy producers amidst low oil prices. With a capacity of approximately 727 million barrels, the facility currently holds around 399 million barrels. The move by the House committee, predominated by Trump’s Republicans, is part of a broader initiative to reduce grants and loan financing in former President Joe Biden’s Inflation Reduction Act, a major climate law. Biden, a Democrat, sold a record 180 million barrels from the SPR in 2022 in response to Russia’s invasion of Ukraine, depleting the reserve to its lowest level in 40 years. The House proposal, set for a committee vote on Tuesday, also terminates a mandated sale of 7 million barrels from the SPR through fiscal year 2027. The Biden administration collaborated with Congress to halt these sales to prevent the SPR levels from dropping further. The Department of Energy introduced a plan in the Federal Register on Monday to allow the purchase of oil for the SPR at an indexed price, which can fluctuate with the market, instead of a fixed price. The Biden administration previously favored fixed-price contracts for quick reserve acquisitions. The DOE argued that fixed-price contracts caused confusion in the industry. The new rule will take effect in 60 days unless significant objections are raised. (Reporting by Timothy Gardner; Editing by Mark Porter)
