WASHINGTON -- Earlier this month, U.S. Representative Larry Kissell (D-N.C.; pictured) introduced the National Strategic Gasoline Reserve for Purposes of National Security Act of 2011 (H.R. 142), legislation to establish a system of three to five strategic gasoline reserves that would hold 10 million barrels of regular unleaded gasoline, reported the Petroleum Marketers Association of America in its most recent PMAA News From Capitol Hill.
The U.S. Secretary of Energy would have the discretion to determine the location of the sites. This bill is similar to the "[image-nocss] Strategic Petroleum Reserve Modernization Act of 2009," legislation introduced by Senator Jeff Bingaman (D-N.M.) that would have established a 30 million barrel strategic motor fuels reserve as part of a national energy policy.
Under H.R. 142, at the request of a state governor, the Energy Secretary would sell gasoline from the reserves if there is "sufficient evidence that the sale or supply of gasoline in the region has been severely disrupted caused in significant part by an interruption in the normal distribution or availability of gasoline which dramatically affects the price of gasoline; and...provides sufficient evidence that the state would experience further adverse effects without the sale of gasoline from the gasoline reserve."
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"PMAA had many reservations to the refined petroleum product reserve proposal and worked closely with the staff of the Senate Energy & Natural Resources Committee regarding our concerns," the group said. "PMAA's concerns include long-term product storage issues, winter and summer gasoline inventory concerns, boutique fuel issues, supply and storage issues with ethanol and biomass-based diesel, futures market hedging costs and distribution pipeline inefficiencies."
The group added that it "will communicate our concerns with H.R. 142 to Congressman Kissell's staff."
The refined product reserve has been considered by Congress in previous years, said the report, but the proposals have always been dropped due to adequate inventory and refining capacity. The California Energy Commission and the National Petroleum Council have studied the refined-petroleum product reserve proposal several times and each time rejected it.
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