July 24, 2015 at 6:00 am ET
Murkowski’s Lonely Defense of the Oil Reserve
Sen. Lisa Murkowski (R-Alaska) has spent the last week ripping into efforts to sell off America’s Strategic Petroleum Reserve to pay for a highway bill. But aside from pleading with her colleagues there’s little she can do to tilt the scales.
Murkowski’s endeavors have included an impassioned, nearly half-hour floor speech, a meeting with Secretary of Energy Ernest Moniz, and a tour of the salt caverns in Louisiana, home to part of the petroleum reserve. She also introduced legislation, as part of a broad energy bill, that aims to prevent Congress from using the oil stockpile as an ATM.
But that hasn’t stopped Majority Leader Mitch McConnell (R-Ky.) from proposing to sell part of the SPR to help fund a contentious transportation bill.
To Murkowski, chair of the Senate Energy and Natural Resources Committee, that makes no sense. “We’re considering eroding the SPR in an effort to pay for asphalt,” she told reporters Thursday.
It’s not just that highway funding falls outside the scope of what the SPR was intended for – to soften the blow of a supply shock – it’s also a bad business deal, she said: “When oil is hovering just barely above $60 a barrel, why would we think it is a sane and smart idea to be selling off any of our [SPR] right now, much less 101 million barrels of it.”
Oil prices are roughly half what they were at this point last year, meaning a sale at current prices would not generate as much revenue as it would have under previous (and potentially future) market conditions.
Even if oil prices were high, however, Murkowski would have no interest in using the SPR to fund highway legislation. She offered up one alternative during the news conference: closing a tax loophole so that oil derived from tar sands is treated the same as crude oil for purposes of the federal excise tax on petroleum; this would generate about $1.6 billion, money that could be used to fund the highway bill, she said.
In defending the SPR, Murkowski has the backing of other members of the energy committee, including ranking member Maria Cantwell (D-Wash.) But their message might be falling on deaf ears elsewhere in the Senate. Asked about her legislative and lobbying efforts outside the committee, Murkowski said: “Let’s just put it this way: I am continuing to educate colleagues on a daily basis.”
As a member of the International Energy Agency, the U.S. is obligated to maintain a reserve of crude oil or production products equivalent to at least 90 days worth of net imports. The current 700 million-barrel stockpile holds about 137 days of import protection, according to the Department of Energy. That’s giving some members of Congress, Murkowski said, a false sense of surplus.
DOE also estimates the SPR’s storage infrastructure needs about $2 billion to repair and upgrade.
The third-term Senator included language to modernize the SPR and reaffirm parameters for when a sale is appropriate — when the revenue is used to enhance energy security. But even if the bill became law, it wouldn’t be enough to prevent future raids on the SPR; as one energy committee aide put it: “An act of Congress can’t tie Congress’s hands.”