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DOE Sets SPR Release with New Plans for Refill in 2023

This week, the White House announced another sale of crude oil from the Strategic Petroleum Reserve (SPR) to the global market. The sale of 20 million barrels is part of the “war time bridge” release that President Biden announced in March to shore up crude supplies in response to the war in Ukraine. As part of that effort, 125 million barrels of oil have already been sold and 70 million barrels have been delivered.

The announcement includes an analysis from the Department of the Treasury estimating that the “releases, along with coordinated releases from international partners, have reduced gasoline prices by up to about 40 cents per gallon.” However, some argue that the decrease in gasoline prices over the last several weeks is due to additional factors, especially the economic slowdown from rising interest rates and ensuring demand destruction.

The Biden Administration plans to offer fixed-priced contracts to refill the SPR after 2022 in a bid to encourage domestic production. The White House claims that these fixed-price contacts “give producers the assurance to make investments today, knowing that the price they receive when they sell to the SPR will be locked in place.” For oil and gas companies and their suppliers, such statements might encourage near-term production and investments, particularly given the anti-fossil fuel rhetoric during the initial months of the Presidency. The Department of Energy (DOE), which manages the SPR, will need to draft the rule for the new bidding process.

Critics of the Biden Administration have pointed out that prior sales of crude oil have been sold to China. The U.S. Code that guides SPR dictates the only sale term to be “the highest qualified bidder” and any company registered in the SPR’s Crude Oil Sales Offer Program is eligible to participate in the sale – which allows the crude to be bought by unintended entities such as the Chinese Communist Party. Republicans in the House introduced an amendment to prohibit sales of the SPR to China and sent a letter to DOE Secretary Jennifer Granholm earlier this month.

Energy Workforce remains committed to prioritizing the production of clean, affordable and reliable energy domestically and educating agencies and the Administration on the energy service’s role in oil and gas production. Energy Workforce supports the Administration’s statement giving producers assurances to encourage long-term investments in the industry that supports jobs all over the U.S. and increases American energy security.

To engage with Energy Workforce advocacy on these issues, contact SVP Government Affairs and Counsel Tim Tarpley.


Maria Suarez-Simmons, Director Government Affairs, writes about industry-specific policies for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
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