USA to drain oil reserve, drill in Arctic

A draft budget proposal expected to be filed in Congress later on Tuesday includes selling half of the US strategic oil reserve and opening the Arctic to oil companies, international media reported.

It is unclear how the Donald Trump administration, which hopes to make some USD 16.6 billion by 2027 and USD 500 million in the next fiscal year by draining the 688-million-barrel reserve, would comply with regulations stipulating that it must contain at least 450 million barrels of crude. Measures adopted by the previous government already foresee the reserve’s reduction by 27% by 2025, Bloomberg reported.

The draft also calls for collecting USD 1.8 billion in the next 10 years by allowing oil companies to explore the Arctic National Wildlife Refuge, a prospect bitterly opposed by environmentalists and considered risky in a relatively low-price environment by many companies wary of the costs of operating there.

A further industry-related proposal would cut the royalties that Texas, Louisiana, Alabama and Mississippi receive from operations in the Gulf of Mexico, increasing the federal government’s income by USD 3.56 billion.