U.S. budget deal would sell 58 million barrels of oil from emergency reserves

Reuters News
|
Posted: Oct 27, 2015 7:42 AM

WASHINGTON (Reuters) - Congressional leaders proposed to sell 58 million barrels of oil from U.S. emergency reserves over six years starting in fiscal 2018 to help pay for a budget deal that ends mandatory spending cuts, according to a copy of the bill posted to a congressional website.

The Strategic Petroleum Reserve holds more than 695 million barrels of crude in Texas and Louisiana, a bounty that U.S. lawmakers have eyed a few times this year to pay for a new drug program and highway maintenance.

Economists have said reducing SPR stocks is the right idea at the wrong time, given low crude oil prices.

The White House has urged Congress to pass the budget compromise. A copy of the bill can be found at: (http://1.usa.gov/208f0uB)

Senate Commerce and Transportation Committee Chairman John Thune left open the possibility of withdrawing more SPR reserves as part of an effort to pay for an upcoming transportation bill this year.

"SPR could be used for both," Thune said.

However, when asked about the soundness of taking oil out of the reserve to fund both budget and highway initiatives, Thune said, "That's a point that's obviously being discussed. We have members for whom that is not their favorite offset."

Senator Lisa Murkowski, who chairs the Senate Energy Committee, has been a stiff opponent of tapping the reserve to raise cash for issues unrelated to energy security, like highway projects or a program to speed new drugs to market.

Murkowski did not immediately criticize the budget deal, however. A spokesman said she was reviewing it and, as the budget process advances, would evaluate steps needed to update U.S. energy and natural resources policies.

(Reporting by Roberta Rampton, Tim Gardner and Richard Cowan; Editing by Doina Chiacu and David Gregorio)