US Oil Reserve Would Fall Nearly in Half Under Budget Deal



US Oil Reserve Would Fall Nearly in Half Under Budget Deal
The US is poised to sell half of its emergency oil reserves to help pay its bills.

"Selling the SPR to cover non-energy budget expenses is deeply short-sighted and unwise," said Bob McNally, president of consultant Rapidan Energy Group in Washington and a former senior energy official at the White House under Republican President George W. Bush. "In 1996 and 1997 we sold SPR barrels to pay for unrelated budget expenses and I was in the White House when we put those barrels back at higher prices starting about five years later, after 9/11."

The pending budget bill also authorizes $350 million in sales to help pay for efforts to modernize the stockpile itself -- a sign Congress doesn’t want to completely do away with the emergency oil supply.

"The SPR is only effective if it can get its petroleum to market quickly and efficiently in the event of a supply emergency," said Robbie Diamond, president of Securing America’s Future Energy, a group aiming to pare U.S. dependence on oil. "Geopolitical risk is alive and well in the oil market, and the SPR is America’s only formal short-term line of defense against oil supply disruptions and price spikes."

To contact the reporters on this story: Ari Natter in Washington at anatter5@bloomberg.net; Catherine Traywick in Washington at ctraywick@bloomberg.net. To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net; David Marino at dmarino4@bloomberg.net Justin Blum.


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