Cruz and Manchin Join Forces to Stop Sale of Oil From Strategic Stockpile

U.S. Capitol dome seen from Russel Senate office in Washington, on July 5, 2023. (Madalina Vasiliu/The Epoch Times)

The U.S. Senate passed an amendment to the annual defense bill on Thursday that would ban oil exports to China from the nation’s Strategic Petroleum Reserve (SPR), which sits half empty after President Joe Biden ordered a drawdown to reduce soaring inflation.

The amendment, spearheaded by Sens. Ted Cruz (R-Texas) Joe Manchin (D-W.V.) passed the upper chamber in a vote of 85-12 on July 20.

The SPR, which was filled to its then 727 million barrel storage capacity a little over a decade ago, has been depleted to a multi-decade low of 336 million barrels, the latest federal data shows.

Reduced levels of the strategic stockpile have been the subject of controversy, as Republicans accused Mr. Biden of drawing it down irresponsibly and depriving the nation of an important energy buffer in case of emergencies.

While the Biden administration has pledged to refill the reserve, it’s a process that Energy Secretary Jennifer Granholm has said could take years as a quick buyback program could lead to price spikes and revive inflationary pressures at a time when they remain uncomfortably high.

In bipartisan fashion, the Senate has moved to shield the strategic stockpile from further drawdowns that would benefit America’s adversaries, which have been building up their reserves.

To this end, the Senate on July 20 passed an amendment (pdf) to the National Defense Authorization Act (NDAA) to ban sales of oil from the strategic reserve to China, North Korea, Iran, and Russia.

Sen. Ted Cruz (R-Texas) speaks on Title 42 immigration policy in Washington on May 3, 2023. (Kevin Dietsch/Getty Images)

SPR Oil Goes to China

Last July, in a sale of 39 million barrels from the strategic stockpile that was part of the Biden-ordered total drawdown of around 180 million barrels, around 1 million barrels went to UNIPEC America, a Houston-based arm of China’s Sinopec. remove

“We know China has been amassing the largest stockpile of crude in the world. Nevertheless, last year, the United States sold off part of our reserves to China,” Mr. Cruz said in a statement. “I have been working with Senator Manchin to prohibit such inexplicably reckless moves in a bipartisan way.”

“We should not be selling our emergency oil reserves to our adversaries,” Cruz added.

Mr. Manchin, who on a number of occasions has criticized the Biden administration’s energy policies, took a similarly dim view of the United States depleting its petroleum stockpile.

While the United States ramped up production and exports to help meet global demand as some crude supply went offline in the wake of Russia’s invasion of Ukraine, some other countries have taken a different approach to the energy crunch.

“China, on the other hand, stockpiled oil and held back refinery production, and while China was stockpiling, one of its state-owned companies purchased over 1.4 million barrels from the United States of America, the people of our great country, from our own stock of reserves,” Mr. Manchin said in a statement. “That’s what we’re trying to stop.”

Sen. Joe Manchin (D-W.Va.), Senate Energy and Natural Resources Committee chair, presides over a hearing on battery technology in Washington on Sept. 22, 2022. (Kevin Dietsch/Getty Images)

Some senators were against the measure. Sen. Chris Murphy (D-Conn.), who opposed the ban, said it “creates the illusion of solving a problem while having very little political impact and likely doing more harm than good.”

Some analysts suggested the move was more symbolic than pragmatic.

Benjamin Salisbury, an analyst at Height Capital Markets, said it was unlikely that a ban would have “any systemic impact on the functioning of the SPR, which is done through a competitive bid in a relatively liquid market.”

Before the amendment can become law as part of the defense bill, the House and Senate need to go to conference to hammer out a final version of the measure, which has to clear both chambers and be signed by Mr. Biden to enter into force.

On July 18, the Senate voted to begin consideration of the defense bill, bringing it a step closer to final passage.

U.S. Capitol dome seen from Russel Senate office in Washington on July 5, 2023. (Madalina Vasiliu/The Epoch Times)

Senate Begins Consideration of Defense Bill

Senators voted 72 to 25 to invoke cloture on the motion to proceed to its version of the bill, which sets forth policies for Department of Defense (DOD) programs and activities, as well as military construction, and the Department of Energy’s (DOE) national security programs.

While the bill authorizes appropriations, it does not provide budget authority.

The $886 billion defense package authorizes $844.3 billion for the DOD and $32.4 billion for national security programs within the DOE.

It also includes a 5.2 percent pay raise for both military servicemembers and the DOD civilian workforce, according to a summary (pdf) from the Senate Armed Services Committee, and extends the Ukraine Security Assistance Initiative (USAI) through fiscal year 2027.

Other notable provisions in the bill are increased funding for a number of initiatives to respond to evolving threats, including research on foreign malign influence operations and a “comprehensive training, advising, and institutional capacity-building program for the military forces of Taiwan,” amid increasingly aggressive actions from China.

In addition, the bill would extend the DOD’s authority to “provide training for Eastern European national military forces in the course of multilateral exercises” and modifies the authority to “include the Republic of Kosovo among the list of countries eligible to receive training” amid rising tensions in the Balkans.

Katabella Roberts contributed to this report.