Rule2025-08536
Procedures for Acquisition of Petroleum for the Strategic Petroleum Reserve
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 16, 2025
Effective
July 15, 2025
Issuing agencies
Energy Department
Abstract
This DFR amends the regulations for the procedures for acquisition of petroleum for the Strategic Petroleum Reserve (SPR) to require index-priced contracts. This change is made to align DOE's processes with industry practice. Additionally, it restores the rule to its historical norm.
Full Text
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<title>Federal Register, Volume 90 Issue 94 (Friday, May 16, 2025)</title>
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[Federal Register Volume 90, Number 94 (Friday, May 16, 2025)]
[Rules and Regulations]
[Pages 20764-20766]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-08536]
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DEPARTMENT OF ENERGY
10 CFR Part 626
[DOE-HQ-2025-0009]
RIN 1901-AB66
Procedures for Acquisition of Petroleum for the Strategic
Petroleum Reserve
AGENCY: Office of Cybersecurity, Energy Security, and Emergency,
Department of Energy (DOE).
ACTION: Direct final rule (DFR); request for comments.
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SUMMARY: This DFR amends the regulations for the procedures for
acquisition of petroleum for the Strategic Petroleum Reserve (SPR) to
require index-priced contracts. This change is made to align DOE's
processes with industry practice. Additionally, it restores the rule to
its historical norm.
DATES: The final rule is effective July 15, 2025, unless significant
adverse comments are received by June 16, 2025. Significant adverse
comments oppose the rule and raise, alone or in combination, a serious
enough issue related to each of the independent grounds for the rule
that a substantive response is required. If significant adverse
comments are received, notice will be published in the Federal Register
before the effective date either withdrawing the rule or issuing a new
final rule which responds to significant adverse comments.
ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at <a href="http://www.regulations.gov">www.regulations.gov</a> under docket
number DOE-HQ-2025-0009. Follow the instructions for submitting
comments. The docket for this final rule, which includes Federal
Register notices, comments, and other supporting documents and
materials, is available for review at <a href="http://www.regulations.gov">www.regulations.gov</a>. All
documents in the docket are listed in the <a href="http://www.regulations.gov">www.regulations.gov</a> index.
However, not all documents listed in the index may be publicly
available, such as information that is exempt from public disclosure.
The docket web page can be found at <a href="http://www.regulations.gov/docket/DOE-HQ-2025-0009">www.regulations.gov/docket/DOE-HQ-2025-0009</a>. The docket web page contains instructions on how to access
all documents, including public comments, in the docket, as well as a
summary.
In accordance with 5 U.S.C. 553(b)(4), a summary of this rule may
be found at <a href="http://regulations.gov">regulations.gov</a>, under the docket number.
FOR FURTHER INFORMATION CONTACT: Mr. David Taggart, U.S. Department of
Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue
SW, Washington, DC 20585-0121. Telephone: (202) 586-5281. Email:
<a href="/cdn-cgi/l/email-protection#01454e4446646f6473606d426e746f72646d4169702f656e642f666e77"><span class="__cf_email__" data-cfemail="04404b4143616a61766568476b716a776168446c752a606b612a636b72">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. General Discussion
II. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under Additional Executive Orders and Presidential
Memoranda
M. Congressional Notification
III. Approval of the Secretary
I. General Discussion
DOE is amending part 626 of title 10 of the Code of Federal
Regulations by this direct final rule. Part 626 contains rules that
govern the procedures for acquiring petroleum products for, and
deferring contractually scheduled deliveries to, the SPR. On October
25, 2022, DOE amended the Part 626 regulations for the first time since
being promulgated by DOE in 2006. See 87 FR 64369. The 2022 revisions
were intended to provide more clarity, including by using more
consistent language throughout the regulation; better reflect the
underlying statutory authorities, which had changed since the rule's
promulgation in 2006; better reflect the operational practices and
realities of the SPR; and provide additional flexibility in structuring
acquisitions, including by allowing fixed-price contracts. While most
of these changes were sorely needed, the changes to permit the use of
fixed-price contracts--added under claims of increased flexibility--
have only served to unnecessarily create confusion in industry, which
uses index-price contracts, with no recognizable benefit. For this
reason, DOE amends the language contemplating fixed-price contracts to
revert to the regulation's prior standard requiring index-price
contracts.
II. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866
Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' requires agencies, to the extent permitted by law, to (1)
propose or adopt a regulation only upon a reasoned determination that
its benefits justify its costs (recognizing that some benefits and
costs are difficult to quantify); (2) tailor regulations to impose the
least burden on society, consistent with obtaining regulatory
objectives, taking
[[Page 20765]]
into account, among other things, and to the extent practicable, the
costs of cumulative regulations; (3) select, in choosing among
alternative regulatory approaches, those approaches that maximize net
benefits; (4) to the extent feasible, specify performance objectives,
rather than specifying the behavior or manner of compliance that
regulated entities must adopt; and (5) identify and assess available
alternatives to direct regulation, including providing economic
incentives to encourage the desired behavior, such as user fees or
marketable permits, or providing information upon which choices can be
made by the public.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
and a final regulatory flexibility analysis (``FRFA'') for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by E.O. 13272, ``Proper Consideration of Small Entities in Agency
Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published procedures and
policies on February 19, 2003, to ensure that the potential impacts of
its rules on small entities are properly considered during the
rulemaking process. 68 FR 7990. DOE has made its procedures and
policies available on the Office of the General Counsel's website
(<a href="http://www.energy.gov/gc/office-general-counsel">www.energy.gov/gc/office-general-counsel</a>).
DOE reviewed this amendment under the provisions of the Regulatory
Flexibility Act and the policies and procedures published on February
19, 2003.
C. Review Under the Paperwork Reduction Act
This amendment imposes no new information or recordkeeping
requirements. Accordingly, Office of Management and Budget (OMB)
clearance is not required under the Paperwork Reduction Act. (44 U.S.C.
3501 et seq.).
D. Review Under the National Environmental Policy Act of 1969
DOE has analyzed this action in accordance with National
Environmental Policy Act of 1969, as amended, (``NEPA'') and DOE's NEPA
implementing regulations (10 CFR part 1021). DOE's regulations include
a categorical exclusion for rulemakings that are strictly procedural.
See 10 CFR part 1021, subpart D, appendix A6. DOE has determined that
this rulemaking qualifies for categorical exclusion A6 because it is a
strictly procedural rulemaking.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation (1)
clearly specifies the preemptive effect, if any, (2) clearly specifies
any effect on existing Federal law or regulation, (3) provides a clear
legal standard for affected conduct while promoting simplification and
burden reduction, (4) specifies the retroactive effect, if any, (5)
adequately defines key terms, and (6) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General.
Section 3(c) of E.O. 12988 requires Executive agencies to review
regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. DOE has completed the required review and
determined that, to the extent permitted by law, this amendment meets
the relevant standards of E.O. 12988.
G. Review Under the Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
<a href="http://www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf">www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf</a>.
DOE examined this amendment according to UMRA and its statement of
policy and determined that the amendment does not contain a Federal
intergovernmental mandate, nor is it expected to require expenditures
of $100 million or more in any one year by State, local, and Tribal
governments, in the aggregate, or by the private sector. As a result,
the analytical requirements of UMRA do not apply.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This amendment would not have any impact on the autonomy or integrity
of the family as an institution. Accordingly, DOE has concluded that it
is not
[[Page 20766]]
necessary to prepare a Family Policymaking Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March
18, 1988), DOE has determined that this amendment would not result in
any takings that might require compensation under the Fifth Amendment
to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to
review most disseminations of information to the public under
information quality guidelines established by each agency pursuant to
general guidelines issued by OMB. OMB's guidelines were published at 67
FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR
62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at: <a href="https://www.energy.gov/cio/department-energy-information-quality-guidelines">https://www.energy.gov/cio/department-energy-information-quality-guidelines</a>.
DOE has reviewed this amendment under the OMB and DOE guidelines and
has concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to the Office of
Information and Regulatory Affairs (OIRA) at OMB, a Statement of Energy
Effects for any significant energy action. A ``significant energy
action'' is defined as any action by an agency that promulgates or is
expected to lead to promulgation of a final rule, and that: (1) is a
significant regulatory action under Executive Order 12866, or any
successor order and is likely to have a significant adverse effect on
the supply, distribution, or use of energy; or (2) is designated by the
Administrator of OIRA as a significant energy action. For any
significant energy action, the agency must give a detailed statement of
any adverse effects on energy supply, distribution, or use should the
rule be implemented, and of reasonable alternatives to the action and
their expected benefits on energy supply, distribution, and use. DOE
will assess the need for preparation of a Statement of Energy Effects
under E.O. 13211.
DOE has tentatively determined that this rule would not have a
significant adverse effect on the supply, distribution, or use of
energy. Accordingly, DOE has not prepared a Statement of Energy
Effects. DOE may prepare such a statement for the final rule, and seeks
all comments.
L. Review Under Additional Executive Orders and Presidential Memoranda
DOE has examined this amendment and has determined that it is
consistent with the policies and directives outlined in E.O. 14154
``Unleashing American Energy,'': E.O. 14192, ``Unleashing Prosperity
Through Deregulation,'' and Presidential Memorandum, ``Delivering
Emergency Price Relief for American Families and Defeating the Cost-of-
Living Crisis.'' This amendment is expected to be an Executive Order
14192 deregulatory action.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule before its effective date.
III. Approval of the Secretary
The Secretary of Energy has approved publication of this direct
final rule; and request for comment.
List of Subjects in 10 CFR Part 626
Government contracts, Oil and gas reserves, Strategic and critical
materials.
Signing Authority
This document of the Department of Energy was signed on May 9,
2025, by Chris Wright, the Secretary of Energy. That document with the
original signature and date is maintained by DOE. For administrative
purposes only, and in compliance with requirements of the Office of the
Federal Register, the undersigned DOE Federal Register Liaison Officer
has been authorized to sign and submit the document in electronic
format for publication, as an official document of the Department of
Energy. This administrative process in no way alters the legal effect
of this document upon publication in the Federal Register.
Signed in Washington, DC, on May 9, 2025.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE amends part 626 of
chapter II, subchapter I, of title 10 of the Code of Federal
Regulations, as set forth below:
PART 626--PROCEDURES FOR ACQUISITION OF PETROLEUM FOR THE STRATEGIC
PETROLEUM RESERVE
0
1. The authority for part 626 continues to read as follows:
Authority: 42 U.S.C. 6240(c); 42 U.S.C. 7101, et seq.
Sec. 626.5 [Amended]
0
2. Amend Sec. 626.5(g)(2) through (4) by removing the word ``may'' and
add in its place the word ``shall''.
Sec. 626.6 [Amended]
0
3. Amend Sec. 626.6(a) by removing the words ``competitive principles
of the''.
[FR Doc. 2025-08536 Filed 5-12-25; 9:30 am]
BILLING CODE 6450-01-P
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