WASHINGTON — U.S. Senator Bill Cassidy, M.D. (R-LA), House Republican Whip Steve Scalise and U.S. Representative Henry Cuellar (D-TX) introduced the Strategic Petroleum Reserve (SPR) Reform Act, a bill to authorize the Secretary of Energy to establish a program to lease up to 200 million barrels of unutilized storage space in the SPR.
“As the world’s largest oil and gas producer, the U.S. should continue to maximize its spare capacity at the Strategic Petroleum Reserve,” said Dr. Cassidy. “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.”
“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,” said Scalise. “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 this uncertain economic climate, we must work to preserve the record gains the United States has made in the oil and gas industry,” said Rep. Cuellar. “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,” Rep. Cuellar continued. “Replenishing the SPR will not only strengthen our economic prosperity, it will ensure our national security and ability to stabilize the global marketplace. I would like to thank Minority Whip Steve Scalise for his leadership on this important issue.”
Mandatory sales of oil would leave approximately 400 million barrels of oil in the SPR later this decade. These drawdowns would leave the SPR with more than 300 million barrels of unutilized storage capacity and would result in the SPR utilizing only 40% of its authorized capacity and 55% of physical storage capacity.
The Strategic Petroleum Reserve Reform Act does the following:
- Establishes a new program to lease unutilized space in the SPR to the private sector and requires DOE to carry out the new leasing program. The program would require DOE to:
- Identify appropriate SPR storage facilities to lease;
- Identify and implement changes to facilities or operations necessary to implement a leasing program;
- Make such facilities available for lease;
- Identify environmental effects of leasing storage facilities; and
- Lease up to 200 million barrels of storage capacity.
- Requires the Secretary 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.
- Directs DOE to use funds in the Energy Security and Infrastructure Modernization (ESIM) Fund for the facility and operational improvements necessary to prepare SPR facilities for lease.
- Requires DOE to report to Congress on the status of the program within 1 year of enactment.