WASHINGTON — Congress should not use the nation’s emergency oil stockpile as an ATM, with sales of the crude funding unrelated legislative priorities, Sen. Lisa Murkowski said after touring one of the Louisiana sites that makes up the United States’ Strategic Petroleum Reserve.
“Any potential revenue raised through the rightsizing of the SPR should be used to improve our nation’s energy security,” said Murkowski, R-Alaska, the head of the Senate Energy and Natural Resources Committee. “Ensuring the operational effectiveness of the reserve should be our first priority.”
Murkowski’s comments come as House Republican leaders look to the sale of excess oil from the SPR as a potential source of funding for other initiatives. Earlier this month, the House of Representative voted for a health care research bill with a plan to help pay for it by selling 64 million barrels of oil in the Strategic Petroleum Reserve for about $5.4 billion.
And lawmakers now looking to renew the federal Highway Trust Fund that pays for transportation projects are considering a $7 billion sale of SPR crude.
Murkowski, who toured the Bayou Choctaw SPR site near Baton Rouge, La., with Obama administration officials on Friday, isn’t alone in thinking it’s a bad idea.
Her Democratic counterpart on the energy committee, Sen. Maria Cantwell of Washington, also thinks the SPR’s value comes as an energy security asset — not as a moneymaker.
“The SPR is currently our most important federal energy security asset,” said Rosemarie Calabro Tully, a spokeswoman for Cantwell. “Rather than raiding the SPR, we must modernize it.”
Energy Secretary Ernest Moniz has argued that the United States should rethink the size of the oil stockpile, the capacity to swiftly tap it and even how aggressively it should be used. But, he has warned against using the SPR for “anything other than the energy security and resilience issues for which it was intended.” That’s “a very slippery slope,” he told energy executives and analysts at a conference last month.
The United States recently added two more stockpiles to the crude-focused Strategic Petroleum Reserve — one filled with heating oil and low-sulfur diesel and another with gasoline — but Moniz has said other regional reserves may be needed around the country.
The United States is obligated to maintain a reserve of crude oil or petroleum products equivalent to at least 90 days worth of net imports, as part of U.S. membership in the International Energy Agency.
A broad government analysis of U.S. energy infrastructure, released in April, suggested modernizing the strategic petroleum reserve, including relaxing the triggers for tapping it. The president can open the spigots when there is a “severe energy supply interruption” now, but that prevents taking anticipatory action before a supply disruption.
The government’s quadrennial energy review also highlighted problems in swiftly delivering emergency oil to the market — as evidenced by a March 2014 test sale of 5 million barrels from the reserve.
That sale revealed that while the SPR actually can pump out roughly 4.4 million barrels of oil daily, there isn’t enough pipeline capacity to keep up with it.
For instance, some pipelines expected to carry oil away from the salt domes now flow in different directions. And Moniz has floated the idea of building dedicated SPR facilities that would boost its distribution capacity, at a potential price tag of $1.5 billion to $2 billion.
Murkowski’s visit to the SPR site Friday came against that backdrop, with both the Obama administration and lawmakers on Capitol Hill considering ways to modernize the reserve. Describing the SPR as ” a vital national security asset,” Murkowski said it’s important to “ensure that it’s capable of moving oil to where it’s needed in case of supply disruptions.”
Assistant Energy Secretary Christopher Smith was part of the group that gathered at the Bayou Choctaw site, which is home to about 73.6 million barrels of crude oil spread through five underground salt caverns in Louisiana.
All together, the SPR is comprised of 62 underground caverns clustered around four sites — two in Louisiana and two in southeastern Texas.