House to vote on swapping crude oil in SPR
WASHINGTON (Reuters) - The House of Representatives on Thursday will vote on legislation to sell 70 million barrels of light, sweet crude oil from the Strategic Petroleum Reserve and replace it with heavy, sour crude, Democratic leaders said.
"We will also consider legislation on Thursday regarding the strategic petroleum reserve," Majority Leader Steny Hoyer told reporters at a press conference on Wednesday.
Light, sweet oil is a more desirable type of crude because it has less sulfur and is more easily refined, which may encourage refiners to make more gasoline, diesel fuel and other oil products.
If passed, the Consumer Energy Supply Act of 2008 will require sale of 10 percent of the oil in the stockpile, or 70 million barrels, on the open market. Money generated from the sales will be used to purchase heavy crude, which is cheaper.
Sales of the oil would be required to begin within 30 days after the bill is passed and be completed within six months. At least 20 million barrels would need to offered for sale within 60 days of the bill's passage.
Democrats plan to act quickly on Thursday by suspending the chamber's rules for the vote on the bill, which means the bill will require the support of two thirds of lawmakers in the House for it to pass and no amendments can be added.
The White House has refused requests to tap the emergency stockpile, saying the reserve's 706 million barrels of oil is intended only for severe supply disruptions.
Rep. Edward Markey, a co-sponsor of the bill, chastised the White House for not deploying oil from the reserve. He said that in the past such action has lowered oil prices. In 2005 oil prices fell 9.1 percent when President George W. Bush released oil from the stockpile after Hurricane Katrina shut oil output from the Gulf of Mexico.
"Each day that passes without the Bush administration taking this action is another day that American families and our economy fall deeper into crisis," Markey said at a hearing.
The stockpile, created by Congress in the 1970s after the Arab oil embargo, holds oil at four underground storage sites in Texas and Louisiana.
Oil prices settled at a six-week low on Wednesday at $124.44 a barrel, after reaching record levels above $147 a barrel last month.
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