Sen. Bill Cassidy is proposing the nation rent out storage space in the Strategic Petroleum Reserve, which includes facilities in Louisiana.
“If the tanks are empty, let’s put them to use. ... The Strategic Petroleum Reserve is crucial for our national security and this will help keep it in good working order and save taxpayers money at the same time,” the Louisiana Republican says.
The reserve was first discussed in 1944 and created in 1975 following an Organization of Petroleum Exporting Countries embargo of the preceding two years. The SPR can hold 727 million gallons of crude oil that can be dispensed in case of an energy crisis.
Recent legislation allows the federal government to sell off oil from the reserves for profit, and if that leaves extra space in the storage facilities the property should be leased to private companies and foreign nations, Cassidy's office has argued.
In the past three years, Congress has authorized the sale of up to 149 million barrels through 2025 to fund a variety of programs, including new healthcare programs co-sponsored by Cassidy.
Cassiday and Sen. Michael Bennet, D-Colorado, last week announced the introduction of the Strategic Petroleum Reserve Reform Act, which would let the U.S. Department of Energy rent out space. The reserve is maintained in two sites in Texas and a pair of locations in Louisiana — near West Hackberry in Cameron Parish and Bayou Choctaw in Iberville Parish. The sites are in 62 separate underground caverns formed by salt domes.
The last time the federal government tapped the strategic reserve was in 2011, when President Barack Obama permitted the sale of 30 million barrels to offset supply disruptions due to unrest in Libya, according to the Department of Energy website.
Department officials declined to comment on pending legislation.
There are presently 653 million barrels in reserve, though if the government allows more to be drawn down, around half of the Strategic Reserve's capacity could be empty by 2028, Cassidy wrote. He has proposed allowing companies and foreign nations to store their own oil within the available space.
“This pragmatic solution shows that lawmakers can work across the aisle to craft energy policy that puts money back into people’s pockets. We need more bipartisan efforts in Washington that save taxpayer dollars,” Bennet, the co-sponsor, wrote in a statement.
The Louisiana Department of Natural Resources is charged with making sure the facilities are safely maintained and do not damage the environment. Press secretary Patrick Courreges said he had not had a chance to thoroughly review the proposal when contacted last week, but he did not expect the bill would affect the state.
"That doesn't change anything from our perspective," Courreges said.
As long as the Strategic Petroleum Reserve is still running the show, it doesn't matter to DNR who owns the oil being held, he continued.
Environmentalists were dismayed that as oil is removed from the salt domes, more could replace it. Louisiana Bucket Brigade founder Anne Rolfes said the state needs to look toward new wind and solar technology as leaders consider their energy agendas.
"It's disheartening to see that the only development in energy is in fossil fuels. ... It's ignorant on climate change," Rolfes said. "Let's get with it, for God's sake."
Natural Resources has dinged the Strategic Petroleum Reserve before, but Courreges said it was not immediately clear how often and whether the reserves were being reprimanded for minor issues, like having illegible signs, or more serious offenses, like leaks.
The Assumption Parish sinkhole, which regulators say was caused by an “unprecedented?? failure of a man-made cavern deep underground, has expo…
The state has faced criticism for its management of the salt domes, especially after a sinkhole formed at in Assumption Parish in 2012, forcing the evacuation of hundreds of residents. The Bayou Corne collapse, however, was formed due to mining, not the strategic reserve.