![[CRS Issue Brief for Congress]](iblogo.gif)
Congressional attention to the SPR declined during the 1990s as a number of developments intersected: (1) the need to cut federal spending; (2) declining likelihood of prolonged and crippling oil supply interruptions; (3) unregulated oil markets that appear to operate efficiently and effectively in allocating and pricing oil; (4) a consensus that the SPR was probably at an adequate level to serve its purpose and additional fill was not justified. In early 1994, the Administration proposed, and Congress agreed, to suspend further purchases of oil for the SPR.
Drawdown of the Reserve can be authorized by the President in the event or likelihood of a "severe energy supply interruption," to meet U.S. obligations to International Energy Agency allies for emergency oil-sharing, or in the event of a sharp increase in the price of petroleum that would be likely to have "a major adverse impact" on the economy.
Maintaining the Reserve's readiness and upgrading aging infrastructure are the priorities now. The FY1996 budget request included $100 million to be generated by a sale of 7 million barrels of SPR oil, the money to finance transfer of 73 million barrels of oil from the storage site at Weeks Island, LA, where a sinkhole had developed. The site will be decommissioned.
The proposed sale of SPR oil was controversial. Some Members argued that this was a misuse of SPR oil and an inadvisable precedent. A House floor amendment to strike language authorizing the sale was defeated July 18, 1995 (157-267), however, and the sale was subsequently approved by Congress in a continuing resolution. Sale of 5.1 million barrels, at an average price of $18.92/bbl, generated $96.4 million.
An additional sale of SPR oil was enacted as part of H.R. 3019 (P.L. 104-134), the Balanced Budget Downpayment Act, II. The President took advantage of this enactment by announcing sale of SPR oil on April 29, 1996, to help blunt recent crude and product price increases. Sale of $227 million worth of SPR oil was completed in early August.
The President's FY1997 budget requested $221.3 million in new authority for operation and maintenance of the SPR. The House Interior Appropriations Subcommittee recommended that the SPR be financed in FY1997 from a sale of $220 million of SPR oil. The committee's authority to legislate the sale was challenged, and the provision was stripped. The Senate Appropriations Committee, however, included the sale, and it was enacted as part of an omnibus spending bill enacted in the final days of the 104th Congress.
A sharp increase in home heating oil prices and comparatively low stocks in the Northeast have prompted calls from a few Members of Congress for use of SPR oil to establish a heating oil reserve. The Administration has indicated that it does not believe the situation warrants any intervention at the moment.
A sharp increase in home heating oil prices and comparatively low stocks in the Northeast have prompted calls from a few Members of Congress for use of SPR oil to establish a heating oil reserve. The Administration has indicated that it does not believe the situation warrants any intervention at the moment.
Additional SPR oil will be entering markets this fall anyway. The FY1997 Interior Appropriations proposed a further sale of $220 million (roughly 12 million barrels) to finance SPR operations in FY1997. Representative Schaefer, chairman of the Subcommittee on Energy and Power, challenged the sale on jurisdictional grounds and successfully had the language stripped from the bill before it passed the House. In the Senate, the Appropriations Committee included the sale, and it was enacted in P.L. 104-208. More than $142 million of SPR oil authorized to be sold in FY1997 was sold by mid-November 1996 with delivery anticipated before the end of the year. If the total sale is completed soon, nearly ten million barrels of SPR oil could be available to U.S. refiners this winter.
To protect against a repetition of the economic dislocation caused by the 1973-74 Arab oil embargo, Congress, in the Energy Policy and Conservation Act (EPCA, P.L. 94-163), authorized the SPR. It was generally believed that the mere existence of a large, operational reserve of crude oil would deter future oil cutoffs and would discourage the use of oil as a weapon. In the event of an interruption, introduction into the market of oil from the Reserve would help calm markets, mitigate sharp price spikes, and reduce the economic dislocation which had accompanied the 1973 disruption. In so doing, the Reserve would also buy time -- time for the crisis to sort itself out or for diplomacy to seek a resolution before pressures built toward largescale intervention. The SPR was to contain enough crude oil to replace imports for 90 days, with a goal initially of 500 million barrels in storage. In May 1978, plans for a 750- million-barrel Reserve were implemented.
The program fell increasingly behind schedule. By the end of 1978, the SPR was supposed to contain 250 million barrels, but contained only 69 million barrels. When the Iranian revolution cut supplies in the spring of 1979, purchases were suspended to reduce the upward pressure on world oil prices. Filling of the Reserve was resumed in September 1980 following enactment of the Energy Security Act (P.L. 96-294), which established a minimum fill rate of 100,000 b/d. An amendment to the FY1981 DOE appropriations legislation required that the Administration accelerate the fill rate to 300,000 b/d, subject to adjustments for cost and other market factors. The fill rate was 292,000 b/d in FY1981, 215,300 b/d in FY1982, 228,000 b/d in FY1983, 192,000 b/d in FY1984, 159,400 b/d in FY1985, 49,600 b/d in FY1986, 75,400 b/d in FY1987, 57,000 b/d in FY1988, 61,500 b/d in FY1989, and 34,000 b/d in FY1990. The Reserve reached 500 million barrels in June 1986 and following the Gulf War drawdown, held 568.5 million barrels. Purchases for the SPR were suspended after the invasion of Kuwait. Fill was resumed in June 1992 at a modest rate after a hiatus of nearly 2 years, and fill was around 16,500 b/d during FY1994. The Reserve reached 592 million barrels before purchases were again suspended. Owing to sales of SPR oil during 1996, the level had fallen to 574 million barrels by fall, and this figure will decline by another 10 million barrels when the sale authorized for FY1997 is completed.
Until fill was suspended for a time from 1990-1992, crude purchases for the SPR came largely from open solicitations issued by the Defense Fuel Supply Center. With the expiration in the late 1980s of the most recent agreement with Petroleos Mexicanos (PEMEX), the Defense Fuels Supply Center resumed making purchases for the SPR on behalf of DOE from the spot market.
Purchases for the SPR were resumed in the spring of 1992. Initial purchases were of Norwegian sweet crude. Some 20,000 b/d from the Naval Petroleum Reserve was also transferred to the SPR; this was judged to be more advantageous to the government than accepting any of the bids then pending. Fill averaged nearly 34,000 b/d during FY1993, and around 13,000 b/d during FY1994.
Resumption of fill is clearly not on the congressional or Administration agenda, but alternative approaches to direct purchase of oil for the Reserve were studied and debated during the 1980s. Most alternatives had distinct disadvantages or risks. Among the options examined at length were the sale of oil-denominated bonds with the revenues applied to oil purchases; imposition of SPR-dedicated fees on gasoline or oil imports; sale of the Naval Petroleum Reserve (NPR) or dedication of NPR revenues to SPR purchases. The only option examined thought to have the same advantages as direct purchases was oil leasing.
In the 102nd Congress, omnibus energy legislation in the House (H.R. 776) included a provision that would have required that refiners of domestic and imported oil be assessed 1% of their domestic and imported crude, and imported product purchases or cash equivalent, to provide 150,000 b/d for the SPR. The Administration and the industry were opposed to this approach, arguing that a set-aside would be the equivalent of a tax and that it would be borne disproportionately by certain companies. The set-aside language was contentious and an amendment to strike it passed the House. (A set-aside proposal had been considered in committee in the Senate, but was defeated in markup.)
Table 1 summarizes the number of sources that provided oil for the Reserve from the program's inception until the end of 1995. Following the test sale and actual drawdown of SPR oil during the Persian Gulf War, the SPR's holdings declined to 568.5 million barrels. Purchases restored the reserve to nearly 591.6 million barrels before they were suspended. Source: U.S. Department of Energy.
The resources of the Strategic Petroleum Reserve are of little value unless DOE can remove, transport, and sell the oil expeditiously and in significant volume during a supply emergency. SPR drawdown and distribution capability was designed to be 4.3 million barrels per day (mbd), sustainable for 90 days. However, discovery of gas seepage into the storage caverns has temporarily reduced availability of total supply. Remediation of the problem continues. By the end of FY1996, the initially sustainable drawdown rate should be roughly 3.4 mbd. By April 1998, drawdown capability is expected to reach 3.9 mbd.
Fears were expressed periodically during the 1980s whether the facilities for withdrawing oil from the Reserve were in proper readiness; the absence of problems during the first real drawdown in early 1991, during the Persian Gulf War, appears to have allayed much of that concern. However, some SPR facilities and infrastructure are reaching the end of their operational life. A Life Extension Program initiated in 1993 has as its objective upgrade or replacement of all major systems by 2000 to ensure the SPR's readiness to the year 2025. Contract commitments for this program exceeded $77 million during 1995.
The debate over when, and for what purpose, to initiate a drawdown of SPR oil reflects some significant shifts in the operation of oil markets since the 1970s and early 1980s. Sales authorized by the 104th Congress have complicated the debate anew.
The SPR Drawdown Plan, submitted by the Reagan Administration in late 1982, provided for price-competitive sale of SPR oil. The plan rejected the idea of conditioning a decision to distribute SPR oil on any "trigger" or formula. To do so, the Administration argued, would discourage private sector initiatives for preparedness or investment in contingency inventories. Many analysts, in and out of Congress, agreed with the Administration that reliance upon the marketplace during the shortages of 1973 and 1979 would probably have been less disruptive than were the price and allocation regulations. But many argued that the SPR should be used to moderate the price effects that even small shortages (like those of the 1970s or the tight inventories being experienced during the current spring) and the lack of confidence in availability of supply can trigger. Early drawdown of the SPR, some argued, was essential to achieve these desirable objectives.
The Reagan Administration revised its position in January 1984, announcing that the SPR would be drawn upon early in a disruption. This new policy was hailed as a significant departure, easing considerably congressional discontent over the Administration's preparedness policy, but it also had international implications. Some analysts began to stress the importance of coordinating stock drawdowns worldwide during an emergency lest stocks drawn down by one nation merely transfer into the stocks of another, and defeat the price-stabilizing objectives of a stock drawdown. In July 1984, responding to pressure from the United States, the International Energy Agency (IEA) agreed "in principle" to an early drawdown, reserving decisions on "timing, magnitude, rate and duration of an appropriate stockdraw" until a specific situation needed to be addressed.
This debate was revisited in the aftermath of the Iraqi invasion of Kuwait on August 2, 1990. The escalation of gasoline prices and the prospect that there might be a worldwide crude shortfall approaching 4.5-5.0 million barrels daily prompted some to call for drawdown of the SPR. The sticking point between those favoring immediate use of the SPR and those holding that option under review was whether the SPR should be drawn down to blunt prices in the absence of a shortage of actual "wet" barrels.
In the days immediately following the Iraqi invasion of Kuwait, the Bush Administration indicated that it would not draw down the SPR in the absence of a physical shortage simply to lower prices. On the other hand, some argued that a perceived shortage does as much and more immediate damage than a real one, and that flooding the market with stockpiled oil to calm markets is a desirable end in itself. From this perspective, the best opportunity to use the SPR during the first months of the crisis was squandered. It became clear during the fall of 1990 that, in a decontrolled market, physical shortages are less likely to occur. Instead, shortages are likely to be expressed in the form of higher prices as purchasers are free to bid as high as they wish to secure scarce supply.
Within hours of the first air strike against Iraq in January 1991, the White House announced that President Bush was authorizing a drawdown of the SPR, and the IEA activated the plan on January 17. Crude prices plummeted by nearly $10/bbl in the next day's trading, falling below $20/bbl for the first time since the original invasion. The price drop was attributed to optimistic reports about the allied forces crippling of Iraqi air power and the diminished likelihood, despite the outbreak of war, of further jeopardy to world oil supply; the IEA plan and the SPR drawdown did not appear to be needed to help settle markets, and there was some criticism of it. Nonetheless, more than 30 million barrels of SPR oil was put out to bid, and 17.3 million barrels were sold and delivered in early 1991.
The Persian Gulf War was an important learning experience about ways in which the SPR might be deployed to maximize its usefulness in decontrolled markets. Legislation enacted by the 101st Congress, P.L. 101-383, had liberalized drawdown authority for the SPR to allow for its use to prevent minor or regional shortages from escalating into larger ones; an example was the shortages on the West Coast and price jump that followed the Alaskan oil spill. In the 102nd Congress, omnibus energy legislation (H.R. 776, P.L. 102-486) broadened the drawdown authority further to include instances where a reduction in supply has brought about a "severe" increase in the price of petroleum "severe" enough to "likely ... cause a major adverse impact on the national economy."
A new dimension of SPR drawdown and sale was introduced into this ongoing debate by the Administration's proposal in its FY1996 budget to sell 7 million barrels to help finance the SPR program. While agreeing that a sale of slightly more than one percent of SPR oil was not about to cripple U.S. emergency preparedness, some in the Congress vigorously opposed the idea, in part because it might establish a precedent that would bring about additional sales of SPR oil for purely budgetary reasons. As detailed below, that is indeed what has happened. Additionally, some Members of Congress representing Northeastern states have been urging the use of SPR oil to create a reserve of home heating oil.
The First Session (1995). The Administration projected an additional $100 million in spending over and above the FY1996 request for decommissioning the SPR storage site at Weeks Island where a sinkhole has developed above the salt dome. Water has infiltrated the cavern, risking displacement of the stored oil. DOE injected saturated brine into the crevasse, through which the water is flowing, and pressurized the storage chamber. But DOE concluded that the integrity of the cavern cannot be guaranteed over the long term and that the oil needs to be withdrawn and the Weeks Island site decommissioned.
Roughly 73 million barrels was stored at Weeks Island when DOE made this determination. To defray $100 million of the costs of transferring the oil and shutting down the site, the Administration's FY1996 budget proposed selling 7 million barrels of the oil stored at Weeks Island.
The proposal sparked some concern and criticism. At a hearing in February 1995, some members of the House Commerce Subcommittee on Energy and Power criticized the proposed sale, arguing that the SPR stockpile should not be used to generate offsetting revenue, and that the price the oil will sell for would be considerably less than the government's investment in it. It was argued that the sale of this oil would disturb the local market and that cuts could be found elsewhere in the DOE budget. DOE responded that this would be a one-time event and that the volume of oil at issue here was relatively small and would be sold over time.
The Administration sent legislation authorizing the sale to Congress in early May 1995. Senator Murkowski expressed immediate opposition, arguing that he opposed the precedent of using SPR oil to provide operating funds for the program. He argued that Congress accepts the need to decommission Weeks Island and would have looked favorably on a request for the funds to do so. "[T]here will be no end once we start doing this," he remarked in the Senate on May 4, 1995. "Every time DOE's budget is put in a squeeze, there will be pressure to sell a few barrels of SPR to protect this or that cherished program." A floor amendment to the Interior Appropriation (H.R. 1977) to strike the language authorizing the 7 million barrel sale was defeated in the House on July 18 (157-267), however, and the sale was not an issue in the conference. As neither the House nor the Senate Appropriations Committee approved the $25 million in new spending authority requested by the Administration (arguing that this could be captured through program savings), total program spending for the SPR in FY1996 is set at $287 million. After failed attempts, the House passed the conference report on H.R. 1977 on December 14, 1995, but the President, as was expected, vetoed the measure. A House vote to override the veto failed on January 4, 1996 (239-177).
The Balanced Budget Downpayment Act, approved January 26, 1996 (P.L. 104-99), provides funding for the SPR through mid-March and also authorized sale of 7 million barrels of oil from Weeks Island. Owing to higher crude prices, sale of 5.1 million barrels, at an average price of $18.92/bbl, was sufficient to generate $96.4 million in revenues. The sale was completed by late March 1996.
During the course of the debate, there were other proposals to sell SPR oil. A proposal to sell 65 million barrels from the site as a revenue-generating initiative had been rejected by the conferees on the budget resolution. However, on September 21, 1995, the Senate Energy Committee agreed to include in reconciliation an authorization for selling enough SPR oil over the next 7 years to raise $551 million of the committee's deficit reduction target of $4.6 billion. It was projected that this might necessitate selling as much as 38 million barrels of SPR oil over the period, with $285 million to be generated from oil sales during FY1996. The conferees on the budget reconciliation (H.R. 2491) reduced this figure to 32 million. But, for other reasons, the President vetoed the reconciliation measure.
The Second Session (1996). There was a fresh round of proposals to sell SPR oil.The Administration's budget request for FY1997 includes the sale in FY2002 of 72 million barrels of SPR oil--the effective equivalent of what is currently stored at the Weeks Island site. The Administration projects the sale would raise $1.5 billion. The intent is to offset sharp cuts, pending and proposed, to DOE's renewables and energy efficiency R&D.
On March 12, 1996, the Senate passed an amendment to H.R. 3019 that authorized sale of $227 million of SPR oil during FY1996. The intent behind the amendment was to generate savings or revenues (an "offset") for the purpose of restoring cuts to education programs. Congress and the White House reconciled their differences and H.R. 3019 was enacted into public law on April 25, 1996. In the face of sharp increases in retail gasoline prices during the spring of 1996 and proposals to repeal the most recently-enacted increment in the gasoline tax, the President announced on April 29, 1996, the immediate release of 12 million barrels of SPR oil, with revenues from the sale to be counted against the target authorized in P.L. 104-134. The Defense Fuel Supply Center (DFSC) evaluated the initial bids as too low. Then, prices declined during the summer. By early August, 12.8 million barrels of oil had been sold at an average price of $17.77/bbl, raising $227.8 million.
It is difficult to measure the extent to which the President's announcement contributed to the decline in crude prices during the days that followed his announcement. However, it was probably thought that selling the oil sooner rather than later in the fiscal year would mean a better sales price for the government. Some argued that the quantity being put on the market was too negligible to be of much consequence. Yet, at the same time, the domestic petroleum industry was critical of the drawdown, arguing that it was an inappropriate use of the SPR, and an intrusion into the oil market that places the government in competition with domestic producers. The industry press reported that the delivery of 6 million barrels of SPR oil during August was depressing the price of South American sour crudes. Some domestic oil traders claim the sale depressed its prices for domestic sour crudes as well.
Oil prices rebounded in late summer after Iraqi forces attacked Kurdish areas in the northern Iraq, prompting a U.S. military response, and sinking expectations that Iraqi crude might soon re-enter the market. Deputy Secretary of Energy Charles B. Curtis indicated on September 4, 1996, that the Administration saw no evidence that a release of SPR oil was warranted. However, Congress approved an additional sale of SPR oil in the omnibus spending package enacted at the close of the 104th Congress (P.L. 104-208). More than $30 million was sold in October for November and December delivery.
A Heating Oil Reserve or Swap? In early October 1996, Representative Kennedy II and Senator Lieberman urged Secretary of Energy O'Leary to consider proposals to use the proceeds from sale of SPR oil to purchase home heating oil and stockpile it, or to swap the crude for refined product. In the event of a cold snap putting pressure on prices, supply would be released from the heating oil reserve to help blunt the spike in prices. Proceeds from the sale of product held in reserve would be used to replenish SPR crude.
After meeting with industry officials on October 18th, Secretary O'Leary indicated that the Administration would not intervene in markets at this time. The Secretary said that low heating oil inventories were not a justification under current authority, and that Congress would not be able to authorize a heating oil reserve until January 1997 at the earliest. DOE's position also was that establishing a heating oil reserve would only place additional pressure on prices and inventories.
However, Secretary O'Leary said that the administration might tap the SPR if prices became "exorbitant." She promised close monitoring of distillate stocks and indicated an openness to various courses of action as events develop or warrant. DOE also announced that it would study the operation of the futures market to discover how its operation may have contributed to lower inventories. Additionally, a broader analysis underway on the SPR and SPR policy would address whether a heating oil reserve would be warranted in the future.
As it is, some crude supply from the SPR oil will be coming into the domestic market this fall and winter anyway. Prior to adjournment, the 104th Congress approved another controversial sale of SPR crude for the purpose of generating $220 million to finance SPR program operations during FY1997. By the middle of November, bids totaling $142 million (roughly two-thirds of the authorized sale) had been accepted for November and December delivery, and sales will continue until the revenue target is satisfied. If the sale is completed during winter, it would introduce nearly ten million barrels of crude supply into the market, roughly the same amount that DOE estimates a heating oil reserve would need to contain to have any impact on the market. While ten million barrels of crude does not translate into an equivalent volume of heating oil all lodged in the Northeast, the already authorized SPR sale could be a contributing factor in an easing of current market tightness.
The FY1995 Interior appropriations (H.R. 4602, P.L. 103-332) suspended oil acquisition for the SPR as a savings initiative and directed the use of previously authorized but unspent balances in the petroleum acquisition account to finance part of the SPR operations. The Administration's request for FY1996 proposed to transfer an additional $187 million of unspent funds in the petroleum acquisition account, leaving roughly $35 million left in the oil acquisition fund. New authority of $25 million was requested, for total program spending of $213 million, a reduction of $35 million from FY1995. When the Interior appropriations went forward to the President, it provided $287 million for the SPR--$187 in new spending in addition to $100 million generated from the limited sale. This figure was approved in P.L. 104-134.
The President's FY1997 budget request requested $221.3 million in new authority for operation and maintenance of the SPR, but includes a provision for selling $1.5 billion of SPR oil in FY2002. The Administration proposal was inconsistent with its professed opposition to sale of SPR oil to meet non-program, budget-balancing objectives. At a hearing before the Senate Energy Committee in late March 1996, Kyle Simpson, DOE Associate Deputy Secretary for Energy Programs, explained that the proposal was driven by budget constraints; the Administration would not otherwise support a sale of SPR oil. The Committee was critical of the Administration's proposal.
House Interior recommended $220 million for the SPR in FY1997, but stipulated that these revenues were to be generated by a further sale of 12 million barrels of SPR oil -- which would theoretically bring the SPR down to roughly 563 million barrels. In its report, the Committee expressed regret that a further sale was required, but indicated that funding the program through direct appropriations was "not feasible" with spending targets. The report expressed optimism that oil prices would not be "distressed" during this period and stipulated that sales contracts should only be awarded for bids at fair market value.
The proposed sale was challenged by Representative Dan Schaefer, chairman of the House Resource Committee's Subcommittee on Energy and Power. He argued that, in the absence of the extraordinary circumstances that justified a non-emergency sale in last year's appropriations, a new sale makes major SPR policy, which is vested with his Subcommittee. The House Rules Committee agreed that inclusion of the provision violated House rules, and the sale was stripped from the bill before its passage by the House. Senate Appropriations, however, restored the sale, noting that "spending constraints and the precedent set by both the President's budget request and House action make appropriation of new budget authority for SPR operations impossible."
Given capacity that is not likely to be filled by outright oil purchases, DOE is exploring whether foreign nations might wish to store oil in the SPR. The Administration budget also assumes generating $360 million by 2002 from leasing SPR storage. DOE has previously indicated that the Czech Republic and South Korea had registered some interest.
In its last hours, the 104th Congress agreed to a simple one-year extension (H.R. 4083, P.L. 104-306) of provisions in the Energy Policy and Conservation Act (EPCA) that authorize the President to sell oil from the SPR. Provisions in the omnibus spending bill (P.L. 104-208) authorize a new sale of $220 million in SPR oil during FY1997, but the absence of EPCA reauthorization would have hampered exercise of the Presidential authority to initiate drawdown of the SPR in an energy emergency. The legislation was headed to the President's desk on Oct. 10, 1996. Authorization for the United States to participate in the IEA was extended to the end of FY1997 as well.
Opponents of continued sales of SPR oil for budgetary purposes wanted to hold the reauthorization to one year, pending a broader review in the 105th Congress of SPR policy.
P.L. 104-306, H.R. 4083 (Schaefer)
Extends certain programs under the Energy Policy Conservation Act (including
SPR) through September 30, 1997. Introduced Sept. 17, 1996; referred to House
Committee on Commerce. Ordered to be reported by voice vote, September 18, 1996,
H.Rept. 104-814. Passed House, Sept. 24, 1996. Passed by the Senate, Oct. 3, 1996.
Signed into law October 14, 1996.
H.R. 3868 (Schaefer)
Extends certain programs under the Energy Policy Conservation Act (including
SPR) through September 30, 1996. Introduced July 23, 1996; reported by
Committee on Commerce, H.Rept. 104-712, July 26, 1996. Passed House July 30,
1996.
S. 1605 (Murkowski)
Energy Policy and Conservation Act Amendment. Extends authorization for SPR
program through FY2001. Mandates Secretary of Energy to prepare a policy
statement to address, among other issues, the effectiveness of the SPR in reducing
severe energy supply interruptions, and to review alternative drawdown strategies.
Repeals the mandate for an Early Storage Reserve and a Regional Petroleum
Reserve. Introduced March 12, 1996. Reported from Committee on Energy and
Natural Resources with an amendment in the nature of a substitute (S.Rept.
104-273) May 15, 1996.
11/13/96 ---DOE announced that it had accepted another $53.5 million in bids for SPR oil authorized to be sold during FY1997, raising total sales for the current fiscal year to $142 million, or roughly two-thirds of the amount authorized by the 104th Congress.
10/01/96 ---DOE began soliciting bids toward satisfying the mandated sale of $220 million required by P.L. 104-208.
04/29/96 ---The President ordered the release of 12 million barrels of SPR oil to help blunt a recent runup in crude and product prices.
03/00/96 ---DOE completed sale of SPR oil authorized to finance emptying and decommissioning of the Weeks Island site. Owing to higher crude prices, sale of 5.1 million barrels, at an average price of $18.92/bbl, was sufficient to generate $96.4 million in revenues.
01/04/96 ---The House failed to override President Clinton's veto of the Interior Appropriations (239-177).
11/20/95 ---Reconciliation, as reported from conference, authorizes sale of up to 32 million barrels of SPR oil to help meet savings under the jurisdiction of the Senate Energy Committee.
08/09/95 ---The Interior Appropriations legislation passed the Senate and went to conference with a proposed $287 million in program spending for the SPR in FY1996. This figure consists of $187 million in unspent funds previously authorized for petroleum acquisition, and an additional $100 million to be raised by selling 7 million barrels of oil stored at Weeks Island.
02/00/95 ---The Administration's budget request for FY1996 proposes continued suspension of oil acquisition for the SPR and further use of unexpended acquisition funds to finance maintenance and operation of SPR facilities.
10/22/94 ---P.L. 103-406 provides for a simple 18-month extension of the current authorities governing the SPR.
10/00/94 ---The FY1995 Department of Interior and Related Agencies Appropriations Act (P.L. 103-332) essentially curtails oil purchases and fill of the SPR for FY1995.
02/00/94 ---In its FY1995 budget request, the Administration proposed suspending fill of the SPR altogether as a deficit-reduction measure.
10/24/92 ---P.L. 102-486 enacted, broadening the circumstances under which the SPR can be tapped, providing for expansion of the SPR to one billion barrels, and including further provisions affecting leasing, potential purchases of oil stripper well production, and requiring a study of how U.S. insular areas would be accommodated in the event of a disruption.
06/19/92 ---The SPR took delivery of the first cargo of oil since fill was suspended in 1990.
05/12/92 ---The Administration announced purchase of one million barrels of North Sea oil for the SPR at a contract price of $19.78, plus transportation costs. A few days earlier, arrangements were announced for delivery of 2.4 million barrels of Naval Petroleum Reserve oil over a 4-month period commencing in June.
02/25/91 ---The Administration announced it was preparing to resume purchase of oil for the SPR on international spot markets at a rate of 25,000 b/d for three months.
01/16/91 ---Within hours of the initial air attacks on Iraq, President Bush authorized a drawdown of the Strategic Petroleum Reserve in support of the plan agreed to just days earlier by the International Energy Agency.
12/09/90 ---Noting the success of the SPR test sale, Secretary of Energy Watkins indicated that he would recommend to the President that "a substantial amount of oil" be made available from the Reserve should hostilities break out in the Gulf.
08/08/90 ---The Administration indicated its willingness to use the SPR in the event of "any severe supply interruption," but indicated that any release of SPR crude will be coordinated with U.S. allies.
08/01/90 ---Iraqi forces invaded Kuwait and met minimal resistance. Acquisition of oil for the SPR was suspended.
07/11/84 ---The IEA agreed on principle that government-owned or controlled oil stocks should be used early during a supply disruption if deemed helpful to calming nervous oil markets and restraining price increases. The agreement did not supersede the emergency sharing program already in place, but was intended to broaden the repertoire of emergency responses that the IEA may consider.
01/24/84 ---Secretary of Energy Donald Hodel testified before the Senate Subcommittee on Energy, Nuclear Proliferation, and Government Processes of the Committee on Governmental Affairs that the Administration supported early use of the Strategic Petroleum Reserve during a petroleum disruption to help stabilize markets.
05/00/82 ---DOE released a report required by the Omnibus Budget Reconciliation Act of 1981 on the optimum size of the Reserve, which concluded that a Reserve larger than 750 million barrels would not provide net economic benefits to the United States.
06/30/80 ---Congress passed the Energy Security Act requiring that the SPR be filled at a rate of at least 100,000 b/d for FY1981 beginning October 1, 1980. Fill was resumed in late September 1980.
03/00/79 ---Purchase of oil for the SPR was suspended because of the tight international crude oil market, Saudi objections, and budget considerations.
08/00/77---First crude oil pumped into SPR.
12/22/75 ---Energy Policy Conservation Act authorized the Strategic Petroleum Reserve.
Interagency Working Group on SPR Size. Strategic Petroleum Reserve: Analysis of Size Options. February 1990.
Oak Ridge National Laboratory. Preliminary Results of the SPR Size Costbenefit Study [by] Leiby, Paul N., and Russell Lee. Draft. November 17, 1988.
U.S. Department of Energy. Report to the Congress on Alternative Financing Methods for the Strategic Petroleum Reserve. Submitted in response to the Strategic Petroleum Reserve Amendments Act of 1989 (P.L. 101-42). February 1, 1990. Three volumes. DOE/FE-0155.
-----Assistant Secretary for Fossil Energy. Office of Strategic Petroleum Reserve. Strategic Petroleum Reserve: Annual/Quarterly Report. Washington, February 15, 1996.
-----Assistant Secretary for Fossil Energy. Office of Strategic Petroleum Reserve. Strategic Petroleum Reserve: Quarterly Report. Washington, August 15, 1995. DOE/FE-0340.
U.S. Department of Energy. Energy Information Administration Service Report. An Analysis of Increasing the Size of the Strategic Petroleum Reserve to One Billion Barrels. January 1990. SR/ICID/90-01.
U.S. Department of Energy. Office of Strategic Petroleum Reserve. Report to the Congress on Expansion of the Strategic Petroleum Reserve to One Billion Barrels. April 1989. 72 p. DOE/FE-0126
U.S. General Accounting Office. Strategic Petroleum Reserves: Analysis of Alternative Financing Methods. March 1989. 37 p. GAO/RCED-89-103