Lawmakers have the opportunity for a bipartisan win as Congress debates legislation to prevent future releases of the nation’s emergency oil reserves from landing in the hands of Chinese companies.
Legislation to bar such oil sales from the Strategic Petroleum Reserve (SPR) to the foreign adversary sailed through the GOP-led House last week with broad bipartisan support, including 113 House Democrats. The proposal is driven by national security concerns.
Senate Democrats say they’re open to the idea as they weigh potential changes to the measure, which comes in the wake of some stockpile releases going to firms in China last year as part of a 180-million-barrel sell-off by President Biden to blunt high prices at the pump.
Sales from the SPR are mandated to be awarded to the highest bidder under current federal law, which means the U.S. commodity can be either sold directly to Chinese companies or indirectly to domestic or international firms which then export it to Beijing.
“I certainly wouldn’t want sales of that to benefit China,” said Sen. Michael Bennet, Colorado Democrat.
Senate Majority Whip Richard J. Durbin, Illinois Democrat, did not rule out the Republican-led endeavor.
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“I want to take a close look and see the impact of the depletion of the Strategic Petroleum Reserve by the president in an effort to bring down gasoline prices… before I make any judgment on how to allocate that reserve,” he said.
Senate Energy Committee Chairman Joe Manchin III is also eyeing the legislation and said a broader evaluation of the SPR is needed, as Republicans cry foul for Mr. Biden draining the stockpile to its lowest levels since 1983.
“We’re looking at that. I feel the same way. It’s time for us to stop pulling out of the SPR. We’ve got to make some kind of effort to start filling that back up and make sure that we do it as quickly as we can,” the West Virginia Democrat said. “With China — the way it’s sold on the open market right now — they bid, whoever the high bid is gets it. Unless we want to [change it so] that they shouldn’t be able to access this whatsoever.”
At least 1 million barrels from the SPR last year went to China by way of Unipec America, an arm of Chinese oil and gas firm Sinopec, the Energy Department has said. Reuters reported that five million barrels at another point went to China and other countries, though it was unclear how much went to China.
The amounts may pale in comparison to the more than 250 million barrels that the nonpartisan Congressional Research Service says Mr. Biden has released since October 2021. But lawmakers argue allowing a foreign adversary to receive any of the nation’s emergency supply is bad national security policy.
Separate from the SPR, private U.S. energy companies export an average of roughly 3 million barrels of oil per day to China, according to the U.S. Energy Information Administration (EIA).
“America’s Strategic Petroleum Reserve is meant for true energy supply disruptions like those caused by hurricanes and natural disasters — not to help China,” House Energy and Commerce Committee Chairwoman Cathy McMorris Rodgers, Washington Republican who spearheaded the legislation, said during debate on its passage. “Draining our strategic reserves for political purposes and selling portions to China is a significant threat to our national security.”