Nation’s oil reserve supply
The Strategic Petroleum Reserve is the world’s largest supply of emergency crude oil. Administered by the U.S. Department of Energy, these federally-owned oil stocks are stored in massive underground salt caverns along the Texas and Louisiana coastlines of the Gulf of Mexico. The supply stored for emergencies has enough for America’s needs for almost a month.
Why use underground caverns? According to the U.S. Department of Energy, the caverns offer the best security and are the most affordable means of storage, costing up to 10 times less than above-ground tanks and 20 times less than hard-rock mines.Centrally located along the Gulf Coast, the Strategic Petroleum Reserve’s oil can be distributed to nearly half of all U.S. oil refineries using interstate pipelines or barges.
The caverns
Caverns range in size from 6 to 37 million barrels in capacity; a typical cavern holds 10 million barrels and has a diameter of 200 feet and a height of 2,500 feet.
Salt caverns along the Gulf Coast have been used for storage for many years by the petrochemical industry. When it was decided to create the Strategic Petroleum Reserve, previously created salt caverns were acquired to store the first 250 million barrels. To stockpile oil beyond that, the Department of Energy created additional caverns.
Salt caverns are carved out of underground salt domes by a process called “solution mining.”
Not the only reserves
The Department of Energy also oversees:
The Northeast Home Heating Oil Reserve (1 million barrels of diesel)
The Northeast Gasoline Supply Reserve (1 million barrels of gasoline)
Naval Petroleum Reserves.
Total supply
With a storage capacity of up to 713.5 million barrels as of Aug. 31, the Strategic Petroleum Reserve currently holds approximately 445 million barrels of crude oil. That amount of crude oil, refined into gasoline, could fill more than 700 million sedans.
The U.S. produces 18.4 million barrels of oil per day, usually enough to meet its own needs. The reserves have enough to supply the U.S. for 24 days.
To tap or not to tap?
Last summer, after months of rising gasoline prices, President Joe Biden directed several releases from the Strategic Petroleum Reserve. Prices declined for about a month after five releases totaling about 140 million barrels. In October, prices remain about much higher than they were when he took office. The U.S. monthly average for a gallon of gas was $2.54 in January 2020. It rose to a high of $4.92 in June and in September was $3.70.
Republicans called the president’s use of the reserves a gimmick and a group of senators introduced legislation to ban drawdowns unless there is a severe energy supply interruption and until the Interior Department provides a plan to bolster oil and gas production on federal lands and waters.
U.S. presidents have ordered emergency drawdowns three previous times: during Operation Desert Storm, after Hurricane Katrina and in response to oil disruptions in Libya in 2011. Congress also has authorized sales from the reserves. The oil is sold to eligible companies that make the highest offers.
Oil prices and creation of the reserves
In 1960, Saudi Arabia and other foreign oil-exporting nations formed the Organization of Petroleum Exporting Countries (OPEC).OPEC halted oil exports to the United States in 1973 in order to boost oil prices and punish America for its support of Israel in the Yom Kippur War.
Congress created the reserves to ensure an adequate supply of petroleum products and prevent future shortages.
