NEWS RELEASE
Congress of the United States
U.S. House of Representatives

CONGRESSMEN BOUCHER AND DINGELL
INTRODUCE LEGISLATION TO ESTABLISH
STRATEGIC REFINERY RESERVE

Measure Would Enhance Refinery Capacity

WASHINGTON, DC – Congressman Rick Boucher (D-VA), Ranking Member on the Energy and Air Quality Subcommittee and John Dingell (D-MI), Ranking Member of the full Energy and Commerce Committee today introduced legislation to protect the nation’s refinery capacity by establishing a federal Strategic Refinery Reserve (SRR), which will deliver refined petroleum products to the market during energy supply emergencies.

"The legislation that Congressman Dingell and I have introduced builds upon the success of the Strategic Petroleum Reserve by taking the commonsense step of establishing a reserve which can produce refined petroleum products. The presence of such a reserve will ensure the availability of emergency refinery capacity – a need which has been clearly illustrated by the events of the last year," said Boucher.

"This is good legislation to address a vulnerability in our Strategic Petroleum Reserve system that was unveiled after last year’s hurricanes, but which has not yet been resolved," said Dingell. "We can help minimize future supply disruptions if we are better prepared for extreme circumstances."

Last year’s catastrophic hurricanes, which severely damaged oil refineries in the gulf coast illustrated the nation’s vulnerability to a disruption in supply of refined petroleum and exposed shortcomings in our current Strategic Petroleum Reserve (SPR) system. If the nation loses significant refinery capacity, crude released from the SPR cannot be converted easily into refined product such as gasoline or home heating oil. Our nation’s refineries are running at virtually full capacity meaning that any reduction in our ability to refine product results in an almost immediate increase in gasoline prices.

The legislation authored by Congressmen Boucher and Dingell would help address this vulnerability by requiring the Secretary of Energy to establish and operate a Strategic Refinery Reserve with capacity equal to 5 percent of the total United States demand for gasoline, home heating oil and other refined petroleum products. The Secretary may design and construct new facilities or acquire and re-open previously closed facilities.

During non-emergency times the SRR could provide refined product to the federal fleet, including the Department of Defense. Running the refinery reserve full time can ensure that federal fleet and military needs are met; lessens start up time for SRR refineries reach full production capacity during emergencies by preventing the need for a cold start; and lessens the demand for refined product in the consumer market by freeing additional supply.

During times of emergency, the SRR production would be increased and the resulting refined products could be used by the consumer market. Under the legislation, the Secretary is authorized to use SRR production for commercial use based on two criteria: the same severe supply disruption criteria used to trigger a drawdown of SPR and upon a Presidential determination of a regional supply shortage.

"By establishing a Strategic Refinery Reserve we can limit the effect that disruptions in supply will have on American’s during energy emergencies. I look forward to working with my colleagues on the Energy and Commerce Committee and in the full. House of Representatives to pass this vital measure," Boucher concluded.

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Read a summary and the text of the Legislation