Congress Includes Massive Sale of Oil Reserves in Budget Deal

February 10, 2018

Congress is expected to vote on a budget deal Thursday that would cut the United States' emergency oil reserves almost in half over the next decade, Bloomberg reports.

The spending deal includes a sale of roughly 100 million barrels of oil from the nation's Strategic Petroleum Reserve, a cache of federally owned oil stockpiled in salt caves along the Gulf Coast of the U.S., to avert crises in the case of supply disruptions. The U.S. government tapped into the supply last year, after Hurricane Harvey shut down refiners in Texas and Louisiana; in 2011, when civil unrest in Libya led to a supply disruption; and in 2005, after Hurricane Katrina.

Now Congress wants to sell off 45 percent of the reserve by 2027 to help to cover budget expenses. It's not the first time legislators have tapped into the reserve for non-energy expenses: A sale of seven million barrels helped pay for the tax cuts passed in December, and, in 2015, Congress sold 25 million barrels to pay for a medical research bill.

Though oil goes for roughly $60 a barrel today, it's impossible to know exactly how much money the 100 million barrels will bring in over the next 10 years given the volatility of oil prices.

psmag