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White House asks Congress for $500 million to modernize oil reserve

Commodities Nov 17, 2022 04:33PM ET
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© Reuters. FILE PHOTO: An oil storage tank and crude oil pipeline equipment is seen during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson/File Photo

By Timothy Gardner

WASHINGTON (Reuters) -The Biden administration has asked Congress for $500 million to modernize the U.S. strategic petroleum reserve (SPR), a document outlining the request shows.

If approved by Congress, the request, issued by the White House on Tuesday, provides the Department of Energy (DOE) with funding to improve the four SPR sites along the Texas and Louisiana coasts.

President Joe Biden announced the biggest withdrawal ever from the reserve earlier this year of 180 million barrels in an effort to push down oil prices that jumped after Russia's Feb. 24 invasion of Ukraine. The historic release of oil has pushed supplies in the SPR to the lowest level since March of 1984.

The SPR oil is stored in hollowed-out, underground salt caverns that can shift and potentially require maintenance when petroleum is removed and replaced. The facility's steel pumps and equipment are also subject to constant lashing of moist, salty air, which can be corrosive.

The proposed funding "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.

The SPR funding was included in the White House's proposal for nearly $38 billion in aid to Ukraine as part of a supplemental funding request. The funding for Ukraine for the duration of the fiscal year would go to defense equipment, humanitarian assistance, and nuclear security support, the White House said.

The request also includes $126.3 million for the National Nuclear Security Administration, part of the DOE, to guard against potential nuclear and radiological incidents in Ukraine, the White House said. It would also help Ukraine with security of nuclear and radiological materials, and prevent illicit smuggling of nuclear, radiological, and dual-use materials.

Russia has claimed ownership of the Zaporizhzhia Nuclear Power Plant in Ukraine, Europe's largest. Repeated shelling has damaged buildings and cut power lines essential to cooling reactor fuel and avoiding a nuclear meltdown. Russia and Ukraine blame each other for the shelling.

DOE spokesperson Charisma Troiano said the money was needed to perform necessary infrastructure repairs and keep the SPR ready for future scheduled sales and to "address global energy supply chain disruptions" such as those caused by Russia's invasion of Ukraine.

The White House did not immediately respond to a request for details about why the SPR needs to be modernized.

White House asks Congress for $500 million to modernize oil reserve
 

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Comments (2)
Lucas P
Lucas P Nov 17, 2022 5:55PM ET
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$38 B for Ukraine's security and a 1/2 B for ours...
Clay Douglass
Clay Douglass Nov 17, 2022 11:13AM ET
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the answer is NO...Kilzl Joe biden.
 
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