Members of Oklahoma's Congressional delegation are demanding answers from the Biden administration regarding what they describe as the "mismanagement of the U.S. Strategic Petroleum Reserve." and more specifically, "reports that millions of barrels from America’s stockpile are being exported to China.”
Rep. Markwayne Mullin (R-OK2) joined fellow GOP House Energy and Commerce Committee member Rep. Fred Upton (R-MI) last week in sending a letter to Committee Chairman Rep. Frank Pallone (D-NJ) requesting a hearing on "why the Administration continues to release oil from the SPR and allows China to purchase crude to build up its own strategic stocks."
Department of Energy records show that Unipec, the Houston-based trading arm of China's state-run petrochemical conglomerate, has successfully bid on and been awarded 950,000 barrels of crude from the SPR twice since the special release was authorized, once in April and again in June.
Approximately 90 million barrels have been released so far under President Biden's March 31 order, which was part of his strategy to stabilize energy prices following Russia's invasion of Ukraine.
"Release, release, release, release," said Rep. Mullin in an interview last week, "and we are at—we’re not at record lows, but we’re pretty close."
The reserve is down from about 630 million barrels when Biden took office to about 475 million barrels, the lowest level since 1985. Capacity is about 715 million barrels.
The vast majority of the crude oil released to date has gone to U.S. refiners, but several million barrels have gone to Europe, and nearly two million to Unipec.
"I have a huge issue with that," Mullin said.
Congressman Mullin and others in the delegation said, it's bad enough that President Biden shuns domestic production while courting OPEC leaders, but they don't understand allowing any of the nation's crude oil reserve to go to an adversary such as China.
"Who in this administration made that decision?" asked Mullin. "They should answer for it, and that’s why we sent the letter."
Many in the industry, however, are not troubled that some of the reserve has gone overseas, and even to China.
“U.S. energy exports provide critical stability to the world market, strengthen American energy leadership and support our allies – including those in Europe – that depend on the U.S. to meet their energy needs," said Frank Macchiarola, the American Petroleum Institute's Senior Vice President of Policy, Economics and Regulatory Affairs. "American refiners are running at full throttle and don’t have the capacity to fully absorb the additional supply from the SPR drawdown. Offering this excess supply to the global market helps ensure refiners around the world have the resources they need to maximize throughput and put downward pressure prices – benefiting consumers here at home and around the world.”
Gas prices have steadily dropped since mid-June, when the national average topped $5.00 per gallon for the first time ever. AAA reported the national average Monday was $4.35.
Staff with the House Energy & Commerce Committee has not yet responded to a request for the status of Rep. Mullin's hearing inquiry.