US Senate Panel To Review Strategic Oil Reserve Policies
A U.S. Senate panel will next week review how the government uses the Strategic Petroleum Reserve, a spokesman for the committee said Friday.
Some of the current administration's policies for filling and using reserves from the SPR, an emergency crude stockpile, have come under harsh criticism from some Democratic leaders in Congress.
In particular, the Bush administration's plan to fill the SPR at a time of record oil prices has prompted angry reactions from Capitol Hill.
Despite oil prices hovering in the $90-$100 a barrel range, hitting new nominal highs in the past week, the Department of Energy is planning diversion of 125,000 barrels a day of crude oil from the open market into the rainy-day stockpile at the May-September height of the peak summer oil-demand season.
The planned shift of more than 4 million barrels during May alone would be the biggest injection into the SPR since March 2005 and precedes what government forecasters expect to be a 22-month high in refiner demand for crude oil in June. The moves are part of the Bush administration's strategy to fill the SPR to its 727-million-barrel capacity by the end of 2008. Currently, the reserve holds 698.6 million barrels of crude in underground salt caverns along the Gulf Coast.
Earlier this week, Sen. Jeff Bingaman, D-N.M., chairman of the energy committee, said after oil prices peaked at more than $100 a barrel that the SPR needed to be managed "in a more sophisticated way."
Sen. Byron Dorgan, D-N.D., said he plans to introduce a bill to block government oil purchases when prices are high. Under the proposal, the government could resume acquisitions 30 days after notifying Congress that it had determined the weighted-average price for petroleum in the U.S. over the past 90 days is $50 or less a barrel. According to EIA data on prices at Cushing, oil hasn't regularly traded below $50 a barrel since 2005.
Energy Secretary Samuel Bodman and head of the Energy Information Administration, Guy Caruso, have both said that the influx of crude into the SPR was minimal, as was the impact on the market.
Congress has also decided to halt funding for a doubling in the capacity of the SPR as Democratic leaders seek to shift the country's energy supplies from a fossil-fuel-based economy to more alternatives and clean energy resources.
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