Plan to Revamp the Emergency Oil Reserve

The Obama administration has sent Congress plans to revamp the Federal emergency oil reserve. The plan could result in the sale of about 8 million barrels from the Strategic Petroleum Reserve (SPR) later in the year to pay for the changes. Three dedicated marine terminals would be added to the SPR at a cost of $1.5 to $2 billion. The terminals would support the 60 underground storage caverns in Texas and Louisiana maintained by the Department of Energy. Aging equipment (dating from the late 1990’s), firefighting and security measures would be fixed or replaced at SPR locations. Created in 1975 by Congress, the SPR holds 695 million barrels of crude oil. Heavy rain over the past decade has caused salt erosion of equipment and congested pipelines make it difficult for SPR to supply oil in an emergency. Congress will need to vote to approve sale of crude oil to pay for the updates.