The U.S. currently maintains one of the world’s largest stockpiles of government owned oil, the Strategic Petroleum Reserve (SPR). In response to the 1970s oil embargo and supply shocks, the U.S. created the SPR to ensure access to oil in the event of a severe energy supply interruption. The current SPR consists of four storage sites, housing 694 million barrels of oil that is equivalent to at least 90 days of net oil imports. The SPR has only been tapped three times, but the recent budget deal provides that the government sell 58 million barrels of oil to fund a portion of the $80 billion in new spending outlined in the budget.
This is not the first time the SPR has been suggested as a source of revenue for new spending. Earlier this year, the 21st Century Cures Act, which passed the House, proposed the sale of 80 million barrels of oil to raise funds for drug research, and the FAST Act, (originally titled the DRIVE Act) which passed both the House and Senate, would sell 66 million barrels to pay for highway infrastructure.
There are conflicting views on whether the U.S. should sell none, all or a portion of the SPR. Some believe the federal government should only use revenue from SPR sales to fund improvements to national energy security, while others say the SPR should remain untouched because they view it as vital for our economy. On the other hand, SPR critics argue that the SPR is unnecessary since the U.S. is now a bigger oil producer, the global market is more complex than in the 1970s and the amount of privately owned crude oil is sufficient to protect the U.S. from temporary supply interruptions. Many of them say the SPR should be sold completely with revenues going towards the national debt.