The White House has asked Congress to approve a $500 million appropriation to modernize the Strategic Petroleum Reserve as part of an emergency supplement funding request for fiscal year 2023.
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The emergency crude stockpile played a key role in President Joe Biden's efforts to mitigate global supply disruptions caused by Russia's invasion of Ukraine and help lower fuel costs. The Department of Energy earlier in the month completed the largest-ever drawdown from the SPR, satisfying Biden's historic commitment to release 180 million barrels, or roughly 1 million b/d beginning in April.
Biden has said that further releases from the SPR are possible as his administration considers options for stabilizing global oil markets and addressing the pain at the pump exacerbated by the Russia-Ukraine war.
Specifically, Biden in October laid out a three-step plan for lowering fuel costs that involved a call for oil companies to pass savings on to consumers as well as a readiness to release more crude from the SPR and a desire to responsibly increase US oil production without delaying or deferring the transition to clean energy.
With the SPR's oil supplies at their lowest level since the 1980s, the oil and gas industry has criticized the administration's approach to ensuring energy security and affordability.
"The SPR was established to mitigate the impact of severe supply disruptions, and depleting this strategic asset to historically low levels risks potentially leaving the country unprepared to respond to a true supply emergency," Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute, said Nov. 17.
The $500 million funding request would support modernization activities at the four SPR sites – underground salt caverns on the Gulf Coast located in Big Hill and Bryan Mound in Texas and in Bayou Choctaw and West Hackberry in Louisiana, according to the request issued by the White House.
"The proposal would allow the SPR to both maintain operational readiness levels and also alleviate anticipated shortfalls due to supply chain issues, the COVID-19 pandemic, and related schedule delays," the White House said in the request.
Congress has until Dec. 16 to reach an agreement to fund the government for the rest of the fiscal year. The White House's emergency supplement request, laid out in a letter to Congress dated Nov. 15, aims to address national priorities tied to the COVID-19 response and critical assistance to Ukraine. The letter indicates that a further request will be forthcoming for funding to address recent natural disasters.
With regards to supporting Ukraine, the White House is also seeking $1.1 billion to secure and repair Ukraine's energy sector and address that country's energy supply needs. That funding would also support Moldova in increasing its electricity imports from neighboring countries and enable the purchase of fuels and other energy equipment as the country looks to become less dependent on Russia for its energy needs.
Another $50 million was requested to address cybersecurity threats from Russia against Western Balkan countries.