(MENAFN- Khaleej Times) White House's 2018 budget proposal proposes raising nearly $16.6b by 2027 by gradually selling millions of barrels A Trump administration plan to sell off half the US emergency crude oil stockpile to help balance the budget faces opposition in Congress, with lawmakers from both parties worried the proposal would undermine the drilling industry and make the country vulnerable to supply shocks.
The White House's 2018 budget proposal, sent to Congress, proposes raising nearly $16.6 billion by 2027 by gradually selling millions of barrels from the reserve, which now holds about 688 million barrels of oil in underground caverns in Texas and Louisiana. News of the proposal had briefly sent oil prices tumbling on concern it would oversupply the market, but prices recovered and finished slightly higher on hopes that the Opec and other countries would extend supply cuts.
"We should not be selling oil from the Strategic Petroleum Reserve now," said Senator John Hoeven, a Republican from North Dakota, a leading oil producer state. "We should use the SPR for emergencies, and selling now would disrupt the markets."
The SPR sell-off plan is part of a broader White House proposal to balance the US budget that is meant as starting point to debate policy with Congress - which will ultimately pass its own version.
Whether the SPR proposal will survive the budget process could depend in part on Republican Senator Lisa Murkowski of Alaska, a member of the appropriations committee and the head of the chamber's energy panel. In 2015, when Congress was considering selling a modest amount of oil from the reserve to help fund a transportation bill, Murkowski opposed the idea, saying the reserve should not be used as an ATM.
Murkowski did not directly address the SPR plan in a statement on Tuesday, but she said "a President's budget is more of a vision than anything else." Efforts to reach Murkowski on Tuesday were not successful.
Murkowski's Democratic counterpart on the energy panel, however, raised concerns that liquidating half of the reserve would run counter to the original purpose of the facility, which Congress created in 1975 to protect against global oil disruptions that could harm the US economy.
"We are not going to let Donald Trump auction off our energy security to the highest bidder," Senator Maria Cantwell of Washington said in an e-mail.
Lawmakers from both parties also said releasing oil from the SPR could dampen crude prices and hurt drilling companies still recovering from a price crash in 2014. Trump had campaigned on a promise to revive the drilling industry.
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