Lawmakers announce legislation to fund government purchases of oil

A group of lawmakers announced Tuesday that they are introducing legislation that aims to fund a government purchase of oil, boosting an industry that has been hit by reduced demand and international disputes. 

The legislation would give the Energy Department $3 billion with which to purchase oil to be stored in the Strategic Petroleum Reserve (SPR), a move that the Trump administration has also pushed for. 

It is being introduced in the Senate by Sen. John Hoeven (R-N.D.) and in the House by Reps. Lizzie Fletcher (D-Texas) and Michael Burgess (R-Texas). 

The bill has the backing of Republican Sens. John Cornyn (Texas), Kevin Cramer (N.D.), Ted Cruz (Texas), Lisa Murkowski (Alaska) and Dan Sullivan (Alaska), as well as Reps. Kelly Armstrong (R-N.D.) and Henry Cuellar (D-Texas). 

“Purchasing U.S. oil for the SPR will not only benefit our energy producers, but also taxpayers and our national security. This legislation, along with our efforts to stop the global price war, are part of our work to support our domestic energy producers and provide stability to global energy markets,” Hoeven said in a statement. 

It comes after Congress declined to provide funding in the third coronavirus stimulus package for the purchase of 30 million barrels of oil. The Energy Department at the time withdrew a solicitation to purchase the oil and has since said it will rent space in the SPR to oil producers. 

There have also been some calls to include funding for an SPR purchase in the next coronavirus stimulus package. 

“Unfortunately, these funds were held hostage during Phase Three negotiations,” Cramer said in a statement. “Congress should play its part and include this funding in Phase Four.”

Even though the legislation is supported by some House Democrats, it would likely face an uphill battle in the lower chamber. 

Democrats and environmentalists have repeatedly condemned the possibility of a government purchase of oil as a bailout for an industry that contributes to climate change. 

President Trump, meanwhile, has endorsed an SPR purchase, saying he wants to “fill it right up to the top.”

As the market is flooded amid a production standoff involving Saudi Arabia and Russia and decreasing demand linked to the coronavirus, Trump has also floated other actions including tariffs on oil imports and decreasing domestic production.