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1 1 (June 16, 2020)

handle is hein.crs/govdgzx0001 and id is 1 raw text is: 0r;0 June 16, 2020 Fossil Energy Petroleum Accounts: FY2021 Appropriations In February 2020, the U.S. Department of Energy (DOE) submitted to Congress its FY2021 Budget Request, including appropriations for the Fossil Energy Petroleum Accounts. These accounts (Figure 1) consist of three energy security programs: the Strategic Petroleum Reserve (SPR), Northeast Home Heating Oil Reserve (NEHHOR), and the Naval Petroleum and Oil Shale Reserve (NPOSR). The Office of Petroleum Reserves, within the Office of Fossil Energy, manages these accounts. ,,r h-e.'- Ni. P ,-- C . - s -'e ',- The SPR, authorized by the Energy Policy and Conservation Act (P.L. 94-163) in 1975, consists of a stockpile of crude oil kept in caverns built within naturally occurring salt domes in Louisiana and Texas. The SPR is the U.S. emergency stockpile of crude oil, providing strategic and economic security against foreign and domestic disruptions in U.S. oil supply. The program provides a deterrent against energy supply disruptions and fulfills U.S. obligations under the International Energy Program agreement, which avails the United States of International Energy Agency (IEA) assistance through its coordinated energy emergency response plans. According to DOE data from June 3, 2020, the SPR held 647.8 million barrels of crude oil. According to its FY2021 Budget Justification, DOE is requesting approximately $187 million in appropriations for Facilities Development and Operations ($159.2 million) and for Management of SPR Operations ($27.9 million). A component of the SPR, the Northeast Gasoline Supply Reserve (NGSR) consists of 1 million barrels of government-owned refined petroleum products (gasoline blend stock) in storage in the Northeast. Former Secretary of Energy Ernest Moniz, under direction of President Obama, authorized the creation of the NGSR in 2014, in response to the gasoline shortage following Superstorm Sandy in 2012. The NGSR was fully funded through FY2017 by proceeds from a 2014 SPR test sale. DOE's FY2021 budget request, similar to the FY2020 request, does not request appropriations for the NGSR. It instead seeks to dissolve the program and sell the 1 million barrels of gasoline blend stock. DOE would deposit the proceeds from the NGSR sale into the SPR Petroleum Account. ~4'N rS~.8flAcc oun The SPR Petroleum Account funds SPR petroleum acquisition, transportation, and drawdown activities. As noted, DOE is requesting to eliminate the NGSR and sell its contents. DOE would deposit up to $19 million in proceeds from the proposed sale into the SPR Petroleum Account. DOE would use the funds to cover costs associated with congressionally directed sales of crude oil from the SPR. DOE can also use appropriations in the SPR Petroleum Account to purchase crude oil to fill the SPR. Statute (42 U.S.C. §6240) identifies the various objectives, procedures, and other authorities for the Secretary of Energy to acquire crude oil for the SPR. The Secretary may acquire petroleum products through purchase or exchange. For purchases, Congress must appropriate funds to the SPR Petroleum Account. Figure I. Requested and Appropriated Fossil Energy Petroleum Accounts Funding, FY2019-FY202 I $ in Millions $300 t Strategic Petroieeum $250 Reserve (SPR) $200 Northeast Gasolhne Sup0 ply Reserve ISPR) $150 ,', SPR Petroleum Account {SPR) $ 1 0 0 ii N o rt bea t H o re $5 Heating Oi Reserve ..s Nava Petroleum and $ 0 O i .. .. .. .. .. . ... ... .. ... .. FY19 FY20 FY21 Enacted Enacted Request Source: U.S. Department of Energy, FY2021 Congressional Budget Request, Budget in Brief, Office of the Chief Financial Officer, February 2020, p. 30. Notes: Does not include offsets. The Strategic Petroleum Reserve, Northeast Gasoline Supply Reserve, and SPR Petroleum Account are all components of the Strategic Petroleum Reserve security program. In response to the near doubling of heating oil prices in some Northeastern states during the winter of 1999-2000, Congress authorized the 2 million barrel Northeast Home Heating Oil Reserve (NEHHOR) in the Energy Act of 2000 (P.L. 106-469). NEHHOR is not part of the SPR, but is a separate reserve with its own criteria for release. As an emergency stockpile of government-owned heating oil, Congress intended NHHOR to contain roughly 10 days (the time required for ships to transport heating oil from the Gulf of Mexico to the New York Harbor) worth of demand by the Northeastern states at the time. The first emergency use of NEHHOR was in 2012 in response to Superstorm Sandy. p\w -- , gnom goo mppm qq\ a , q 'S I 11\111WILiN,

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