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Tuesday, 02 December, 2008, 23:10 GMT | more >>

US to spend $584m to replace reserves



By Upstream staff 

US Energy Secretary Sam Bodman said the government plans to spend about $584 million to help replace some of the 11 million barrels of crude from reserves sold in 2005 after Hurricane Katrina and, therefore, will not delay its plan to buy oil for the Strategic Petroleum Reserve even if crude prices stay above $100 a barrel.

The price of US oil reached a record of $117 a barrel today

Bodman told reporters he was against a proposal from the Republican presidential nominee Senator John McCain to stop adding crude to the reserve with prices so high and also to suspend for the summer the federal excise tax of 18.4 cents levied on each gallon of gasoline sold.

"I don't think it's a good idea," Bodman said of McCain's call to suspend the gasoline tax.

He said revenue is needed to help build and repair US highways and bridges.

As for McCain's idea to delay putting more crude into the US emergency oil stockpile, Bodman said: "That is not something I'm in favor of," reported Reuters.

Bodman said the United States needs to build its emergency oil stockpile so it can replace 90 days of crude imports if necessary, and now the reserve only holds about a 55-day supply.

The Energy Department will study the impact to the market and consumers of buying oil for the reserve before it would solicit bids to energy companies.

They would then review the bids and would see if buying oil would be a good deal for taxpayers.


Friday, 18 April, 2008, 19:25 GMT  | last updated: Monday, 21 April, 2008, 06:39 GMT

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