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Oil sales from the reserve when market prices are high, for example, could generate cash for the government, provided stocks were regularly replaced with cheaper oil when market conditions warranted. At the end of each fiscal year, earned income could be sent to the nation's general revenue fund, he suggested.
As for releasing oil stocks from the reserve to control prices, Evans said he understands the attraction. He said every economy has a tipping point between energy prices high enough to generate economic activity and prices that are too high, which negatively impact economic growth through cost burdens on manufacturing, transportation and household budgets. It also authorized selling 58 million barrels of crude oil during eight consecutive fiscal years commencing in fiscal , with revenue from those sales to be deposited into the general revenue fund at the U.
The remainder of sales will create general revenue.
Trump’s Budget Delivers Big Oil’s Wish: Reducing Strategic Petroleum Reserve | DeSmogBlog
The tally on directed sales is million barrels, while the Energy Information Administration data predicts the net drop will be million barrels. The amounts of oil Congress directed to sell could be adjusted to more or less as most of the bills include dollar caps , depending on market pricing when those sales happen, officials said. The Strategic Petroleum Reserve's future is being evaluated by the U. Department of Energy, which operates the system.
It also is being eyed by the U. The subcommittee's ranking Democrat, U. Rush, has authored a draft measure with Republican U. Joe Barton that would create a pilot project to commercialize the reserve by enabling a portion of its future unused capacity to be leased by private operators. Rush stated increasing domestic oil production raises important questions that need examined, including whether the need for the Strategic Petroleum Reserve exists, and, if so, how big the reserve should be.
This past week, the subcommittee heard from the Department of Energy and the US. Government Accountability Office, which has been pushing for an assessment of the nation's future needs for the reserve. Winberg, assistant secretary for fossil energy at the U. Energy Department, told committee members in prepared testimony the reserve's current size is larger than what's required by U.
The Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy
He also told committee members the agency is studying how the reserve should be reconfigured once currently mandated sales are completed about a decade from now. Among other things, it will examine whether any of the reserve's caverns have structural deficiencies or otherwise wouldn't be efficient to operate once drawdowns are complete. The evaluation also includes looking at whether regional reserves of petroleum products should be established and how to handle reserve assets that are no longer needed.
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