[Congressional Record Volume 143, Number 57 (Tuesday, May 6, 1997)]
[Senate]
[Page S3999]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA (for himself, Mr. Bingaman, and Ms. Landrieu):
  S. 698. A bill to amend the Energy Policy and Conservation Act to 
authorize the Secretary of Energy, by lease or otherwise, to store in 
underutilized strategic petroleum reserve facilities petroleum products 
owned by foreign governments or their representatives, and for other 
purposes; to the Committee on Energy and Natural Resources.


           the strategic petroleum reserve replenishment act

  Mr. AKAKA. Madam President, today I am introducing the Strategic 
Petroleum Reserve Replenishment Act, a bill to purchase oil for the 
strategic petroleum reserve using revenue obtained from leasing SPR 
storage capacity. Senators Bingaman and Landrieu join me in sponsoring 
this measure.

  The strategic petroleum reserve is the cornerstone of U.S. energy 
security. During an oil emergency, the SPR is America's insurance 
policy against oil price shocks and economic disruption.
  However, our insurance policy is not providing the level of coverage 
we need. Because of declining U.S. oil production our dependence on 
imports is dangerously high, and the situation will grow worse in the 
coming decade. According to the Energy Information Administration, U.S. 
dependence on oil imports will rise from the current level of 50 
percent to 60 percent in the year 2010. As oil imports increase, the 
strategic petroleum reserve will provide less and less energy security.
  The logical response should be to stockpile more oil. Yet, exactly 
the opposite is occurring. Some $315 million in revenue from the 
Operation Desert Storm drawdown was diverted to pay operating expenses 
rather than purchase replacement oil. Annual purchases of crude for the 
SPR have been halted, and we have begun to sell oil from the reserve as 
a deficit reduction measure. During fiscal years 1996 and 1997, the 
Department of Energy sold $450 million barrels of oil for this purpose. 
Congress and the administration share the blame for the sale of these 
strategic assets.

  The most alarming development of all, however, was last week's 
announcement by the Department of Energy that it is seeking public 
comment on the future of the strategic petroleum reserve. The first 
question on the DOE comment notice was ``Should the United States 
continue to maintain the SPR?'' That's like asking whether the Titanic 
should carry life boats. The strategic petroleum reserve provides an 
essential umbrella of energy security and the importance of this asset 
will increase as we become more dependent on oil imports.
  Like many Federal programs, the strategic petroleum reserve has 
become a victim of the balanced budget process. Congress and the 
administration are unable to muster the political will, or the scarce 
Federal dollars, to maintain or expand our emergency reserve.
  My colleagues and I on the Energy Committee have proposed a modest 
initiative to purchase new oil for the reserve. The bill we have 
introduced today would finance the purchase of oil for the SPR using 
revenue obtained from the lease of excess SPR storage capacity.
  With its current inventory, the SPR has more than 100 million barrels 
of available, but unused storage. A number of foreign governments have 
expressed interest in storing oil in the U.S. reserve to meet 
International Energy Agency responsibilities. Storing oil in our gulf 
coast facility would be far less expensive for these countries than 
constructing new storage capacity. The cost of constructing new 
capacity exceeds $15 per barrel, whereas the annual operating cost at 
SPR facilities is less than 50 cents per barrel. All of the revenue 
generated from such leases would be dedicated to the purchase of crude 
oil for the U.S. reserve.
  During consideration of last year's reconciliation bill, the Senate 
adopted a proposal I offered that was nearly identical to the 
legislation I have introduced today. The Clinton administration has a 
mixed response to this proposal. They support legislation giving DOE 
the authority to lease idle SPR capacity to foreign governments, but 
they have reservations about dedicating leasing revenue for the 
purchase of new oil.
  The legislation I am introducing today is an essential first step 
toward a more rational energy security policy. As the Senate Energy 
Committee considers the reauthorization of the strategic petroleum 
reserve, I will work with my colleagues on the committee to ensure that 
this measure is included as an amendment.
  Madam President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 698

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Strategic Petroleum Reserve 
     Replenishment Act''.

     SEC. 2. LEASE OF EXCESS STRATEGIC PETROLEUM RESERVE CAPACITY.

       Part B of title I of the Energy Policy and Conservation Act 
     (42 U.S.C. 6231 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 168. UNDERUTILIZED FACILITIES.

       ``(a) In General.--Notwithstanding section 649(b) of the 
     Department of Energy Organization Act (42 U.S.C. 7259(b)) and 
     any other provision of this title, the Secretary, by lease or 
     otherwise, for any term and under such other conditions as 
     the Secretary considers necessary, may store in an 
     underutilized Strategic Petroleum Reserve facility a 
     petroleum product owned by a foreign government or its 
     representative.
       ``(b) Exclusion From Reserve; Export.--A petroleum product 
     stored under subsection (a)--
       ``(1) is not part of the Reserve;
       ``(2) is not subject to part C; and
       ``(3) may be exported from the United States.
       ``(c) Use of Funds.--Funds resulting from the leasing or 
     other use of a Reserve facility under subsection (a) shall be 
     available to the Secretary, without further appropriation, 
     for the purchase of petroleum products for the Reserve.''.
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