An undated photo provided by the Department of Energy shows crude oil pipes at the Bryan Mound site near Freeport, Texas. President Joe Biden dipped into the nation’s petroleum stockpile to try to corral rising energy prices. The White House announced Thursday, March 31, 2022, that Biden ordered the release of 1 million barrels of oil per day from the strategic petroleum reserve for the next six months.(Department of Energy via AP)
House Republicans are honing in on releases from the nation’s Strategic Petroleum Reserve in the first set of bills that they’re expected to take up once they can start legislating.
While their legislation is unlikely to make it through the Democrat-led Senate and past President Biden, including these bills among the first of the new Congress signals that the nation’s oil reserves will be a key policy priority for the GOP.
On Friday, Rep. Steve Scalise (La.), a key Republican leader, released a list of “meaningful, ‘ready-to-go'” bills that will be the first that the party takes up, including two bills related to the strategic oil reserves.
“These commonsense measures will address challenges facing hard-working families on issues ranging from energy, inflation, border security, life, taxpayer protection, and more,” he said of the 11 total bills in a dear colleague letter.
The Strategic Petroleum Reserve is the nation’s emergency crude oil supply. Last year, the Biden administration executed the largest-ever sell off of oil from the reserve, drawing Republican ire, in an effort to tamp down fuel prices that skyrocketed after Russia’s invasion of Ukraine.
Now, the GOP is pushing back. The party is slated to take up two bills aimed at future oil releases: one that would prevent new releases of SPR oil unless there is a plan in place for more energy development on the nation’s public lands and another that would seek to prevent oil from U.S. reserves from ending up in China.
“We wanted to start with some things on SPRO which we’ve seen President Biden raid to cover for his failed policies,” Scalise told reporters, referring to the strategic reserve.
Frank Maisano, who represents energy clients at the law and government relations firm Bracewell LLP, told The Hill via email that he would expect Republicans to kick off their term by targeting the SPR.
“I fully expect Republicans to be aggressive in challenging the political nature of the administration’s actions and try and set a standard for future use of the SPR,” Maisano said.
The administration defended its use of the SPR, saying it was used correctly to address supply issues.
“The Biden administration, like administrations of both parties have historically done, rightly authorized emergency use of the SPR mission to address supply disruptions –providing relief to American families and refineries when needed the most. Treasury estimated that the Biden administration’s releases reduced prices at the pump by up to $0.40/gallon,” said an emailed statement from the Energy Department.
Scalise added that Republicans will be “doing a lot of bills to lower energy costs and have a good energy strategy that allows us to create our own energy” but said that committees like Energy and Commerce and Natural Resources would have to do work on those.
A spokesperson for Cathy McMorris Rodgers, who will chair the Energy and Commerce Committee, said via email that the the Biden administration “abused the SPR to coverup its radical anti-fossil fuel agenda” when asked why the SPR was among the first issues that the Republican majority was taking on.
More broadly, the spokesperson said, “Republicans are focused on making energy more secure and affordable for the American people, and delivering solutions that address these issues will be one of Chair Rodgers’ first priorities on E&C.”
The early focus on the strategic reserve may be a harbinger of some future actions. While the legislation is not likely to make it across the finish line, Republicans could target the oil reserve in other ways, particularly through oversight.
When they were in the minority, Republicans on the Energy and Commerce Committee sought documents related to the SPR release. With the majority, they’ll have more force to formally request them and further probe the Biden administration’s action.
It’s not clear when the initial bills would come to the floor, as votes are delayed by GOP infighting over who will become speaker of the House. Originally, the China-related bill had been slated for a vote this week.
When the Biden administration released the oil, a senior administration official described it as a “wartime bridge to additional U.S. production and other production that we expect later this year.”
Even if they would be able to pass, they may not be particularly effective. Tom Kloza, global head of energy analysis at the Oil Price Information Service said the China-related bill sounds “pretty silly.”
Some of the oil that was sold from the strategic reserve ended up in other countries, including China, and some of the countries that were able to buy oil from the release are U.S. subsidiaries of foreign companies.
But, Kloza said, even if the barrels ended up in China, it would have still had the same impacts on the U.S. economy.
“It is a world market and it’s like water seeking its own level and when you sold oil on the incremental market whether it moved to domestic sources or whether it moved overseas it did temper the enthusiasm for high-priced oil,” he said.
“There’s no question that SPR sales mitigated the price impact for crude last year,” he added.
Kloza was also somewhat critical of the bill requiring a plan to produce more oil and gas on federal lands, saying that he “understand[s] the point they’re trying to make” but also said he believes there are “plenty of leases out there.”
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Republicans target oil reserve releases with initial energy bills - The Hill
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