Bill Would Allow $500M Emergency Oil Sale
Source: Reuters, Tom Doggett (6/1/11)
"Obama administration requests sale of $500M oil from U.S. emergency stockpile."
A request by the Obama administration to sell $500 million in crude from the U.S. emergency oil stockpile was included in a spending bill released on Wednesday by the House Appropriations Committee, with a spring 2012 deadline to sell the crude.
The Energy Department has to inspect and possibly repair some of the underground caverns that hold the 727 million barrels of oil in the U.S. Strategic Petroleum Reserve. Part of the oil has to be removed from the caverns so the inspections can be carried out, according to the department.
The draft legislation requires the Energy Department to sell the crude, about 5 million barrels based on current market prices, by March 1 of next year.
The White House request to sell the oil was included in its budget proposal sent to Congress in February for the 2012 spending year that begins this October 1.
The reserve was created in the mid-1970s after the Arab oil embargo and holds America's emergency crude at four storage sites in Texas and Louisiana.
The House Energy and Water Subcommittee was scheduled to vote on the spending bill on Thursday. If passed, the full House of Representatives and Senate would eventually have to approve the SPR oil sale as part of the bigger budget, before a final spending measure could be sent to President Barack Obama for his signature into law.
Many U.S. lawmakers and consumer groups for months have urged the administration to tap the emergency stockpile to help ease the recent run-up in oil and gasoline prices. The president has refused, saying the reserve should be used for supply disruptions and not to control fuel prices.