White House threatens veto on bill to sell govt oil

REUTERS
Reuters North American News Service

Jul 24, 2008 13:55 EDT

WASHINGTON (Reuters) - The White House Thursday threatened to veto legislation that would require the government to sell 10 percent of the oil in the nation's emergency petroleum stockpile.

The House was expected to vote on the bill later Thursday. Democrats hope the legislation will lower oil prices by putting on the market more of the Strategic Petroleum Reserve's light, sweet crude that is sought by refiners.

"Drawing down our emergency oil reserve in the absence of a severe energy disruption is counter to the purpose of the SPR, and offers the nation a quick fix instead of much needed long-term, responsible energy solutions," the White House said in a statement.

The bill would require the government to sell 10 percent of the emergency stockpile's oil, or 70 million barrels, in the open market. About 40 percent of the stockpile's oil is light sweet crude.

The White House said selling the reserve's light sweet crude and replacing it with heavy crude would "severely degrade" the ability of the stockpile to respond to an energy crisis, such as a disruption in petroleum supplies caused by a hurricane.

"It is essential to maintain our existing reserve of light sweet crude, for which there will be the highest demand in an emergency, because it can be refined by all refineries, from the simplest to most complex," the White House said. (Reporting by Tabassum Zakaria; editing by Jim Marshall)

Source: Reuters North American News Service