The U.S. could sell off its 1-million-barrel Northeast Gasoline Supply Reserve in the fiscal year of 2024, a funding bill up for discussion at U.S. Congress says.
Under the draft text of the bill, “the Secretary of Energy shall draw down and sell one million barrels of refined petroleum product from the Strategic Petroleum Reserve during fiscal year 2024.”
“Upon the completion of such sale, the Secretary shall carry out the closure of the Northeast Gasoline Supply Reserve,” says the bill.
Furthermore, one of the provisions is that “The Secretary of Energy may not establish any new regional petroleum product reserve unless funding for the proposed regional petroleum product reserve is explicitly requested in advance in an annual budget submitted by the President,…and approved by the Congress in an appropriations Act.”
The Department of Energy established in 2014 the Northeast Gasoline Supply Reserve (NGSR)—the first federal, regional, refined petroleum product reserve containing gasoline—following the 2012 Superstorm Sandy in the northeastern United States.
The NGSR holds one million barrels of gasoline, including 700,000 barrels located in the New York Harbor area, 200,000 barrels in the Boston area, and 100,000 barrels in South Portland, Maine.
The same bill about selling off the Northeast Gasoline Supply Reserve aims to prohibit Chinese entities from buying crude oil from the U.S. Strategic Petroleum Reserve in the latest push to limit Chinese access to U.S. markets.
The bill follows a sale of about 1 million barrels from the SPR to Unipec America, a U.S. subsidiary of state-owned major Sinopec. That was back in 2022 when the Biden Administration unleashed more than 180 million barrels of crude from the SPR to limit the spike in oil prices.
The House is yet to vote on the bill, which allocates funding for half of the federal segments that Congress is in charge of organizing funding for, Reuters reported, but with anti-Chinese sentiments pretty popular among both Democrats and Republicans, its chances appear pretty good.
By Tsvetana Paraskova for Oilprice.com
