Under the so-called Buy Low and Sell High Act introduced Monday, the Energy Department would be allotted more freedom to make sales and purchases of as many as 350 million barrels for the nation’s Strategic Petroleum Reserve to maximize profits. The amount — equivalent to almost half the stockpile’s current physical capacity — would be earmarked for swift transactions and designated a new “Economic Petroleum Reserve.”
That’s in contrast to the current approach, where the entire reserve is designed to be a stopgap in times of energy shortages or supply disruptions — not a financial tool. Although the president has wide latitude to initiate drawdowns amid supply shocks, non-emergency sales and purchases are often directed by Congress.
If enacted, the proposal would mark a major shift in the US approach toward emergency crude supplies, which were formally established in the 1970s after the Arab oil embargo as a tool for addressing severe energy supply disruptions. President Joe Biden has unleashed tens of millions of barrels of SPR crude in an effort to tame high prices stoked by Russia’s invasion of Ukraine. Some critics decried the move as a misuse of the reserve.
The bill “helps us regain control of domestic gas prices and protects drivers from future price fluctuations,” Representative Frank Pallone Jr., a Democrat from New Jersey, said in an emailed statement. Pallone introduced the legislation along with eight other Democrats on Monday. An Energy Department spokesperson did not immediately comment on the measure.
The measure would give the Energy Department the power to purchase oil for the economic reserve when prices dip below $60 a barrel and sell when prices climb above $90. Proceeds would be steered to electric vehicle initiatives and a new technical assistance program designed to increase crude throughput at foreign allies’ refineries.
It also contains provisions that would dramatically expand government stockpiles of fuels by building a network of refined petroleum product reserves across the US with the capacity to store 250 million barrels of domestically refined gasoline and diesel. At the same time, the Northeast Home Heating Oil Reserve would quadruple in size to store up to 4 million barrels of petroleum distillate.
The legislation would prohibit barrels from the reserves, both crude and refined products, to be exported to companies owned or influenced by China or nations under US sanctions.