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

WASHINGTON – The Biden administration has asked Congress for $500 million to modernize the US Strategic Petroleum Reserve (SPR), according to a document outlining the request.

If Congress approves, the proposal, issued by the White House on Nov. 15, will provide the Department of Energy (DOE) with funds to upgrade the four SPR sites along the Texas and Louisiana coasts.

President Joe Biden earlier this year announced the largest-ever withdrawal from the reserve of 180 million barrels in a bid to depress oil prices. The historic release of oil has pushed stocks in the SPR to their lowest level since March 1984.

The SPR oil is stored in hollowed out, underground salt caverns which will shift and may require maintenance as petroleum is removed and replaced. The plant’s steel pumps and equipment are also constantly exposed to humid, salty air that can be corrosive.

The proposed funding “would allow the SPR to both maintain operational readiness and alleviate anticipated shortages 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 an additional funding request. Funds for Ukraine for the fiscal year would be used for defense equipment, humanitarian assistance and nuclear safety support, the White House said.

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

Russia has laid claim to the Zaporizhia nuclear power plant in Ukraine, the largest in Europe. Repeated shelling has damaged buildings and cut power lines essential to cooling reactor fuel and avoiding a meltdown. Russia and Ukraine blame each other for the shelling.

DOE spokeswoman Charisma Troiano said the money is needed to carry out necessary infrastructure repairs and keep the SPR ready for future planned sales and to deal with “disruptions to the global energy supply chain” 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.

By Timothy Gardner

Reuters

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