OREANDA-NEWS. A US House of Representatives panel voted unanimously today to direct the Department of Energy to sell 8mn bl/yr of oil from the US Strategic Petroleum Reserve (SPR) to help pay for a bill designed to spur medical innovations.

The House Energy and Commerce Committee voted 51-0 in favor of the 21st Century Cures Act to modernize health care and streamline processes to deliver faster cures.

To help offset the bill's estimated \$13bn pricetag, the legislation would order the energy secretary to draw down 8mn bl of crude each year from fiscal years 2018-2025 for a total of 64mn bl over the eight years.

Sales would have to stop if the amount of oil in the reserve dropped below what would be needed to cover 90 days worth of net imports of crude and petroleum products. That figure is calculated by using the previous calendar year's net crude and product imports. As part of its commitment to the IEA, the US promises to maintain at least 90 days of import protection in both government-owned and commercial stocks.

The SPR as of 15 May contained 691.3mn bl of crude, according to DOE data. DOE estimates the SPR provides about 137 days of import cover. The Energy Information Administration estimates the US' net imports of crude and products averaged 5.04mn b/d in 2014.

While the Congressional Budget Office has yet to tally up the cost of the bill, early estimates suggest the sale of the oil would provide about \$5.2bn. That money would be deposited in the US Treasury's general fund.

The bill comes as the US administration is trying to determine what the right size and configuration of the SPR should be in the wake of the shale revolution. "In spite of the changes in the US oil profile, the US economy will remain vulnerable to future international oil supply disruptions without the protection afforded by the SPR," the administration said in its Quadrennial Energy Review released on 21 April.

Sponsored by committee chairman Fred Upton (R-Michigan) and representative Diana DeGette (D-Colorado), the bipartisan measure is expected to win easy passage in the Republican-controlled House.

But in the Senate, Energy and Natural Resources Committee chairman Lisa Murkowski (R-Alaska) has voiced concerns about tapping the SPR in the absence of an actual supply emergency. She would support selling oil from the SPR in order to help maintain the reserve's facilities.

Congress has approved non-emergency sales of SPR oil in the past. In 1996, DOE sold 5.1mn bl of crude to pay for the decommissioning of the Weeks Island storage site, after the converted salt mine suffered a fracture.

And in 1996-97, DOE sold 23mn bl at Congress' direction to help reduce the federal budget deficit.

US energy research firm ClearView Energy Partners said that the contemplated sales of crude over an eight-year period likely would not meaningfully affect prices. "But we also would not rule out the prospect of further SPR sales."

DOE in March 2014 conducted a test sale of oil from the SPR to assess the reserve's drawdown and distribution capabilities, selling nearly 5mn bl of sour crude at an average price of \$93.75/bl. The test revealed potential problems with pipeline capacity, storage space and availability of US-flagged vessels if an emergency drawdown were required.

DOE announced plans in March to buy up to 5mn bl of sweet crude for the reserve's Bryan Mound storage site in Freeport, Texas.