§6240. Petroleum products for storage, transport, or exchange
(a) Eligibility of petroleum products
The Secretary is authorized, for purposes of implementing the Strategic Petroleum Reserve Plan or the Early Storage Reserve Plan, to place in storage, transport, or exchange-
(1) crude oil produced from Federal lands, including crude oil produced from the Naval Petroleum Reserves to the extent that such production is authorized by law;
(2) crude oil which the United States is entitled to receive in kind as royalties from production on Federal lands; and
(3) petroleum products acquired by purchase, exchange, or otherwise.
(b) Objectives in determining manner of acquisition
The Secretary shall, to the greatest extent practicable, acquire petroleum products for the Reserve, including the Early Storage Reserve and the Regional Petroleum Reserve in a manner consonant with the following objectives:
(1) minimization of the cost of the Reserve;
(2) orderly development of the Naval Petroleum Reserves to the extent authorized by law;
(3) minimization of the Nation's vulnerability to a severe energy supply interruption;
(4) minimization of the impact of such acquisition upon supply levels and market forces; and
(5) encouragement of competition in the petroleum industry.
(c) Fill operations by President
(1)(A) The President shall immediately undertake, and thereafter continue, petroleum products acquisition, transportation, and injection activities, to the extent funds are available pursuant to section 6247(b)(2) and (b)(3) of this title, at a level sufficient to assure that the petroleum products in the Strategic Petroleum Reserve will be increased at an average annual rate of at least the minimum required fill rate until the quantity of petroleum products stored within the Strategic Petroleum Reserve is at least 500,000,000 barrels.
(B) Subject to subparagraph (C), the minimum required fill rate shall be 300,000 barrels per day for purposes of subparagraph (A), unless there is in effect a finding by the President in his discretion for good cause that compliance with such rate would not be in the national interest. Any finding by the President under this subparagraph takes effect on the date such finding is transmitted to the Congress and ceases to have effect at the end of the fiscal year in which such finding was made. Any such finding transmitted to the Congress shall include a statement of the facts upon which the finding is based. Any such finding shall not be subject to judicial review.
(C) The minimum required fill rate shall be 220,000 barrels per day for purposes of subparagraph (A) during the period in which any finding by the President under subparagraph (B) is in effect.
(D)(i) If funds are available in any given fiscal year after fiscal year 1982 to achieve an average annual fill rate higher than the minimum required fill rate in effect under subparagraph (C), the minimum required fill rate shall be the highest practicable fill rate achievable, subject to the availability of appropriated funds.
(ii) The Impoundment Control Act of 1974 [2 U.S.C. 681 et seq.] shall apply to funds made available under section 6247(b) and (e) of this title.
(2) After the Strategic Petroleum Reserve reaches a level of 500,000,000 barrels, the President shall immediately seek to undertake, and thereafter continue, petroleum products acquisition, transportation, and injection activities at a level sufficient to assure that the petroleum products in the Strategic Petroleum Reserve will be increased at an average annual rate of at least 300,000 barrels per day until the quantity of petroleum products stored within the Strategic Petroleum Reserve is at least 750,000,000 barrels.
(3) Notwithstanding paragraph (2), beginning in fiscal year 1987 and continuing through fiscal year 1994 until the quantity of crude oil in storage within the Reserve is 1,000,000,000 barrels, the President shall carry out petroleum acquisition, transportation, and injection activities at the highest practicable fill rate achievable, subject to the availability of appropriated funds.
(d) Crude oil from Naval Petroleum Reserve Numbered 1; reduction in fill-rate requirements
(1) Notwithstanding any other provision of law, no portion of the United States share of crude oil in Naval Petroleum Reserve Numbered 1 (Elk Hills) may be sold or otherwise disposed of other than to the Strategic Petroleum Reserve (either directly or by exchange) during any fiscal year, except as provided in paragraph (2), unless-
(A) the quantity of crude oil in storage within Government owned facilities of the Strategic Petroleum Reserve is at least 750,000,000 barrels; or
(B) acquisition, transportation, and injection activities for the Reserve are being undertaken for that fiscal year at a level sufficient to assure that crude oil in storage in the Strategic Petroleum Reserve will be increased at an average rate of at least 75,000 barrels per day for that fiscal year and the Secretary has amended the Strategic Petroleum Reserve Plan as required by section 6239(j) of this title.
(2) The requirements of paragraph (1) shall not apply to the United States share of crude oil in the Naval Petroleum Reserve Numbered 1 which is-
(A) sold to small refiners under section 7430(d) of title 10;
(B) produced, consistent with sound engineering practices, for the purpose of preventing a reduction in the total quantity of crude oil available for ultimate recovery from the Naval Petroleum Reserve Numbered 1, and the amount produced is the minimum necessary to prevent such reduction; or
(C) produced for national defense purposes under section 7422(b)(2) of title 10, pursuant to an authorization of Congress under that section during the preceding 9-month period.
(3) In determining the number of barrels of crude oil for purposes of subparagraph (A) of paragraph (1), any crude oil drawndown from the Reserve as a result of any drawdown and distribution carried out under section 6241(g) of this title and not replaced under section 6241(g)(6)(B) of this title shall be considered to be within the Reserve.
(4) For any fiscal year in which purchases of petroleum products are suspended, or the sale of petroleum products is carried out, under subsection (f) of this section, the fill-rate requirements of paragraph (1)(B) shall be reduced by-
(A) the amount of petroleum products are 1 acquired for such fiscal year as a result of such suspension; plus
(B) the amount of petroleum products sold under such subsection during such fiscal year.
(e) Suspensions of fill operations, etc., during emergency situations; applicability, etc.
(1) The provisions of subsections (c) and (d) of this section shall not apply (A) if there is in effect an order of the President directing drawdown and distribution pursuant to section 6241 of this title or (B) if-
(i) the President has found in his discretion that compliance with such provisions significantly impairs the ability of the United States to respond to a severe energy supply interruption or to meet the obligations of the United States under the international energy program; and
(ii) the President has transmitted such finding to the Congress.
(2) The suspension of the application of subsections (c) and (d) of this section under paragraph (1)(B) may become effective on the day the finding is transmitted to the Congress and shall terminate nine months thereafter or on such earlier date as is specified in such finding.
(3) The period of any suspension of subsections (c) and (d) of this section under this subsection, and the quantity of any petroleum product involved, shall be disregarded in applying the provisions of such subsections for periods following such suspension.
(f) Predrawdown diversion
If the Secretary finds that a severe energy supply interruption may be imminent, the Secretary may suspend the acquisition of petroleum product for, and the injection of petroleum product into, the Reserve and may sell any petroleum product acquired for and in transit to, but not injected into, the Reserve.
(g) Test program of storage of refined petroleum products; report to Congress
(1) The Secretary shall conduct a test program of storage of refined petroleum products within the Reserve. The test program shall commence during fiscal year 1992 and continue through fiscal year 1994. The test program shall demonstrate mechanisms for storage of refined petroleum products within the Reserve which may be drawn down in accordance with this part.
(2) The mechanisms demonstrated under paragraph (1)-
(A) shall include the acquisition by lease or purchase, or both, of refined petroleum products for storage in the Reserve and shall include the acquisition by lease of storage facilities; and
(B) may include other mechanisms including, but not limited to, industrial petroleum reserves pursuant to section 6236 of this title and State set-aside programs, except that such mechanisms must provide equivalent control over the drawdown and distribution of such refined petroleum products as is provided under this part.
(3) Any refined petroleum products stored in the Reserve under this subsection shall be stored in locations to be determined by the Secretary, taking into account the proximity of existing distribution systems, the proximity of the area or areas of the United States most dependent on imported petroleum products or likely to experience shortages of refined petroleum products, and the capability for expeditious distribution to such area or areas.
(4) In the conduct of the test program under paragraph (1), the Secretary shall increase the quantity of refined petroleum products acquired for storage in the Reserve by an amount equal to 10 percent of the fill of the Reserve during each of the fiscal years 1992, 1993, and 1994, except that the Secretary may not expend more than 10 percent of the funds appropriated for the acquisition, transportation and injection of petroleum products into the Reserve during each of the fiscal years covered by the test program.
(5) In the conduct of the test program under paragraph (1), the Secretary may not construct or purchase facilities for the storage of refined petroleum products.
(6) Refined petroleum products stored in the Reserve under the test program may be withdrawn from the Reserve before the conclusion of the test program-
(A) as may be necessary to turn such products over because of changes in the physical characteristics of the product; or
(B) on the basis of a finding made under section 6241 of this title.
(7) No later than January 31, 1994, the Secretary shall transmit to the Congress a report on the test program. The report shall evaluate the mechanisms demonstrated under the test program, other potential mechanisms, and the purchase of facilities. The report shall include an assessment of the costs and benefits of the various mechanisms. The report shall also make recommendations with regard to future storage of refined petroleum products and contain drafts of any legislative provisions which the Secretary wishes to recommend.
(h) Purchase from stripper well properties
(1) If the President finds that declines in the production of oil from domestic resources pose a threat to national energy security, the President may direct the Secretary to acquire oil from domestic production of stripper well properties for storage in the Strategic Petroleum Reserve. Except as provided in paragraph (2), the Secretary may set such terms and conditions as he deems necessary for such acquisition.
(2) Crude oil purchased by the Secretary pursuant to this subsection shall be by competitive bid. The price paid by the Secretary-
(A) shall take into account the cost of production including costs of reservoir and well maintenance; and
(B) shall not exceed the price that would have been paid if the Secretary had acquired petroleum products of a similar quality on the open market under competitive bid procedures without regard to the source of the petroleum products.
(
References in Text
The Impoundment Control Act of 1974, referred to in subsec. (c)(1)(D)(ii), is title X of
Amendments
1992-Subsec. (d)(2).
Subsec. (h).
1990-Subsec. (c)(3).
Subsec. (d)(1)(A).
Subsec. (d)(1)(B).
Subsec. (d)(4).
Subsec. (f).
Subsec. (g).
1986-Subsec. (c)(3).
Subsec. (d)(1)(A).
Subsec. (d)(1)(B).
Subsec. (d)(1)(C).
1985-Subsec. (d)(1)(C).
Subsec. (d)(3).
Subsec. (e)(1)(B).
Subsec. (e)(2).
Subsec. (e)(3), (4).
1982-Subsec. (c).
Subsec. (e)(4).
1981-Subsec. (c).
1980-Subsec. (c).
Subsec. (d).
Subsec. (e).
1978-
Effective Date of 1982 Amendment
Section 4(a)(2) of
Effective Date of 1981 Amendment
Section 1038 of title X of
Effective Date of 1980 Amendment
Section 801(b) of
Section 802(b) of
Suspension of Test Program Requirements During Fiscal Year 1994
Study and Report on Oil Leasing and Other Arrangements To Fill SPR to One Billion Barrels
Exchange of Agricultural Products for Crude Oil To Be Delivered to Strategic Petroleum Reserve
Allocation to Strategic Petroleum Reserve of Lower Tier Crude Oil and Federal Royalty Oil; Procedures Applicable, Authorities, Etc.
Section 805 of
"(a)(1) In order to carry out the requirement of the amendment made by section 801 of this Act [amending this section and enacting provision set out as a note above] and to carry out the policies and objectives established in sections 151 and 160(b)(1) of the Energy Policy and Conservation Act (42 U.S.C. 6231 and 6240(b)(1)) the President shall, within 60 days after the date of the enactment of this Act [June 30, 1980], promulgate and make effective an amendment to the provisions of the regulation under section 4(a) of the Emergency Petroleum Allocation Act of 1973 [15 U.S.C. 753(a)] relating to entitlements, which has the same effect as allocating lower tier crude oil to the Government for storage in the Strategic Petroleum Reserve. Such amendment shall not apply with respect to crude oil purchased after September 30, 1981, for storage in such reserve.
"(2) The authority provided by this subsection shall be in addition to, and shall not be deemed to limit, any other authority available to the President under the Emergency Petroleum Allocation Act of 1973 [15 U.S.C. 751 et seq.] or any other law.
"(3) The President or his delegate may promulgate and make effective rules or orders to implement this subsection without regard to the requirements of section 501 of the Department of Energy Organization Act [42 U.S.C. 7191] or any other law or regulation specifying procedural requirements.
"(b) In addition to the requirement under subsection (a), the President may direct that-
"(1) all or any portion of Federal royalty oil be placed in storage in the Reserve,
"(2) all or any portion of Federal royalty oil be exchanged, directly or indirectly, for other crude oil for storage in the Reserve, or
"(3) all or any portion of the proceeds from the sales of Federal royalty oil be transferred to the account established under subsection (c) for use for the purchase of crude oil for the Reserve, as provided in subsection (c).
"(c)(1) Any proceeds-
"(A) from the sale of entitlements received by the Government under the amendment to the regulation made under subsection (a), and
"(B) to the extent provided in subsection (b), from the sale of Federal royalty oil,
shall be deposited in a special account which the Secretary of the Treasury shall establish on the books of the Treasury of the United States.
"(2)(A) Subject to the provisions of any Act enacted pursuant to section 660 of the Department of Energy Organization Act [42 U.S.C. 7270], such account shall be available (except as provided in subparagraph (B)) for use by the Secretary of Energy, without fiscal year limitation, for the purchase of crude oil for the Strategic Petroleum Reserve, to the extent provided in advance in appropriation Acts.
"(B) Amounts in such account attributable to the proceeds from the sale of entitlements under the amendment to the regulation under subsection (a) are hereby appropriated for fiscal year 1981 for acquisition of crude oil for the Strategic Petroleum Reserve pursuant to subsection (a).
"(d) For purposes of this section-
"(1) the terms 'entitlements', 'crude oil', and 'allocation' shall have the same meaning as those terms have as used in the Emergency Petroleum Allocation Act of 1973 [15 U.S.C. 751 et seq.] (and the regulation thereunder);
"(2) the term 'lower tier crude oil' means crude oil which is subject to the price ceiling established under section 212.73 of title 10, Code of Federal Regulations;
"(3) the term 'Federal royalty oil' means crude oil which the United States is entitled to receive in kind as royalties from production on Federal land (as such term is defined in section 3(10) of the Energy Policy and Conservation Act (42 U.S.C. 6202(10)); and
"(4) the term 'proceeds from the sale of Federal royalty oil' means that portion of the amounts deposited into the Treasury of the United States from the sale of Federal royalty oil which is not otherwise required to be disposed of (other than as miscellaneous receipts) pursuant to (A) the provisions of section 35 of the Act of February 25, 1920, as amended (
Rate of Fill of Strategic Petroleum Reserve
Ex. Ord. No. 12231. Strategic Petroleum Reserve
Ex. Ord. No. 12231, Aug. 4, 1980, 45 F.R. 52139, provided:
By the authority vested in me as President of the United States of America by Title VIII of the Energy Security Act (
1–101. The functions vested in the President by Section 160(c) of the Energy Policy and Conservation Act, as amended, are delegated to the Secretary of Energy (42 U.S.C. 6240(c); see Section 801 of the Energy Security Act).
1–102. The functions vested in the President by Section 7430(k) of Title 10 of the United States Code are delegated to the Secretary of Energy (see Section 804(b) of the Energy Security Act).
1–103. The functions vested in the President by Section 805(a) of the Energy Security Act [section 805(a) of
Jimmy Carter.
Section Referred to in Other Sections
This section is referred to in sections 6234, 6239, 6247, 6249a of this title.
1 So in original. The word "are" probably should not appear.