The Potential Modernization of the Strategic Petroleum Reserve and Related Energy Security Issues

The Strategic Petroleum Reserve (SPR) was originally authorized by the Energy Policy and Conservation Act of 1975. The Senate is deliberating over the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, known colloquially as the reauthorization of the Highway Trust Fund. Such a reauthorization, however, costs billions of dollars per year. The DRIVE Act presently includes a provision that authorizes the drawdown and sale of 101 million barrels of crude oil from the SPR during the 2018-2025 period as partial payment for a three-year reauthorization of the Highway Trust Fund. Such a sale would be unprecedented in scope and would occur at a time of elevated threats to global oil production and distribution. The federal government has drawn down the Strategic Petroleum Reserve numerous times over the past three decades for a total of 166 million barrels. A sale of 101 million barrels would be unprecedented in both its duration and volume. The proposal to sell SPR oil comes at a time of heightened unplanned petroleum production outages across the world. For example, violence rages in Libya, Nigeria, and Iraq, and tensions are high between Iran and the Gulf Arab states, including Saudi Arabia.