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U.S. Congress should debate whether to reduce the emergency crude oil stored in the Strategic Petroleum Reserve (SPR), because America’s oil production boom has diminished its reliance on imports, U.S. Secretary of Energy Rick Perry said at a Senate hearing on Tuesday.
“Do we need that big of a reserve, particularly with the growth of the pipeline infrastructure we have and the growth in that infrastructure that’s going to occur over the next decade?” Reuters quoted Secretary Perry as saying at a hearing before the U.S. Senate Committee on Energy and Natural Resources.
The Strategic Petroleum Reserve is a U.S. Government complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf Coasts.
As of March 29, 2019, the SPR held a total of 649.1 million barrels of crude oil, including 254.6 million barrels of sweet crude and 394.5 million barrels of sour crude oil.
The current storage capacity of the SPR is 713.5 million barrels.
The SPR was set up in the 1970s when the Arab oil embargo created a fuel crisis in the United States.
According to Secretary Perry, the world has changed a lot since the emergency reserve was created, with the U.S. now the world’s top oil producer. Therefore, Congress should consider what the proper size of the reserve should be and whether the administration should rent part of the storage capacity to private companies, Secretary Perry said.
In February, the U.S. Department of Energy said that it planned to sell up to 6 million barrels of crude oil from the SPR, with deliveries taking place in April and May.
Although the sale does not appear to be aimed at easing possible supply concerns, deliveries will be taking place around the time in which the U.S. waivers for Iran’s oil customers to continue importing Iranian oil will expire in early May. Venezuela’s oil exports are also likely to have further dropped by that time due to the U.S. sanctions on its oil industry.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.