Trump proposes selling off U.S. Oil reserve to trim the country’s debt

The Donald Trump’s administration plan to trim the U.S national debt by selling off half of the nation’s emergency oil stockpile and the entire backup gasoline supply.

Trump’s first complete budget proposal, released Tuesday, would raise $500 million in fiscal year 2018 — and as much $16.6 billion over the next decade — by drawing down the Strategic Petroleum Reserve.

“We think it’s a responsible thing to do,” Mick Mulvaney, head of the White House Office of Management and Budget, told reporters. The “risk goes down dramatically when we have increased domestic production like we have today.”

The proposal also seeks to boost government revenues by allowing drilling in the Arctic National Wildlife Refuge, ending the practice of sharing oil royalties with states along the Gulf of Mexico and selling off government-owned electricity transmission lines in the West. Like much of the budget, those moves are likely to face opposition on Capitol Hill.

Presidential budget proposals typically undergo significant changes in Congress, but they provide insight into White House priorities.

The Strategic Petroleum Reserve currently holds 687.7 million barrels of oil in salt caverns and tanks at designated locations in Texas and Louisiana, which allow for quick distribution when natural disasters or unplanned incidents occur. The White House budget plan calls for selling 270 million barrels of reserve oil over the next decade beyond already planned sales, and it proposes closing two of the four Gulf Coast reserve sites. After all those sales, the reserve would be about 260 million barrels, it said.

The plan also seeks to close the Northeast Gasoline Supply Reserve, an emergency gasoline stockpile created in 2012 after Hurricane Sandy left some New York gas stations without fuel. It holds 1 million barrels of gasoline, all of which would be sold in fiscal year 2018 under the White House proposal.

Laws enacted in 2015 and 2016 call for the sale of nearly 190 million barrels of oil from the strategic petroleum reserve between 2017 and 2025 to raise money for unrelated government programs. Those sales would cut the reserve by about 27 percent. Slashing the stockpile in half beyond that would require legal changes, as the reserve must now contain a minimum of 450 million barrels.

Critics said the move risks undercutting an essential safeguard created after the 1973 oil embargo to help the U.S. weather supply shocks.

“The Strategic Petroleum Reserve is America’s only formal short-term line of defense against oil supply disruptions and price spikes,” said Robbie Diamond, president of Securing America’s Future Energy, a group aiming to pare U.S. dependence on oil. “While we’ve been lulled into a false sense of complacency by the current period of relatively low oil prices, disruptions and volatility in the oil market are alive and well.” Trump is also seeking to raise money with two other proposed changes — one that would be cheered by the oil industry and another that would draw its ire.

persecondnews.com

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