U.S. lawmakers question DOE about future of emergency oil reserve

Reuters News
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Posted: Mar 18, 2015 6:11 PM

WASHINGTON (Reuters) - U.S. Representatives asked the Department of Energy on Wednesday to explain its plans for the emergency oil reserve, a facility created after the 1970s oil crises, but likely to be reduced in light of a sharp drop in crude imports.

Fred Upton, the chairman of the House of Representatives Committee on Energy and Commerce, and five other lawmakers from both major parties, asked the DOE in a letter what is needed to improve the Strategic Petroleum Reserve's ability to respond to shortages.

"Significant changes to the national energy landscape over recent years make a long-term strategic review of the SPR especially crucial at this time," the letter said.

It also asked what lessons the DOE learned from a test sale of 5 million barrels from the reserve last year, and how it plans to use the revenues from the sale, other than the $235 million already committed to build a reserve in the Northeast. The DOE said last week it will use the funds to buy back oil to replace crude from last year's test sale.

The five year U.S. oil boom has helped slash imports of foreign oil, leading to calls to reduce the 727 million barrel reserve, which currently holds about 691 million barrels.

The United States is required to hold about 90 days worth of oil imports in the reserve as part of an international agreement, but currently holds much more than that.

A federal energy review, to be released in coming weeks by the DOE, is expected to include details of an SPR makeover that would include reducing the size of the facility.

(Reporting by Timothy Gardner. Editing by Andre Grenon)