FOR IMMEDIATE RELEASE: Friday, July 24, 2015
CONTACT: Erin Humiston, (972) 874-5139, or erin@IPI.org
DALLAS – Lawmakers scrambling to find funding for the federal Highway Fund should look to using all of the Strategic Petroleum Reserve (SPR), not just 100 million barrels, as the Senate is proposing.
“Holding about $35 billion worth of oil at today’s prices, the 1970s-era SPR is an anachronism thanks to innovative drilling techniques that have created a stunning U.S. energy boom,” said Institute for Policy Innovation (IPI) resident scholar Merrill Matthews, Ph.D.
“The Senate bill taps only about 15 percent of the current reserves, while offsetting the remaining needed funds with mostly flimsy ‘pay-fors’ that ding taxpayers and corporations,” said Matthews.
“But selling off all of the SPR, stretched out over the six-year life of the Senate’s Highway Fund bill, would cover a significant portion of the bill’s cost, fund it with something actually related to highways (i.e., oil) and in the long run save the government (i.e., taxpayers) money.”
Congress created the SPR in 1975 as a result of the oil embargo and as a way to ensure the U.S. had a supply of oil in an emergency. About 727 million barrels of crude oil can be stored at four different sites. While levels can vary, the feds usually keep around 700 million barrels in reserve.
The government has sold portions of the SPR many times over the years, especially as a way to lower oil prices when they are high. It eventually replaces those barrels when prices drop again.
But SPR was created when the U.S. had passed its so-called peak oil production in the early ‘70s, and it appeared that we would be increasingly dependent on foreign oil.
“The U.S. energy revival should force Congress to rethink some of its outdated policies, beginning with SPR,” said Matthews.