Trump Proposes Selling Off Half U.S. Strategic Oil Reserve

[blueskyline]

We gotta make room for all that oil the US will buy from Iraq (shhh....with all of our Dinar )....https://www.bloomberg.com/politics/articles/2017-05-23/trump-proposes-selling-off-half-the-u-s-strategic-oil-reserve.....

Trump Proposes Selling Off Half U.S. Strategic Oil Reserve

by 

Catherine Traywick

 and 

Jennifer A Dlouhy

May 22, 2017, 8:00 PM CDTMay 23, 2017, 11:16 AM CDT

• Budget plan also calls for sale of post-Sandy gasoline stash
• Proposal Includes Alaska Oil Leasing, Gulf Royalties Repeal

 

 

 

Trump's Plan to Sell Off Half of U.S. Oil Reserve

 

 

 

Trump's Plan to Sell Off Half of U.S. Oil Reserve

The White House plan to trim the national debt includes selling off half of the nation’s emergency oil stockpile and the entire backup gasoline supply, part of a broad series of changes proposed by President Donald Trumpto the federal government’s role in energy markets.

Trump’s first complete budget proposal, released Tuesday, would raise $500 million in fiscal year 2018 -- and as much $16.6 billion over the next decade -- by drawing down the Strategic Petroleum Reserve.

“We think it’s a responsible thing to do," Mick Mulvaney, head of the White House Office of Management and Budget, told reporters. The “risk goes down dramatically when we have increased domestic production like we have today.”

The proposal also seeks to boost government revenues by allowing drilling in the Arctic National Wildlife Refuge, ending the practice of sharing oil royalties with states along the Gulf of Mexico and selling off government-owned electricity transmission lines in the West. Like much of the budget, those moves are likely to face opposition on Capitol Hill.

Presidential budget proposals typically undergo significant changes in Congress, but they provide insight into White House priorities.

The Strategic Petroleum Reserve currently holds 687.7 million barrels of oil in salt caverns and tanks at designated locations in Texas and Louisiana, which allow for quick distribution when natural disasters or unplanned incidents occur. The White House budget plan calls for selling 270 million barrels of reserve oil over the next decade beyond already planned sales, and it proposes closing two of the four Gulf Coast reserve sites. After all those sales, the reserve would be about 260 million barrels, it said.

The plan also seeks to close the Northeast Gasoline Supply Reserve, an emergency gasoline stockpile created in 2012 after Hurricane Sandy left some New York gas stations without fuel. It holds 1 million barrels of gasoline, all of which would be sold in fiscal year 2018 under the White House proposal.

Congressional Measures

Laws enacted in 2015 and 2016 call for the sale of nearly 190 million barrels of oil from the strategic petroleum reserve between 2017 and 2025 to raise money for unrelated government programs. Those sales would cut the reserve by about 27 percent. Slashing the stockpile in half beyond that would require legal changes, as the reserve must now contain a minimum of 450 million barrels.

Critics said the move risks undercutting an essential safeguard created after the 1973 oil embargo to help the U.S. weather supply shocks.

"The Strategic Petroleum Reserve is America’s only formal short-term line of defense against oil supply disruptions and price spikes," said Robbie Diamond, president of Securing America’s Future Energy, a group aiming to pare U.S. dependence on oil. "While we’ve been lulled into a false sense of complacency by the current period of relatively low oil prices, disruptions and volatility in the oil market are alive and well."

Oil, Gas Proposals

Trump is also seeking to raise money with two other proposed changes -- one that would be cheered by the oil industry and another that would draw its ire.

He projects raising $1.8 billion over the next decade by opening up the 19-million-acre Arctic National Wildlife Refuge to oil and gas development. The idea of allowing drilling in the refuge for its estimated 12 billion barrels of crude has long been championed by Alaska Republicans, including Senator Lisa Murkowski, who heads the appropriations subcommittee in charge of Interior spending.

But it’s anathema to environmentalists, who have successfully blocked ANWR drilling plans from advancing on Capitol Hill by stoking concerns about threats to the polar bears, caribou, wolves and other animals that live in the territory.

"For 30 years, Congress has voted nearly 50 times on whether or not to drill in the Arctic National Wildlife Refuge, yet our nation’s largest and wildest refuge remains protected today, thanks to the overwhelming support of the American people," said Kristen Miller, interim executive director of the Alaska Wilderness League.

Trump’s budget request suggests ANWR leasing could begin to pay off in fiscal 2022, with $100 billion in projected revenue that year. In addition to environmentalists’ opposition, it’s unclear how much appetite energy companies would have for the reserve. Monster discoveries there could yield decades of oil production, but the cost of operations in northern Alaska could discourage the activity amid modest crude prices and the domestic shale boom.

Offshore Royalties

Trump’s budget request also revives an Obama-era proposal to cut the payments Gulf Coast states collect from offshore drilling near their coastlines, a change that would translate to an extra $3.56 billion in federal revenue over the next decade. Under a 2006 law, four Gulf states -- Alabama, Louisiana, Mississippi and Texas -- now claim 37.5 percent of the royalties that oil and gas companies send the federal government in exchange for drilling rights and production on some Gulf of Mexico leases.

Trump’s move echoes Obama’s attempt to divert some of those royalty payments. And his bid to quash state revenue sharing is likely to meet the same fierce resistance that Obama’s plans did. Just as they did under Obama, Gulf Coast lawmakers will fight to defend those payments, which help support restoration programs.

The budget also proposes restarting the Nuclear Waste Fund Fee in 2020, a sign that the administration is planning to have a permanent storage site for that waste up and running by that time -- presumably at a site in Nevada known as Yucca Mountain. That fee would raise nearly $3.1 billion over 10 years, it estimates.

The White House foresees $2.4 billion in additional revenue in 2019 from the sale of federally-owned transmission lines in the West. Those power lines mostly carry electricity from government-owned dams to metro areas.

[bostonangler]

It's called a "Strategic Reserve" for a reason... One bad day in the Middle East and that becomes a very important part of our national security. If you are old enough to remember The Oil Embargo, you realize this is something to consider very carefully.

 

B/A

[8th ID]

We have more than enough oil. I think its a smart move. Reagan basically did the same thing to show OPEC we are not tied to them like they want us to be. OPEC cuts production, the price starts to rise, we start drilling and uncapping wells and start selling. What we sell in reserves right now will be put right back.

[bostonangler]

15 minutes ago, 8th ID said:

We have more than enough oil. I think its a smart move. Reagan basically did the same thing to show OPEC we are not tied to them like they want us to be. OPEC cuts production, the price starts to rise, we start drilling and uncapping wells and start selling. What we sell in reserves right now will be put right back.

 

We sell most of our oil, then turn around and buy oil from the middle east... Do you know why? Because our government makes money on every barrel of oil sold to anyone anywhere. It's called petro dollars. We will never piss off the Saudis. We know their government supports the terrorist and this week it was announced we will be selling them 150 BILLION dollars in weapons... If you don't believe some of those weapons will be used to kill Americans, then you will never get it.

 

B/A

[Flash101]

I'm gonna go with fake news for $500 PLZ.

101

[crane]

Its amazing when the oil companies were drilling, they hit the the mother load In Purdoe Alaska, they found more oil there than whats under SAUDI ARABIA  ,guess what??? capped it off, and the few that new, were told to keep there mouths shut , we are so awash in oil, and they continue to want to explore for more, I am starting to think the powers that be, want to pull off the same price control that the Diamond companies have done for many years, to control the prices ,you have to control the amount of product, this keeps the price up,the oil game is looking to be the same, taking over as many countries as we can that are rich in oil ,the New World Order, and I don't care for what Trump wants to do cutting back on our oil reserves ,if he wants to cut spending he could start with all  this Foreign Aid we keep handing out to all these countries ,that would make one hell of a dent into the Budget, over a decade, but it seems that we start cutting off some of the important stuff like this oil Reserve, not smart at all, you never give up plan B no matter how bad things get .