Tag Archives: strategic petroleum reserve

Energy

A Bland but Workable Energy Plan

House Energy and Commerce Committee Chairman Fred Upton and Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski have been working jointly on a passable energy bill. The Congressmen have also been coordinating with Energy Secretary Ernest Moniz to ensure the bill will not get vetoed at the President’s desk.

On infrastructure, the Energy Policy Modernization Act (the Senate version) aims to modernize the electricity grid and add cybersecurity safeguards. There are also provisions to streamline the process for natural gas export projects and maintain the Strategic Petroleum Reserve. The bill provides for the “responsible development of American resources”, to include hydropower, geothermal and bioenergy, as well as traditional resources. Surprisingly, the act creates a new National Park Maintenance and Revitalization Fund to fix the maintenance backlog of the nation’s public parks (the park delayed an estimated $11.5 billion worth of maintenance last year alone).

The drafters of the bill chose to avoid big button issues such as the Keystone XL pipeline, allowing the exportation of crude oil and climate change.

The inclusion of maintaining the Strategic Petroleum Reserve is in direct contrast to the transportation bill being presented by the Senate, which offers to sell part of the reserve to fund the Highway Trust Fund.

This week, 11 environmental groups, including the Sierra Club, the League of Conservation Voters and the Natural Resources Defense Council, have come out against the bill stating that several provisions in the bill could cause detrimental effects to public health and the environment. The groups seemed specifically opposed to expediting liquefied natural gas exports and mineral mining permits because they felt “a stronger vision for accelerating the development and deployment of clean energy” was needed. The House bill received less opposition from these groups since it did not include measures on hydropower and liquefied natural gas exportation.

Energy

The Obsolete Crude Oil Export Ban

In the 1970s, during the Arab oil embargo, gasoline prices soared in the United States. Shortages created long lines of cars at the few gas stations that had fuel. In response, the U.S. began a series of policies that focused on its limited supply and high demand for oil. Policies included efforts to build up the oil reserves, reduction of oil imports and stabilization of the fuel prices. However, by the 1980s and 90s, oil imports to the U.S. were the highest ever and gas prices remained very volatile.

One particular policy was the Energy Policy and Conservation Act by President Ford in 1975. The act established a Strategic Petroleum Reserve, supporting an emergency storage of oil up to 727 million barrels and would last close to 160 days at a maximum withdrawal of 4.4 million barrels a day. The act also permitted the President to restrict exports of energy resources, such as crude oil:

Permits the President to restrict exports of coal, petroleum products, natural gas, or petrochemical feedstocks, and supplies of materials or equipment for exploration, production, refining, or transportation of energy supplies. Authorizes the President to exempt crude oil and natural gas exports from such restriction where he deems such exemption to be in the national interest, such as in recognition of the historic trading relations with Mexico and Canada.

The recent hydraulic fracturing boom, along with the discovery of vast amounts of oil deposits, has changed our domestic energy situation. For the first time since the 1960s, the United States is close to becoming energy independent. Therefore, many of the current policies of the 1970s are now obsolete.

Energy

Former Top Aid to Obama Calls for Exporting Oil

In addition to the most recent Brookings report that shows some of the benefits of lifting the United States ban on crude oil exports, Larry Summers is also calling for an end to the ban.

Summers, the former top economic advisor to President Obama, also agreed with Brookings that lifting the ban would lower domestic gasoline prices, create jobs and increase economic growth.While he is unsure if the president will lift the ban, he says the ban, which was put in place in 1975, can only be removed if the president finds that it is in the nation’s best interest.

Larry Summers also added that the only losers of lifting the ban would be the refineries that are currently benefiting from cheaper global crude prices.

Energy

Hoard and Use Some Resources, Export the Rest

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President Obama’s administration approved expanding natural gas exports back in 2011 and 2013. Cheniere Energy Inc’s Sabine Pass facility will begin exporting to countries in 2015, Freeport LNG in 2017 at up to 1.4 billion cubic feet a day of liquefied natural gas and Cameron LNG, LLC has been added this year to export up to 1.7 billion cubic feet a day.

The United States has an abundant amount of natural resources that we are not using and may never use if technology keeps improving our energy consumption. A recent technological advancement, fracking, increased the volume of a number of our energy sources such as natural gas and oil. In a recent NCPA issue brief, the clear advantage fracking is for America’s energy needs are explained:

Just 15 years ago, analysts predicted America had only 60 years of natural gas supplies available at then current rates of use. Today, natural gas consumption is much higher, and fracking has increased estimated reserves to 100 years or more.

The Strategic Petroleum Reserve (SPR) that can hold up to 727 million barrels of crude oil only. Refined oil reserves do not exist in the United States. If our existing refineries went offline, we would have to import refined petroleum products. This defeats the purpose of having an “emergency” stockpile of petroleum reserves. What good is the oil if you cannot use it? There should be a Strategic Refined Petroleum Reserve (SRPR) of at least equal in size for real emergencies.

We have an abundant amount of natural resources that we are not using and may never use. Resources like our natural gas and oil are very valuable and can be easily exported. We would then boost our nation’s economy and have the money needed to improve the technology at a faster rate making our energy use more efficient.