Strategic oil reserve would fall by half under budget deal
https://www.chron.com/business/energy/article/Strategic-oil-reserve-would-fall-by-half-under-12564630.phpFebruary 9, 2018
The U.S. is poised to sell half of its emergency oil reserves to help pay its bills, something critics say defies the reason the stockpile was created decades ago as a hedge against supply disruptions.
The spending deal that passed both houses of Congress and was sent to the White House early Friday calls for selling 100 million barrels of oil from the Strategic Petroleum Reserve by 2027. Combined with other sales approved last year, that would mean the volume of oil in the reserve would fall by 45 percent, to about 303 million barrels. The White House said President Donald Trump will sign the bill Friday morning.
"This is the biggest non-emergency sale in American history," said Kevin Book, managing director of ClearView Energy Partners in Washington. "This is nothing short of liquidation of a safety net."
At today's oil price of about $60 a barrel, a sale of 100 million barrels would raise $6 billion. But it's impossible to determine exactly how much money the government would raise with the proposed sales because oil prices fluctuate wildly and the budget plan calls for the sales to take place between now and the fiscal year that ends Sept. 30, 2027.
The stockpile is kept inside a network of underground caverns and storage tanks along the U.S. Gulf Coast and has a capacity of 700 million barrels, making it the world's largest supply of emergency crude oil....
