The White House plan to trim the national debt includes selling off half of the nation’s emergency oil stockpile, part of a broad series of changes proposed by President Donald Trump for the federal government’s role in energy markets.
Bloomberg reports Trump’s first complete budget proposal, released in part on Monday, would raise $500 million in fiscal year 2018 by draining the Strategic Petroleum Reserve, and as much $16.6 billion in oil sales over the next decade.
The Strategic Petroleum Reserve currently holds 687.7 million barrels of oil in salt caverns and tanks at designated locations in Texas and Louisiana. That allows for quick distribution when natural disasters or unplanned accidents occur, the Energy Department says.
Trump’s proposal also seeks to boost government revenues by selling off electricity transmission lines in the West, allowing oil drilling in the Alaska National Wildlife Refuge, and ending the practice of sharing oil royalties with states along the Gulf of Mexico.
The budget request revives an Obama-era proposal to cut the payments Gulf Coast states collect from offshore drilling near their coastlines, a change that would translate to an extra $3.56 billion in federal revenue over the next decade.
Under a 2006 law, four Gulf states—Alabama, Louisiana, Mississippi and Texas—now claim 37.5% of the royalties that oil and gas companies send the federal government in exchange for drilling rights and production on some Gulf of Mexico leases.
