Washington, D.C.—Responding to reports that the Trump administration budget proposal seeks to sell 50 percent of the Strategic Petroleum Reserve (SPR) to offset general government spending, Securing America’s Future Energy (SAFE) warns that such a move increases the country’s exposure to global oil market disruptions and reduces our energy security.
“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,” said SAFE President and CEO, Robbie Diamond. “The SPR is America’s only formal short-term line of defense against oil supply disruptions and price spikes—the current trend of seeing this resource as a revenue generator is misguided, as is risking drawing it below International Energy Agency (IEA) compliance volumes.”
“Furthermore, the SPR only works if it can get its petroleum to market quickly and efficiently in the event of a supply emergency. SAFE recommends that the SPR not be drawn down for general government spending, as reducing it to such low volumes undermines the ability to use the SPR for its intended purpose. Finally, any sale of the SPR should be dedicated to energy expenditures with the goal of improving our country’s energy security,” Diamond added.
Maintaining strategic stockpiles contributes to energy diplomacy, including U.S. membership in the International Energy Agency. Drawing SPR volumes below a certain threshold not only risks undermining the country’s commitment to the terms of membership—it creates a logistical challenge that lessens the effectiveness of existing infrastructure to draw oil quickly from the reserve at a time of crisis.
The SPR was developed in response to oil supply shocks from the 1973 OPEC oil embargo that caused U.S. GDP to plunge by six percent and unemployment to double to nine percent within a two-year period. With oil powering 92 percent of the transportation system, the U.S. remains vulnerable to oil price swings and supply interruptions, and the SPR serves as a critical backstop against geopolitical volatility or catastrophic weather events.
In addition to protecting and modernizing the SPR, SAFE supports long-term policies to improve U.S. energy security, including increasing domestic production, strengthening fuel economy standards, and increasing deployment of advanced fuel and autonomous vehicles.
About Securing America’s Future Energy (SAFE)
Securing America’s Future Energy (SAFE) is an action-oriented, nonpartisan organization that aims to reduce America’s dependence on oil. Near-total dependence on petroleum in the transportation sector undermines the nation’s economic and national security, and constrains U.S. foreign policy. To combat these threats, SAFE advocates for expanded domestic production of U.S. oil and gas resources, continued improvements in vehicle fuel efficiency, and the advancement of alternative fuels in the transportation sector including electric vehicles and natural gas trucks. In 2006, SAFE joined with General P.X. Kelley (Ret.), 28th Commandant of the U.S. Marine Corps, and Frederick W. Smith, Chairman, President, and CEO of FedEx Corporation, to form the Energy Security Leadership Council (ESLC), a group of business and former military leaders committed to reducing the United States’ dependence on oil.
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