WASHINGTON – U.S. Senator Bill Cassidy, M.D. and chairman of the Senate Energy Subcommittee, will reintroduce legislation to allow the U.S. Department of Energy (DOE) to save taxpayers money by leasing up to 200 million barrels of future unused storage capacity at the Strategic Petroleum Reserve (SPR). The added revenue will support SPR maintenance and its long-term operational readiness.
“The Strategic Petroleum Reserve is a critical national security asset. Leasing empty space allows producers a place to store excess production and ensure that the United States always has a ready supply of oil,” said Dr. Cassidy.
The SPR Reform Act authorizes the Department of Energy (DOE) to launch a pilot leasing program so that private and foreign trade partners can lease empty SPR space. This will preserve and maximize the strategic value of this energy asset. The bill prevents leasing in the event that doing so would affect national security and the United States’ ability to use the SPR. Currently, DOE is exercising authorities under existing law for a one-time opportunity to lease 77 million barrels of unused capacity to the private sector . However, in future years, the Department will have to sell crude oil from the SPR to comply with various Congressional directives, leaving nearly 40 percent (~270 million barrels) of the SPR capacity unused. Senator Cassidy’s proposal would allow for more frequent injections and withdrawals of crude oil by the private sector.
The SPR has a storage capacity of 713.5 million barrels (MMB) and is comprised of 62 underground storage caverns, two of which are located at the Bayou Choctaw site in Iberville Parish and the West Hackberry site in Cameron Parish. Congressional mandates require withdrawal of about 250 million barrels by 2028, which would allow about 45 percent of the SPR’s storage capacity to be available for leasing.