US Strategic Petroleum Reserve is set to fall to almost half its capacity by 2027
President Donald Trump signed the budget bill this morning after a series of late-night votes in the US Congress. The measure will boost government spending by about $300bn, provide $90bn in emergency relief and extend tax breaks for renewable energy and some biofuels. It also ended a brief government shutdown that lasted about nine hours.
Almost none of that spending is paid for, meaning the majority will come from more government borrowing. The measure comes eight weeks after Republicans approved a sweeping tax overhaul that is projected to add at least $1 trillion to the deficit. The 100mn bl in oil sales would generate more than $8bn at current price projections, offsetting a small fraction of the budget agreement's cost.
US energy security experts have criticized the decision by lawmakers to sell so much crude from the SPR, which held 695mn bl one year ago but is projected to fall to 405mn bl if all planned oil sales go forward. Critics say those volumes would provide an insufficient cushion of oil during a major emergency or supply shock.
Congress approved its first two oil sales in 2015, through a budget deal and highway funding bill that sold 124mn bl. Another 25mn bl was sold 2016 for medical research and 7mn bl more made it into last year's tax bill. And a $2bn SPR modernization program is being paid for with sales expected to reach 34mn bl by 2020.