A budget proposal released by a U.S. House committee includes over $1.5 billion to replenish and maintain the Strategic Petroleum Reserve, as well as halts a mandated sale following significant sales from the facility in 2022. The proposal, unveiled by the House Energy and Commerce Committee on Sunday, allocates $1.32 billion for oil purchases to refill the SPR, the world’s largest emergency crude stockpile, and $218 million for facility maintenance. Energy Secretary Chris Wright estimated in March that fulfilling former President Donald Trump’s goal of refilling the SPR would require $20 billion and several years, aiding domestic energy producers amid low oil prices. With a storage capacity of approximately 727 million barrels, the SPR currently holds around 399 million barrels. The move, spearheaded by the Republican-controlled House committee, is part of a broader effort to reduce grants and loan financing in President Joe Biden’s key climate legislation, the Inflation Reduction Act. Biden, a Democrat, authorized the sale of a record 180 million barrels from the SPR in 2022 following 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 eliminates a mandated sale of 7 million barrels from the SPR through fiscal year 2027. The Biden administration collaborated with Congress to cancel these sales in order to prevent further decline in SPR levels. Additionally, the Department of Energy put forth a proposal in the Federal Register on Monday to enable the government to purchase oil for the SPR at an indexed price, allowing for flexibility in response to market fluctuations. This contrasts with the Biden administration’s previous fixed-price rule, which aimed to expedite reserve purchases. The DOE argued that fixed-price contracts only led to industry confusion. The new rule will take effect in 60 days unless significant objections are raised.
