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SPR bill moves to White House; override of potential veto likely
WASHINGTON
Petroleumworld.com, May 16, 2008
US President George Bush Thursday will get the bill passed by Congress
conditionally mandating the suspension through the end of the year the program
to fill the Strategic Petroleum Reserve.The measure, which was approved by the Senate late Wednesday, calls for a
halt in the fill of SPR unless crude oil prices fall below an average of
$75/barrel for three successive months.Bush strongly opposes suspending the fill of the oil stockpile, but has
not said whether he will veto it despite its near-unanimous support from
Congress.Even if Bush does not sign the bill, congressional leaders should find it
easy to muster the two-thirds majority needed to override the veto. The final
bill passed unanimously in the Senate Wednesday night, after the House
approved it 385-25 on Tuesday.Democrats and Republicans in Congress have argued that suspending the
fill of SPR would have a small but real downward impact on gasoline prices.The federal government funnels 70,000 b/d into holding tanks located in
Gulf Coast states as a security measure in case of a supply emergency.Oil from the reserve was last used in 2005, after hurricanes in the USG
region disrupted oil deliveries.Regardless of the fate of the current legislation, SPR is nearing its
existing capacity. The stockpile is currently at about 703 million barrels out
of a total existing capacity of 727 million barrels, according to the
Department of Energy. The Bush administration plans to add another 13 million
barrels to the SPR through its royalty-in-kind program. If the government
decides to proceed with that purchase, it would bring SPR to its existing
capacity by the time the administration leaves office in January 2009.The Energy Policy Act of 2005 authorized the Department of Energy to fill
the SPR to an expanded capacity of 1 billion barrels.Meanwhile, June crude futures on NYMEX late Thursday morning were up
$1.66 at $125.88/b, following Wednesday's all-time high of $126.98/b. The
June RBOB gasoline contract was trading up 3.21 cents at $3.2125/gal, down
slights from the record $3.2370/gal reached earlier in the trading session.
Story by Jean Chemnick from Platts
- jean_chemnick@platts.com
Platts 15 05 08
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