US House approves medical bill that sells SPR crude

The US House of Representatives voted yesterday to fund new medical research and other health programs in part by selling 25mn bl of crude from the US Strategic Petroleum Reserve (SPR).

The House voted392-26 to approve the 21st Century Cures Act, which would fund medical research, expedite the federal approval process for drugs and provide funding to combat opioid addiction. The US Senate plans to vote on the bill later this month, after which it would head to the White House for President Barack Obama's signature.

The White House has said it strongly supports the bill but chastised lawmakers for once again deciding to sell off crude from the 695.1mn bl reserve to pay for new spending programs. Congress last year committed to sell 124mn bl of crude by 2025 to help pay for highway spending and a budget deal. The bill today "continues a bad precedent of selling off longer term energy security assets to satisfy near-term budget scoring needs," the White House said.

Congress last year approved a bill that commits to selling off up to $2bn worth of SPR crude to pay for modernization of the 40-year-old emergency crude stockpile, which is made up of salt caverns along the US Gulf coast.

US consultancy Clearview Energy Partners expects Congress will sell $375mn worth of crude as part of that modernization program, through a continuing resolution to fund the government. At $45/bl, that sale would be equivalent to 8.3mn bl.