OREANDA-NEWS. May 30, 2017. President Donald Trump is seeking to sell off half of the US Strategic Petroleum Reserve (SPR) and open up a wildlife refuge in Alaska to oil and gas leasing, according to his budget request for fiscal 2018.

Those changes make up part of a budget request, set for release today, that seeks $54bn in spending cuts across the non-defense portion of the federal government. The US Environmental Protection Agency would face a 31pc budget cut. The US Interior Department, which regulates energy production on federal land, would lose 11pc of its budget, while the US State Department's budget would fall by 29pc.

The White House did not respond for comment about why it wants to reduce the size of the SPR, which consists of four sites in Texas and Louisiana. But it would continue a trend of the US Congress tapping the reserve as a source of funding for transportation, health research and deficit reduction. Budget documents anticipate selling off half the reserve would generate about $16.6bn over the next decade.

The SPR has a design capacity of 713.5mn bl and presently holds 687.7bl. The US Congress since 2015 has authorized the sale of 155mn bl of crude from the reserve over the next eight years. Cutting the SPR's design capacity in half would require selling a further 183mn bl of crude, although doing so could run the risk of violating International Energy Agency requirements to hold in reserve 90 days of net petroleum imports.

The budget also proposes holding oil and gas lease sales, starting in 2022, for the Arctic National Wildlife Refuge in northern Alaska. Republicans have been trying to open part of the refuge to drilling for decades. The US Geological Survey estimates that "Section 1002" of the reserve and adjacent lands may hold 10.4bn bl of oil and 8.6 Tcf (244bn m3) of natural gas. The budget projects these lease sales would raise $1.8bn by 2027.

The budget also proposes to repeal royalty payments to states in the Gulf of Mexico Energy Security Act, a 2006 law that set new royalty-sharing requirements relating to oil and gas production in the US Gulf of Mexico. The White House did not elaborate on this change but estimates it would save $3.5bn over the next decade.