By Timothy Cama - 07/21/15 05:34 PM EDT
The Senate highway bill unveiled Tuesday assumes that crude oil prices will rise by nearly 90 percent in the next 10 years in order to raise money for infrastructure.
The bill, introduced Tuesday afternoon, proposes selling oil from the federal government’s Strategic Petroleum Reserve. It’s the result of a deal hashed out by Senate Majority Leader Mitch McConnellMitch McConnellRubio: GOP Congress could go in different direction than Trump Pelosi blasts GOP leaders for silence on Trump Reid: Groping accusations show Trump’s ‘sickness’ MORE (R-Ky.) and Sen. Barbara BoxerBarbara BoxerCalifornia House Republicans facing tougher headwinds House and Senate water bills face billion difference Boxer, Feinstein endorse Kamala Harris in two-Dem Senate race MORE (D-Calif.).
But crude oil prices settled at $50.68 at the end of the trading day Tuesday on the New York Mercantile Exchange, far below what would be needed to hit the $9 billion mark.
The Senate’s forecast would have been less of a leap as recently as 2014, when oil traded for more than $100 per barrel for much of the first half of the year.
But a global glut in oil supply, combined with anemic demand, caused oil prices to crash last year, and they have yet to recover.
The oil sales ares one of numerous creative provisions that the bill uses to fund infrastructure without raising the gas tax, which has historically been the main source of funding for federal highway programs.
Other offsets include tweaks to Social Security, payments the Federal Reserve makes to banks and customs fees.
Sens. Lisa MurkowskiLisa MurkowskiWriting in Mike Pence won’t do any good in these states GOP senators avoid Trump questions on rigged election Trump campaign left out of Alaska voter guide MORE (R-Alaska) and Maria CantwellMaria CantwellUS wins aerospace subsidies trade case over the EU Wells CEO Stumpf resigns from Fed advisory panel Overnight Energy: Lawmakers kick off energy bill talks MORE (D-Wash.) said they oppose any sales from the oil stockpile that are not used to pay for energy security or related purposes, a position with which the White House agrees.
The Energy Information Administration (EIA) predicts that prices will rise slowly in the coming years, but not enough to meet the Senate’s needs.
In the EIA’s latest forecast, released in February, it said that oil will average $76.25 in 2018, and rise to $91.13 by 2025.
The Senate failed Tuesday to pass a procedural vote to move forward on consideration of the legislation.