Bush Budget: $168M to Begin SPR Capacity Expansion

U.S. President George W. Bush on Monday proposed to spend $168 million in his 2008 budget primarily for administrative costs relating to the expansion of the nation’s Strategic Petroleum Reserve from its current capacity of 727 million barrels to 1.5 billion barrels by 2027.

As previously announced, the president separately proposed to authorize the filling up current capacity, from its current 691 million barrel level, through 2007 and 2008 using federal royalty oil.

The expansion and fill is part of the administration’s plan to reduce the vulnerability of the U.S. to energy supply disruptions, such as those caused by hurricanes, embargoes or other geopolitical problems.

In September 2005, funds were transferred from the SPR Facilities Account to finance drawdown operations associated with Hurricane Katrina. The funds were returned to the SPR Facilities Account in 2006. In response to the hurricane, the DOE loaned 9.8 million barrels of oil to refiners and sold 11 million barrels from the SPR. The administration said in 2007 that DOE will use balances in the account to purchase oil.

Dow Jones Newswires