Proposed federal budget deal includes sale of crude from SPR

A tentative 2-year federal budget agreement, which is expected to come to a US House floor vote the afternoon of Oct. 28, includes a provision authorizing the sale of 58 million bbl of crude oil from the US Strategic Petroleum Reserve during 2018-25.

Proceeds would be deposited in the US Treasury’s general fund to help reduce the budget deficit. Sales would not be allowed if it was determined that they would limit the SPR’s ability to meet its strategic purpose and prevent and reduce adverse impacts of severe domestic energy supply disruptions.

Title IV in the proposed budget agreement, which Speaker John O. Boehner (R-Ohio) unveiled on Oct. 27, also would require the US Department of Energy to conduct a strategic review of the SPR and develop proposals related to its role in national policy, relevant legal authorities, configuration, and performance, and long-term effectiveness.

US Energy Sec. Ernest G. Moniz has said that such a review is needed, as has US Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.), who opposes selling crude from the reserve to reduce the deficit or to fund other federal programs.

A spokesman for the committee’s majority said on Oct. 27 that the senator was reviewing the proposal. “As the budget process advances, we will further evaluate steps needed to update our nation’s energy and natural resources policies,” Moniz said.

Retired US Navy Adm. Dennis C. Blair, a former National Intelligence Director who now is a member of Securing America’s Future Energy’s Energy Leadership Council, called on Congress to be careful as it considers drawing down the SPR.

“I would caution Congress and the administration against using the SPR as a revenue generator,” he said on Oct. 27. “I would also recommend that the SPR not be drawn down before DOE’s strategic review is complete and that any proceeds from SPR sales be dedicated to energy expenditures with the goal of improving our country’s energy security.

“While this deal is far from perfect, it is a noteworthy compromise that establishes a minimum size for the SPR and, critically, ensures it is upgraded to guarantee its ability to respond in the event of future supply emergencies,” Blair said.

Contact Nick Snow at

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