President Donald Trump’s 2021 budget released on Monday proposed a sale of 15 million barrels of oil from the emergency petroleum reserve to help pay for projects overseen by the Department of Energy.
Budget documents said a sale from the Strategic Petroleum Reserve, or SPR, which stores oil in a series of underground salt caverns on the Louisiana and Texas coast, would help raise funds for priorities including $242 million needed to fix a Naval Petroleum Reserve site in California.
The budget is largely a political document that serves as a beginning point for negotiations with Congress. But with a long-standing boom in domestic drilling, lawmakers from both political parties have supported sales from the reserve this year and next to help fund drug research and improvements at the SPR, where machinery is exposed to moist, salty air.
The sale would be less than the roughly 20 million barrels of oil the U.S. consumes in a day.
The reserve currently holds 635 million barrels, more than required under international agreements seeking to ensure that there are enough global reserves to keep oil markets stabilized in the event of disruptions in petroleum-producing countries.
Laws passed in 2015, before Trump was president, and in 2018 call for about 15 million barrels to be sold through this year and 2021.
Devon Energy had been actively shopping the Permian Basin assets, and others in the Rockies, the past several months.
Production from Occidental Petroleum's Permian Basin unit rose 57% to 250,000 boe/d in the fourth quarter, boosted by its investments in the basin.
A big crowd turned out for an afternoon honoring industry leaders representing all facets of the energy sector.