U.S. Energy Department Announces Crude Oil Sale From Strategic Petroleum Reserve
The U.S. Energy Department issued a notice of sale of crude oil from the Strategic Petroleum Reserve, or SPR, to fulfill the requirements of the Bipartisan Budget Act of 2015 and the Consolidated Appropriations Act of 2018, according to an Aug. 21 news release. The sale will be conducted with crude oil from three sites – Bryan Mound and Big Hill in Texas, and West Hackberry in Louisiana.
The 2015 law directs the agency to sell 5 million barrels of SPR crude in 2020, while the 2018 law requires the sale of 10 million barrels in the years 2020 and 2021. All proceeds will be deposited in the U.S. Treasury in FY 2020.
The proposal includes a price-competitive sale of up to 10 million barrels of crude. The agency plans to draw down up to 10 million barrels from Bryan Mound and up to 5 million barrels each from Big Hill and West Hackberry. Companies registered in the SPR’s Crude Oil Sales Offer Program are eligible to participate in the sale.
The SPR is a federally-owned stockpile of over 700 million barrels of crude oil to reduce the impact of disruptions in oil supplies. Decisions to withdraw crude oil from the SPR are made by the president under the authorities of the Energy Policy and Conservation Act. In the event of an energy emergency, SPR oil would be distributed by competitive sale.
Bids are due by Aug. 28 and contracts will be awarded by Sept. 5. Deliveries will take place in October and November.