Rush Opening Remarks at the DOE Modernization Hearing
WASHINGTON — Today, U.S. Representative Bobby L. Rush (D-Ill.), Ranking Member of the Energy Subcommittee of the Energy and Commerce Committee Subcommittee delivered the following opening remarks at a Subcommittee on Energy hearing on “DOE Modernization: Legislation to Authorize a Pilot Project to Commercialize the Strategic Petroleum Reserve.”
Thank you, Mr. Chairman, for holding this important hearing today examining legislation to authorize a pilot project to commercialize the Strategic Petroleum Reserve, or SPR.
As you know, Mr. Chairman, subcommittee staff from both the minority and majority sides worked together on this bipartisan bill and I am pleased to cosponsor this legislation with my good friend and colleague, Joe Barton of Texas.
Mr. Chairman, since the inception of the SPR, which was established as a result of the oil shortages of the 1970’s, the energy portfolio of the U.S. has changed dramatically.
In fact, the U.S. is expected to go from a heavy importer of foreign oil, to become the global leader in oil exports by as early as next year, according to the International Energy Agency, or IEA.
As a result of these shifting dynamics, it is important for policymakers, including Members of this Subcommittee, to examine important questions, including if there is still a need for the SPR, and if so, how large should it be and how should it be configured.
It is my hope, Mr. Chairman, that the pilot program outlined in this bill will help inform our decisions moving forward regarding the feasibility of leasing out all or part of the SPR to the private sector or to foreign governments that do not pose a national security risk.
As we will discuss today, Congressionally-mandated sales of SPR oil has provided an opportunity to potentially lease the subsequent unused space to private companies and/or foreign governments as a way to maximize taxpayers’ return on investment.
Mr. Chairman, I am also pleased that we have representatives from both the Department of Energy (DOE) and the Government Accounting Office (GAO) here today, among other witnesses, as both agencies have issued reports to help guide our decision-making on matters regarding the SPR.
Unfortunately, there appears to be some discrepancies between the two agencies over the final recommendations that GAO made in its May report entitled: “STRATEGIC PETROLEUM RESERVE: DOE
Needs to Strengthen Its Approach to Planning the Future of the Emergency Stockpile.”
First, Mr. Chairman, DOE appears to concur with GAO’s recommendations to supplement its 2016 review by conducting additional analysis regarding the objectives and purpose of the SPR, taking into account additional factors such as market projections and private sector response.
DOE also agreed with GAO’s recommendation to periodically reexamine the size of the SPR, with analysis looking at the costs and benefits of the SPR for a variety of different sizes.
DOE also appears to concur with GAO’s findings that the agency considers options for the long-term configuration of the SPR, after the impact of Congressionally-mandated sales of SPR oil are taken into account.
Based on the testimony, it appears that some of these recommendations will be included as part of DOE’s SPR Post-Sale Configuration Study, expected to be completed in October of this year.
The largest area of disagreement, however, appears to be over GAO’s recommendation that DOE conduct a cost/benefit analysis of establishing regional product reserves around the country in areas that have been identified as vulnerable to fuel supply disruptions.
Mr. Chairman, now that we have representatives from both agencies here with us today, I look forward to engaging all of our witnesses in order to have a better understanding of the direction Congress should be moving as we make decisions regarding the size, scope, and makeup of the SPR moving forward.
Thank you, Mr. Chairman, and with that I yield back the balance of my time…