The bill prohibits the US energy secretary from selling petroleum products from the reserve “to any entity that is under the ownership, control, or influence of the Chinese Communist Party” or from exporting any such products to China.
US congresswoman Cathy McMorris Rodgers, Republican of Washington and chair of the House Energy and Commerce Committee, has been a vocal critic of the Biden administration’s energy policy. Photo: AP
Biden’s move last year to release 180 million barrels in emergency sales from the nation’s oil reserve after global gas prices spiked following Russia’s invasion of Ukraine sent US inventories to their lowest levels since 1984.
Of the released petroleum, some 950,000 barrels were awarded to Unipec, a subsidiary of Beijing-based oil and gas company Sinopec, according to the US Department of Energy.
Republicans have argued that the move weakened Washington’s ability to respond to emergencies and national security events and that their bill helps strengthen US energy security.
Ahead of Thursday’s vote, Republican congresswoman Cathy McMorris Rodgers of Washington, the newly named chair of the House Energy and Commerce Committee, blasted the administration for “actively bolstering the oil reserves of our most dangerous geopolitical adversary, the Chinese Communist Party”.
But some observers argue the bill would achieve little were it to become law.
Sarah Emerson, president of petroleum consulting practice Esai Energy, said she did “not see this as a significant element of national or energy security”, noting the released amount could only be sold to foreign entities operating in the US.
“Much of the [US Strategic Petroleum Reserve] is connected to a domestic pipeline distribution system. While one can certainly export SPR crude, it is well-suited for delivery to domestic refineries,” Emerson said.
“So, even if some SPR crude made it to a Chinese subsidiary operating in the US, it still might not be exported to China or would be a small volume of the entire drawdown.”
House Democrats decried the bill as a messaging tool that accomplishes little of substance. Democratic congressman Frank Pallone of New Jersey, ranking member of the House Energy and Commerce Committee, said barrels from the reserve sold to Chinese firms “represented only 2 per cent of all the oil we sent to China last year”.
Data from the US Energy Information Administration revealed that even if all 950,000 barrels awarded to Unipec went to China, they would represent less than 4 per cent of the oil exported to China in the previous financial year.
Democrats also criticised the legislation as being too restrictive, pointing out that they had introduced a more expansive and bipartisan bill on Wednesday to block sales from the reserve to “foreign adversaries” including Russia, North Korea and Iran. That was similar to legislation Senate Republicans introduced during the previous Congress.
In 2015, the Republican-controlled Congress repealed a 40-year ban on exporting US crude oil. The US president can authorise emergency sales, but a fixed amount is often congressionally mandated to be released from the Strategic Petroleum Reserve.
The Biden administration contended the releases lowered gas prices and had repeatedly asked countries including China to do the same to stabilise international oil prices.
Though Republicans were especially angered by the role of Chinese firms in the most recent releases, Chinese companies routinely contracted with the US Department of Energy during the Donald Trump administration.
In this second week of the new Congress, Republicans have also introduced legislation to hold China accountable for its role in the coronavirus pandemic, including a bill to sanction Chinese Communist Party members and heads of Chinese health agencies. Another bill seeks reimbursement from Beijing totalling US$16 trillion dollars.
The House Republican leadership further aims to advance a bill that would require the Biden administration to draw up a plan to increase oil and gas production on federal lands along with any nonemergency drawdown from the reserve.
