Procedures for Acquisition of Petroleum for the Strategic Petroleum Reserve

<RULE> DEPARTMENT OF ENERGY <CFR>10 CFR Part 626</CFR> <DEPDOC>[DOE-HQ-2025-0009]</DEPDOC> <RIN>RIN 1901-AB66</RIN> <SUBJECT>Procedures for Acquisition of Petroleum for the Strategic Petroleum Reserve</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of Cybersecurity, Energy Security, and Emergency, Department of Energy (DOE). <HD SOURCE="HED">ACTION:</HD> Direct final rule (DFR); request for comments. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> 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 <E T="04">Federal Register</E> before the effective date either withdrawing the rule or issuing a new final rule which responds to significant adverse comments. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at <E T="03">www.regulations.gov</E> under docket number DOE-HQ-2025-0009. Follow the instructions for submitting comments. The docket for this final rule, which includes <E T="04">Federal Register</E> notices, comments, and other supporting documents and materials, is available for review at <E T="03">www.regulations.gov.</E> All documents in the docket are listed in the <E T="03">www.regulations.gov</E> 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 <E T="03">www.regulations.gov/docket/DOE-HQ-2025-0009.</E> 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 <E T="03">regulations.gov</E> , under the docket number. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> 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: <E T="03">DOEGeneralCounsel@hq.doe.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. General Discussion</FP> <FP SOURCE="FP-2">II. Procedural Issues and Regulatory Review</FP> <FP SOURCE="FP1-2">A. Review Under Executive Orders 12866</FP> <FP SOURCE="FP1-2">B. Review Under the Regulatory Flexibility Act</FP> <FP SOURCE="FP1-2">C. Review Under the Paperwork Reduction Act</FP> <FP SOURCE="FP1-2">D. Review Under the National Environmental Policy Act of 1969</FP> <FP SOURCE="FP1-2">E. Review Under Executive Order 13132</FP> <FP SOURCE="FP1-2">F. Review Under Executive Order 12988</FP> <FP SOURCE="FP1-2">G. Review Under the Unfunded Mandates Reform Act</FP> <FP SOURCE="FP1-2">H. Review Under the Treasury and General Government Appropriations Act, 1999</FP> <FP SOURCE="FP1-2">I. Review Under Executive Order 12630</FP> <FP SOURCE="FP1-2">J. Review Under the Treasury and General Government Appropriations Act, 2001</FP> <FP SOURCE="FP1-2">K. Review Under Executive Order 13211</FP> <FP SOURCE="FP1-2">L. Review Under Additional Executive Orders and Presidential Memoranda</FP> <FP SOURCE="FP1-2">M. Congressional Notification</FP> <FP SOURCE="FP-2">III. Approval of the Secretary</FP> </EXTRACT> <HD SOURCE="HD1">I. General Discussion</HD> 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. <HD SOURCE="HD1">II. Procedural Issues and Regulatory Review</HD> <HD SOURCE="HD2">A. Review Under Executive Orders 12866</HD> 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 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. <HD SOURCE="HD2">B. Review Under the Regulatory Flexibility Act</HD> The Regulatory Flexibility Act (5 U.S.C. 601 <E T="03">et seq.</E> ) 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 ( <E T="03">www.energy.gov/gc/office-general-counsel</E> ). DOE reviewed this amendment under the provisions of the Regulatory Flexibility Act and the policies and procedures published on February 19, 2003. <HD SOURCE="HD2">C. Review Under the Paperwork Reduction Act</HD> 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 <E T="03">et seq.</E> ). <HD SOURCE="HD2">D. Review Under the National Environmental Policy Act of 1969</HD> 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. <E T="03">See</E> 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. <HD SOURCE="HD2">E. Review Under Executive Order 13132</HD> 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. <HD SOURCE="HD2">F. Review Under Executive Order 12988</HD> 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 agencie ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 19k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━