Bill Overview
Title: Buy Low and Sell High Act
Description: This bill revises requirements concerning the Strategic Petroleum Reserve (SPR), establishes an Economic Petroleum Reserve, creates a national network of Strategic Refined Petroleum Product Reserves, increases the size of the Northeast Home Heating Oil Reserve, limits the sale and exportation of petroleum products, and sets forth provisions to reduce the demand for petroleum fuel and increase fuel supply. Specifically, the bill directs the Department of Energy (DOE) to establish within the SPR an Economic Petroleum Reserve of up to 350 million barrels of crude oil. DOE may acquire crude oil from domestic producers at low prices and then sell the oil when the prices are high as specified by the bill. DOE must also establish a national network of Strategic Refined Petroleum Product Reserves to store up to 250 million barrels of gasoline and diesel fuel, which may be sold when there is a severe fuel supply interruption within the district in which the reserve is located. In addition, the bill increases the cap on the amount of barrels of petroleum distillate that may be stored in the Northeast Home Heating Oil Reserve from two million to four million. It also establishes limits on the sale and exportation of petroleum products from such reserves. For example, the bill prohibits the sale or export of fuel from the reserves to (1) China, North Korea, Russia, or Iran; (2) any other country under U.S. sanctions; or (3) any entity owned, controlled, or influenced by one of those countries or the Chinese Communist Party. However, DOE may issue a waiver of the prohibition if it is in the national security interests of the United States to allow such a sale or export. Finally, the bill establishes requirements and incentives to reduce fuel demand and increase fuel supply, including by (1) providing financial assistance for projects to electrify the transportation sector, (2) setting requirements concerning the minimum percentage of federal vehicles that must be zero-emission vehicles, and (3) directing DOE to establish a program to increase the amount of crude oil refined in oil refineries in certain countries in the Western Hemisphere.
Sponsors: Rep. Pallone, Frank, Jr. [D-NJ-6]
Target Audience
Population: People dependent on or involved in the petroleum industry and energy consumption sectors
Estimated Size: 100000000
- The bill affects operations of the Strategic Petroleum Reserve and involves creation of economic and strategic petroleum reserves, directly impacting the petroleum sector.
- It will affect domestic oil producers as the DOE is directed to acquire crude oil when prices are low.
- Refiners and distributors of gasoline and diesel will be impacted due to the establishment and management of a large refined petroleum product reserve.
- Residents in the Northeastern United States will be directly impacted through the increase of the Northeast Home Heating Oil Reserve, potentially stabilizing heating oil supplies.
- The prohibition of sales and exports to specific countries will impact international relations and companies involved in global oil trading.
- Efforts to electrify the transportation sector and mandate zero-emission federal vehicles impact manufacturers, especially those producing vehicles and technologies in the electric vehicle supply chain.
- Programs to increase crude oil refining in the Western Hemisphere could affect oil refining companies in those regions.
Reasoning
- Understanding the broad reach of the policy, I focused on stakeholders most directly impacted by petroleum industry changes, including workers in the oil production and refining sectors as well as consumers likely to benefit from strategic reserves, like those using heating oil in the Northeast.
- I included varying perspectives to capture potential changes in wellbeing, from those benefiting financially through more stable energy prices or job opportunities, to those potentially losing market opportunities due to export restrictions.
- While the overall policy increases economic stability for consumers of petroleum products, not everyone directly impacted will see significant short-term wellbeing improvements, considering factors like job security and technological change requirements.
Simulated Interviews
Oil Refinery Engineer (Houston, Texas)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I'm a bit worried that focusing too much on increasing refining in other countries might affect my job here.
- However, stabilizing domestic oil prices could benefit the U.S. market.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Home Heating Oil Distributor (Boston, Massachusetts)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- The increase in the Northeast reserve should help buffer against price spikes, which is a relief during the winter months.
- I am hopeful that this will also help my business be more stable year-round.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 9 | 6 |
Electric Vehicle Startup CEO (Seattle, Washington)
Age: 29 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- The policy's support for electrification could significantly boost business growth and innovation.
- I'm excited about the possibilities, though competition will surely increase.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 8 |
| Year 20 | 10 | 8 |
Retired Coal Miner (Rural Kentucky)
Age: 62 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- Having more strategic reserves seems like a good idea, but it doesn't address my options shifting away from traditional energy use.
- I'm worried long-term about costs going up as we shift away from oil.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
Financial Analyst (New York City, New York)
Age: 39 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- Export restrictions could unsettle global markets, impacting more than just our trade with sanctioned countries.
- Balancing domestic stability with international trade is crucial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
Petroleum Engineer (New Orleans, Louisiana)
Age: 54 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- The strategy might offer more predictable demand for domestic oil, which is positive for my field.
- However, price manipulations can be tricky and affect planning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Urban Planner (Los Angeles, California)
Age: 25 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Incentives to reduce fuel demand align well with urban sustainability goals.
- Transition to electrified transport can greatly aid public health and economy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 8 |
| Year 20 | 10 | 8 |
Auto Mechanic (Chicago, Illinois)
Age: 41 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 12/20
Statement of Opinion:
- With a push for more electric cars, I might need to shift my skills.
- It’s a bit daunting, but policies show the direction we're heading.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Tech Entrepreneur (San Francisco, California)
Age: 33 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- I'm thrilled by the potential opportunities policy-driven market shifts can bring to the tech industry.
- Given the growing emphasis on efficiency, my business stands to gain.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 10 | 9 |
| Year 3 | 10 | 9 |
| Year 5 | 10 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 9 |
Politician (Dallas, Texas)
Age: 48 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- This policy seems well-rounded and should stabilize our domestic markets.
- Maintaining U.S. energy independence is crucial for our national security.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Cost Estimates
Year 1: $1500000000 (Low: $1000000000, High: $2000000000)
Year 2: $1400000000 (Low: $900000000, High: $1800000000)
Year 3: $1300000000 (Low: $850000000, High: $1750000000)
Year 5: $1200000000 (Low: $800000000, High: $1600000000)
Year 10: $1100000000 (Low: $750000000, High: $1500000000)
Year 100: $900000000 (Low: $500000000, High: $1200000000)
Key Considerations
- The bill demands an increase in infrastructure to store crude and refined petroleum products efficiently, which requires substantial initial investment.
- Operational challenges and costs related to the management of large reserves and rapid responses during interruptions must be addressed.
- Potential geopolitical tensions may arise due to export restrictions, impacting international relations and trade.
- The balance of incentivizing electrification versus maintaining petroleum-related jobs and industries needs careful consideration.