House Energy Subcommittee hears testimony on leasing program for US Strategic Petroleum Reserve
The House Subcommittee on Energy held a hearing Tuesday on draft legislation that would require the Secretary of Energy to launch a pilot program to lease “underutilized” facilities in the Strategic Petroleum Reserve (SPR).
Subcommittee Chairman Fred Upton (R-MI) said in his opening remarks that the United States is now more energy secure than ever before and that efforts should be taken to keep it that way.
Steven Winberg, assistant secretary of fossil energy at the U.S. Department of Energy (DOE); Kevin Book, managing director of the ClearView Energy Partners, LLC; Daniel Evans, project manager of Fluor Federal Petroleum Operations; and Frank Rusco, director of natural resources and environment for the Government Accountability Office provided testimony for the hearing.
“Today’s legislative draft would expand storage leasing currently available to foreign governments so that private commercial entities could lease SPR space too,” Book said. “In my opinion, the pilot leasing program of this sort could potentially benefit U.S. producers and refiners in need of additional storage. If that program also helped to preserve or expand SPR capabilities at the same time, it could enhance petroleum supply insurance for U.S. consumers too.”
While Winberg stated that the DOE is supportive of opening up leasing storage capacity to the private sector, Rusco raised some concerns about the functionality of such an effort.
“What I’m concerned about is DOE has not done a good job of periodically assessing how the market has changed, how energy security issues have changed, and doing complex risk-based analysis involving scenarios of possible use,” Rusco said. “That’s what they need to do.”
Congress authorized the creation of the SPR in 1975, following the Arab Oil Embargo of 1973, which sought to cripple nations supportive of Israel during the Yom Kippur War. Today, it represents the world’s largest emergency stockpile of crude oil.
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