Oil stockpile system needs upgrades, Obama admin says

The country’s emergency oil reserve system and its infrastructure need hundreds of millions of dollars to keep up with its demands, the Obama administration said.

The Energy Department said in a report released Wednesday that the Strategic Petroleum Reserve (SPR), which includes 60 underground tanks on the Gulf of Mexico coast and holds 695 million barrels of oil, would face problems achieving its stated purpose of releasing oil to the market in shortage situations. 

The department is asking Congress for $375.4 million to modernize the system.

{mosads}“Most of the critical infrastructure for moving crude within the SPR has exceeded its serviceable life, increasing maintenance costs and decreasing system reliability,” the report stated.

The Energy Department report also said that if the SPR could still serve its purpose if it held as few as 530 million barrels.

The report was commissioned last year, when Congress ordered the Energy Department to sell 124 million barrels of oil to help pay for a major transportation bill.

Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska), who has opposed efforts to significantly slash the SPR, welcomed the report.

“Our nation’s strategic energy reserve is set to enter an era of unprecedented drawdowns, fundamentally transforming its nature and function,” she said in a statement.

“We have never before sold off so much oil, at such a pace, for such a long period of time,” Murkowski continued. “Both Congress and the administration should consider carefully the Department of Energy’s analysis before we embark on any grand redesign of our energy security architecture.”