Final Energy Security and Infrastructure Modernization Sale (2020 Presidential transition)
This page is part of the 2020 Transition Book. |
| Book 2 - Issue Papers
|
|---|
| Entire 2020 DOE Transition book As of October 2020 |
Congress established the Energy Security and Infrastructure Modernization (ESIM) Fund to support modernization of the Strategic Petroleum Reserve (SPR). The Bipartisan Budget Act of 2015, Section 404(e), as amended by Section 14002 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, authorized appropriations (and drawdowns and sales under subsection (c) in an equal amount) for carrying out subsection (d)(2)(B), $2 billion for the period encompassing fiscal years 2017 through 2022.
The Department responded by creating the Life Extension 2 (LE2) project to modernize the SPR. Congress subsequently approved selling ~$1.4 billion of SPR crude oil to fund the LE2. To date, three crude oil sales (2017, 2018, and 2019) have been conducted, raising $971 million for deposit into the ESIM Fund. A final $450 million sale will bring the ESIM Fund balance to $1.4 billion.
Issues
The Office of Petroleum Reserves (OPR) must raise the final $450 million for the ESIM Fund by FY 2022 and commence the LE2 project.
Status
In February 2020, OPR announced the final Congressionally-mandated sale of crude oil to fund the LE2 project. However, in March 2020, due to the COVID-19-driven collapse of crude oil prices, the sale was postponed. Section 14002 of the CARES Act extended the time for DOE to hold the sale to FY 2022.
Major Decisions
The Department is authorized to conduct the final ESIM sale by the end of FY22 under the CARES Act. Important decisions on the timing of the sale will need to be made. The posting of a Notice of Sale will be required 1 month prior to making any awards.
See also
References
↑DOE. (2021). Transitions 2020: Issue Papers. US Department of Energy.