U.S. to Boost ‘Rainy Day’ Oil Reserves

The federal government said it will add to its petroleum reserves--maintained to provide protection against oil shortages--in a move to improve the country’s energy security. Energy Secretary Bill Richardson unveiled a plan to add 28 million barrels to the Strategic Petroleum Reserve, replenishing oil that was sold off by the government in recent years to raise revenue for federal spending elsewhere. The move makes economic sense at a time when oil prices are at historic lows, Richardson said at a news conference. While the oil now in the reserve cost an average $27 a barrel, new oil could be added for less than $12 a barrel. “The American taxpayer wins because oil prices are low and we store for a rainy day,” Richardson said. The reserve, conceived as a billion-barrel cushion to protect against supply disruptions such as the 1970s Arab oil embargo, now stands at 563 million barrels--enough to replace 62 days’ worth of imports. The move was well received within the energy industry and on Capitol Hill, where members of Congress from oil states have been prodding the administration to help domestic producers reeling from depressed crude oil prices. Some lawmakers are pressing the administration to completely fill the reserve. The administration proposal doesn’t require congressional approval.