World News

U.S. lawmakers introduce bill to fund oil purchase for emergency reserve

WASHINGTON (Reuters) – A bipartisan group of U.S. lawmakers introduced a bill on Tuesday providing $3 billion to buy oil for the national emergency reserve as a way to help energy companies hit by the plunge in crude prices.

The bill, which would have to be passed in the Senate and the House of Representatives and signed by President Donald Trump, was introduced by Senator John Hoeven and Representative Michael Burgess, both Republicans, and Representative Lizzie Fletcher, a Democrat. Representative Henry Cuellar, also a Democrat, is a cosponsor.

The U.S. Department of Energy, or DOE, last month ditched an original tender to buy 30 million barrels of oil for the Strategic Petroleum Reserve after Congress failed to include funding in a stimulus bill meant to help the economy deal with the impact of the coronavirus outbreak.

That move was a blow to Trump, who on March 13 had directed the DOE to fill the reserve, which can take another 77 million barrels of oil, “to the top.” Even if a purchase is authorized, analysts said it would not do much to push up the global oil price and help crude producers due to the severe demand destruction as the coronavirus cripples economies.

The DOE now plans to lease space in the SPR, a series of salt caverns on the Texas and Louisiana coasts, but the department said on Tuesday it continues to work with Congress on funding for the purchase of oil for the reserve.

(Reporting by Timothy Gardner; Editing by Chizu Nomiyama and Leslie Adler)