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Budget Battle Could Affect Nation’s Strategic Petroleum Reserve

The Obama administration hopes to secure millions to improve the nation's supply of reserve crude oil.

The Obama administration, amid another congressional budget showdown, hopes to secure millions to improve the nation's supply of reserve crude oil.

The Wall Street Journal reports that the Energy Department requested some $375 million to improve outdated and inefficient infrastructure surrounding the nation's Strategic Petroleum Reserve — millions of barrels of oil held in facilities in Louisiana and Texas designed to help avert a disruption in the nation's crude supply.

The money would come from the sale of up to $2 billion of the reserve's stockpile, but the paper notes that it would need approval from Congress in a broad appropriations bill needed to avert a government shutdown on Oct. 1.

Lawmakers are reportedly preparing to move forward with the bill, but with just weeks to go until the presidential election, a slew of political issues are clouding its prospects.

Some critics, meanwhile, are questioning whether the strategic reserve should continue to exist at all.

In addition to the growing costs needed to maintain it, observers said that the dramatic increase in domestic oil production in recent years make it less likely than an event like the OPEC embargo in the 1970s — which spawned the SPR — would impact the U.S. oil market.

The pipelines originally built to connect the SPR to the broader energy market, in fact, are running in the opposite direction in order to funnel crude from shale deposits to Gulf Coast refineries.

Lawmakers, meanwhile, previously abandoned the reserve’s primary purpose and sold some of its crude supply to help fund the government.

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