It would be an unfortunate mistake for the United States to slacken its commitment to filling the Strategic Petroleum Reserve (SPR). Sharp differences between Congress and the White House about how much money should be spent on the reserve at a time of soaring budget deficits threaten to curtail the rate at which the immense underground caverns are filled - and the final size of the reserve. Yet, given the disruptions in world oil deliveries back in the 1970s, it seems only prudent that the US reserve be filled as close to schedule as possible.
The strategic reserve was created by Congress to enable the US to avoid the possibility of future disruptions in oil supplies. The goal: fill massive salt domes along the Texas and Louisiana coast with a stockpile of some 750 million barrels of crude oil.
The stockpile now includes over 330 million barrels of crude, equal to three months of imports. To reach 750 million barrels will cost another $18 billion and take up to seven years.
The administration proposes that the current fill rate of over 200,000 barrels a day be slashed to 145,000 barrels a day for fiscal year 1984. Doing so could save taxpayers over $1 billion.
The Senate and House, however, have passed bills (now in conference), that would hold the fill rate at 220,000 barrels a day.
Some old-fashioned political horse trading is in order. Both sides have a case. The White House would slow the fill, in part, because much of the oil to be purchased during the next year will have to be stored outside the reserve until additional construction work is undertaken. Lawmakers, however, note that world oil prices are relatively low, although prices have been inching upward in some markets.
What should be avoided is an impasse over the fill rate that triggers a White House veto. In that case, the nation would be the loser. So lawmakers might consider scaling back the fill rate to accommodate the White House. The administration, for its part, should also provide reassurances that it will complete the reserve. In the past, the administration's long-term support for the reserve has not always been firm. Many officials within the administration contend that free-market forces would be adequate to provide for any future energy needs.
The overall supply picture looks good at this time. Petroleum supplies in the private sector remain ample. Shale oil can be produced in huge quantities.
But the reserve was designed to take care of abrupt unexpected future contingencies. What if imports were again cut off - or reduced? Although domestic reserves are there, they cannot be produced overnight.
The US should go ahead, as planned, and fill the Strategic Petroleum Reserve. The time to fill the reserve is when prices are relatively low - and when there is no world oil crisis.