Biden Requests $500MM for Strategic Petroleum Reserve

Biden Requests $500MM for Strategic Petroleum Reserve
A sum of $500 million has been earmarked for the U.S. Strategic Petroleum Reserve.

In a letter outlining President Biden’s request for 2023 emergency supplemental funding “for critical assistance to Ukraine and critical response activities to address Covid-19”, a sum of $500 million has been earmarked for the U.S. Strategic Petroleum Reserve (SPR).

“This request would provide the Department of Energy, Energy Security and Infrastructure Modernization Fund account $500 million for modernization activities of the four Strategic Petroleum Reserve sites,” the letter, which was sent from the Office of Management and Budget (OMB) to the Speaker of the United States House of Representatives Nancy Pelosi, stated.

“The proposal would allow the SPR to both maintain operational readiness levels and also alleviate anticipated shortfalls due to supply chain issues, the Covid-19 pandemic, and related schedule delays,” the letter added.

In the letter, which was sent last week, OMB Director Shalanda Young said the Biden administration looked forward to continued engagement with members of both parties to reach a comprehensive, bipartisan agreement to fund the government for the rest of the fiscal year and invest in critical national priorities before the December 16 funding deadline.

“As part of that process, the Congress has an opportunity and obligation to address three additional and critical funding needs that should earn bipartisan support: protecting the American people from Covid-19 and saving lives globally; supporting the people of Ukraine; and helping communities across the Nation recover from devastating natural disasters,” Young stated in the letter.

The SPR is the world’s largest supply of emergency crude oil, according to the U.S. Department of Energy’s (DOE) website, which notes that the SPR was established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the U.S. under the international energy program. The federally owned oil stocks are stored in underground salt caverns at four sites along the coastline of the Gulf of Mexico, the site highlights.

Earlier this month, the DOE announced that contracts had been awarded for the purchase of crude oil from the SPR following a notice of sale announced on October 18. These contract awards completed Biden’s announcement on March 31 to release 180 million barrels of crude oil “to address the significant global supply disruption caused by Putin’s war on Ukraine, act as a wartime bridge for domestic production to increase, and aid in lowering energy costs for American families”, the DOE noted.

A total of 12 companies responded to the notice, submitting 110 bids. Contracts were awarded to the following companies:

  • Equinor Marketing & Trading                             1.750 million barrels
  • Macquarie Commodities Trading US LLC         1.850 million barrels
  • Marathon Petroleum Supply and Trading LLC   2.950 million barrels
  • Phillips 66 Company                                           0.350 million barrels
  • Shell Trading (US) Company                              0.700 million barrels
  • Valero Marketing and Supply Company             7.450 million barrels

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