Budget deal would draw down oil reserves

The federal government would sell millions of barrels from its massive oil stockpile under the budget deal struck by the White House and congressional leaders.

The sale of 58 million barrels out of the 695 million barrels in the Strategic Petroleum Reserve (SPR) could anger lawmakers of both parties who have defended the stockpile and rejected attempts to sell it off for purposes unrelated to energy.

{mosads}The White House, in encouraging lawmakers to vote for the budget deal reached Monday, called it “a responsible agreement that is paid for in a balanced way.” The oil sales would happen between 2018 and 2023.

The money would go toward an increase of $80 billion in the federal budget over the next two years, just under 1 percent growth.

Amid proposals to use the oil reserve to pay for a highway bill and new healthcare research, Sen. Lisa Murkowski (R-Alaska), chairwoman of the Senate Energy and Natural Resources Committee, led a charge this summer to protect the reserve and label any sales not related to energy security as irresponsible.

“Selling off millions of barrels of America’s strategic oil reserve at a time when spare capacity is low and the global threat environment is heightened would be an error of historic proportions,” she said at the time, in response to a highway bill proposal.

“Such a sale would be the largest in the SPR’s history — greater than all previous emergency drawdowns combined — and would undermine our nation’s energy security for a temporary gain. It would be like cashing in our home insurance policy to pay for repaving the driveway.”

The Obama administration has generally agreed.

Energy Secretary Ernest Moniz, whose agency oversees the research, told senators earlier this month that the stockpile is too valuable to sell off.

“The SPR remains an extremely powerful and valuable energy security tool,” he said.

The low global price of oil has also concerned lawmakers who say that the federal government would be better off waiting for prices to rise. The West Texas Intermediate benchmark crude oil was at $42.80 Tuesday morning, less than half its price a year and a half ago.

The oil reserve is housed in four leased areas near the Gulf Coast.

The budget deal also proposes selling wireless spectrum to pay for the spending increases.