US DOE still seeking funding for SPR crude fill after Congress nixes plan

Washington — The Trump administration will continue to urge Congress to appropriate $3 billion to fill the Strategic Petroleum Reserve with US crudes after lawmakers removed the plan from a coronavirus relief package, the Department of Energy said Thursday.

DOE formally withdrew a solicitation to buy 30 million barrels of medium and heavy crudes a day after Republican leaders of the Senate agreed to take the measure out of stimulus legislation as part of a deal with Democrats to break an impasse. The solicitation was the first step in seeking 77 million barrels to fill the stockpile, but those plans are now on hold.

"President [Donald] Trump's directive to buy oil at a competitive price for the SPR is a common-sense move benefiting taxpayers and supporting our nation's economic and national security interest," said DOE spokeswoman Shaylyn Hynes.

"The American energy sector is a major driver of our nation's economy and it is being significantly harmed by the impacts of COVID-19 and international market manipulation," Hynes added. "Small to medium-size American energy companies and their employees should be provided the same relief being provided to other parts of our economy, and the secretary calls on Congress to work with the administration to fund the president's request as soon as possible."

The empty space in the SPR caverns on the Gulf Coast is equivalent to about 8% of currently available commercial crude storage, according to Bob McNally, president of Rapidan Energy Group. The consultancy expects crude and product storage to be full by the end of summer, if not earlier.

ClearView Energy Partners estimated a maximum 2020 supply impact of about 380,000 b/d from the SPR purchase. Managing director Kevin Book said that corresponds to about 48 days of commuter gasoline-demand destruction from social distancing, assuming 60% of US commuters stay home.