Bush seeks $ 168 mln for SPR fill in 2008 budget

WASHINGTON, Feb 5 (Reuters) The Bush administration's 2008 budget request submitted to Congress today includes 168 million dollar in new funds to fill the nation's strategic crude oil stockpile to its full level of 727 million barrels.

The funds, which must be approved by Congress, would go toward expanding the Strategic Petroleum Reserve from its current size of 691 million barrels to fill it and eventually double it to 1.5 billion barrels by 2027.

President George W Bush unveiled the SPR expansion plans in his annual address to Congress in January.

To buy the oil, the Energy Department will use the balance of funds it raised when it sold 11 million barrels of oil to hurricane-hit US refiners in 2005, according to budget documents.

That sale generated about 600 million dollars.

The department will also use crude oil collected from oil companies as royalty payments for drilling on federal lands to fill the SPR in 2007 and 2008, according to the budget.

The reserve, created by Congress in the mid-1970s in response to the Arab oil embargo, currently holds about 691 million barrels of crude at four underground storage sites in Louisiana and Texas.

Legislation passed in 2005 called for building storage to 1 billion barrels but did not provide funding.

The US government has tapped the reserve several times in recent years -- in 1991 when Iraq invaded Kuwait and again in 2005 after hurricanes Rita and Katrina slammed into the US Gulf Coast oil patch.

Bush's new plan calls for a massive buildout, but does not specify what form it will take. Government estimates put the price tag for the additional capacity at about 65 billion dollars over 20 years, with about 55 billion dollars of that coming from the cost of the crude oil.

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