The U.S. House of Representatives on March 30 approved an amendment offered by U.S. Rep. Ron Estes (R-KS) that would protect America in the event of a national emergency by requiring the U.S. Department of Energy to refill the Strategic Petroleum Reserve (SPR) at a competitive market rate.
Sen. Estes proposed the amendment to the Lower Energy Costs Act, H.R. 1, a massive bill cosponsored by 49 Republicans that the House also passed on March 30 with a 225-204 vote.
H.R. 1, which would provide for the exploration, development, importation, and exportation of energy resources, including oil, gas, and minerals, now heads to the U.S. Senate for action.
Prior to his chamber’s vote, Rep. Estes spoke on behalf of his amendment on the House floor.
“Since draining the SPR to address an energy and inflation crisis of his own making, President Biden and his administration continue to abdicate their responsibility to replenish the reserve,” said the congressman.
In October 2022, the White House announced that it would implement a ‘first-of-its-kind rule” establishing a system of fixed-rate price contracts for replenishing the SPR, he said, noting that the administration’s policy calls for purchasing crude oil for the SPR when prices are at or below about $67-$72 per barrel.
“This untested fixed-price bid system imposed by the White House has allowed the administration to ignore its responsibility to resupply the SPR to the detriment of the United States’ economy and national security,” said Rep. Estes.
The congressman said that his amendment would remedy this problem by requiring the U.S. Department of Energy (DOE) to use the commonly accepted index-based pricing bid process, which historically has been used to solicit contracts to refill the SPR and is the standard pricing regime used in the global oil and gas market.
“Using this more accepted metric, DOE would competitively bid at the market rate for crude oil when buying for the SPR,” he said. “This bidding system will ensure that DOE will meet its obligation to refill the SPR and not circumvent that obligation with an arbitrary price ceiling.”