Republican-Led House Votes To Ban Oil Reserve Sales To China

The Republican-led House passed on Thursday legislation banning the United States from selling and exporting crude oil from the Strategic Petroleum Reserve (SPR) to China.

More than 100 Democrats joined their GOP counterparts, who raised concerns last year about the Biden administration selling nearly a million barrels from the reserve to a Chinese state-controlled crude giant.

The final tally for the “Protecting America’s Strategic Petroleum Reserve from China Act” was 331-97. Six members did not vote, according to the House clerk. Energy and Commerce Committee Chairwoman Cathy McMorris Rodgers (R-WA), who introduced the bill, called it “one of the most bipartisan votes on an energy bill in many years and multiple congresses.”

Despite receiving support from both sides of the aisle, the bill is not expected to be taken up by the Senate under the leadership of the Democrats, according to ABC News. Still, the vote Thursday was one of two bipartisan acts focused on Beijing during this fledgling session of Congress under the leadership of Speaker Kevin McCarthy (R-CA), following a vote Tuesday in which nearly 150 Democrats joined Republicans to establish the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party.

Under the legislation passed Thursday, the energy secretary, “[n]otwithstanding any other provision of law,” is prohibited from drawing down or selling petroleum products from the Strategic Petroleum Reserve “to any entity that is under the ownership, control, or influence of” China’s Communist Party “except on the condition that such petroleum products will not be exported to the People’s Republic of China.”

According to the Energy Department website, the SPR is “the world’s largest supply of emergency crude oil … established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program.”

As part of a 180-million-barrell drawdown through which the government sought to stabilize global oil markets and combat rising gasoline prices, the Biden administration announced in July 2022 a number of contracts for the purchase of crude oil from the Strategic Petroleum Reserve. Among those contracts to 14 companies was one for about 950,000 barrels awarded to Unipec America, a subsidiary of Communist Party-owned Sinopec Corp.

The Energy Department said these sales were meant to “address the significant global supply disruption caused by [Russian President Vladimir] Putin’s war on Ukraine, act as a bridge for domestic production to increase, and help stabilize volatile energy costs for American families.” But in a letter sent a letter to Energy Secretary Jennifer Granholm, House Republicans raised concerns about U.S. oil possibly being used by China to support Russia’s invasion of Ukraine and warned of the potential for Hunter Biden, the president’s adult son, receiving money from the deal because of the financial links between his private equity firm and the Chinese energy sector.

The Energy Department announced in December 2022 an effort to repurchase crude oil for the SPR, but Republicans remained distressed by Biden’s strategy.

“To cover up his failed policies driving our energy and inflation crisis, President Biden is draining our nation’s Strategic Petroleum Reserves at an alarming rate,” McMorris Rodgers said in her statement Thursday. “America’s SPR — once the world’s largest stockpile — have been depleted to the lowest levels since 1983. To date, President Biden has released more from the SPR than all U.S. presidents in history combined. Millions of barrels of that oil have gone to China, which now has the world’s largest government-controlled stockpile of oil. Draining our strategic reserves for political purposes and selling it to China is a significant threat to our national and energy security.”

Rep. Frank Pallone (D-NJ), the top Democrat on the Energy and Commerce Committee, voted against the bill. “If Republicans were serious about addressing the issue they would have brought forward a bill that banned all exports of oil — crude oil to China,” Pallone said on the House floor Thursday. He added: “If we truly want to address China using American oil to build its reserves, let’s actually take a serious look at that, rather than skirt around the issue because Republicans are scared of Big Oil’s wrath.”

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