Expanding Petroleum Reserve Won't Raise Prices, DOE Secretary Vows
The Bush administration's effort to expand the Strategic Petroleum Reserve will not drive up oil prices on the open market, Energy Secretary Samuel Bodman said today.
The government will buy oil for the reserve in quantities that will be largely "inconsequential" on the worldwide market, Bodman told a Washington energy conference.
The Energy Department currently has roughly $500 million available for buying oil and will start its purchases this spring, Bodman said.
"We have enough cash to get started in the process," he said.
The petroleum reserve contains roughly 690 million barrels of oil, with a maximum capacity of 727 million barrels. President Bush announced his policy in his State of the Union address that he plans to expand the reserve to 1.5 billion barrels.
DOE has already announced plans to add a fifth SPR in Richton, Miss., as well as expand the existing facilities. The process of both expanding the SPR and filling it with additional supplies is expected to take about 20 years.
Bodman said DOE will begin buying oil at a rate of roughly 50,000 to 100,000 barrels a day -- "not a consequential amount," he said.
But if DOE determines its purchases are pushing prices up, "we will back off," Bodman said.
Bodman also said DOE would consider including ethanol in the reserve. "We are in the process of doing that, but we are very early in the game," he said.
Copyright 2007 Greenwire. All Rights Reserved. Visit Greenwire for a free trial.