The Strategic Petroleum Reserve (SPR) is a reserve inventory
of crude oil intended for use in the event of war or extreme emergencies. Oil is stored in 62 salt caverns at four
sites along the Gulf of Mexico and holds a total of 714 million barrels of
crude oil. In the event of war, the
reserve could be used not only for direct military oil needs but also to supply
defense industries. To give an idea of
the practical impact of the SPR, as of Jan 2022, the SPR represented around
1450 days of total U.S. petroleum net imports at the usage rates at that
time.[1]
As an emergency supply, the importance of maintaining the
supply at full capacity is self-evident.
Unfortunately, President Biden drew down the storage levels for political
gain in violation of the intent of the reserve.
From Wikipedia,
Again from Wikipedia,
The SPR is a military safety net in the event of war and should not be manipulated for political purposes. Even using it to mitigate occasional gasoline shortages, as other Presidents have done in the past, is wrong.
The Trump administration is refilling the reserve at the
maximum rate the facilities can accept which is around 3 million barrels per
month. At that rate, it will take quite
a while to completely refill the reserve – I calculate 120 months. If correct, this is staggeringly slow and
emphasizes why the reserve should never be tapped for anything other than a war
or major disaster.
Redstate website has an interesting article on the status of
the SPR.[3] Energy Secretary Chris
Wright said,
Discussing Biden’s actions, Wright noted,
So, not only was the Biden action irresponsible, it apparently caused structural damage of some sort. Even when the damage is repaired, given the apparent refill rate, we will be years refilling Biden’s drawdowns.
____________________________
Note: For anyone who might be tempted to argue that
the President can draw from the SPR for non-emergency reasons because it’s been
done before, here is the relevant law governing drawdowns from the SPR. Nothing in the law allows the President to
draw from the SPR just because gas prices have increased a bit before an
election.
42 U.S. Code § 6234 - Strategic Petroleum Reserve
On March 31, 2022, President Joe Biden announced that his administration would release 1 million barrels of oil per day from the reserve for the next 180 days … The 2022 release became the largest ever SPR sale and lowered the SPR to its lowest levels in 40 years. … The Biden administration continued to release reserves in 2023, selling off 45% of the SPR by September 2023.[2]
Again from Wikipedia,
As of March 7, 2025, the inventory was 395.3 million barrels … [ed. 55% of capacity]).[2]
The SPR is a military safety net in the event of war and should not be manipulated for political purposes. Even using it to mitigate occasional gasoline shortages, as other Presidents have done in the past, is wrong.
We are refilling the Reserve now and we will continue to refill the Reserve the whole time I'm in office.[3]
Discussing Biden’s actions, Wright noted,
You know, that was just such an irreponsible action to drain that reserve so quickly for electoral reasons, and in fact it was drained so fast, it did some damage to the facilities. So right now we can only fill two of the four major salt caverns that we have. So, we're doing repair work on the other two, we're slowly filling the other two … [3]
So, not only was the Biden action irresponsible, it apparently caused structural damage of some sort. Even when the damage is repaired, given the apparent refill rate, we will be years refilling Biden’s drawdowns.
(f)(1)The drawdown and distribution of petroleum products from the Strategic Petroleum Reserve is authorized only under section 6241 of this title, and drawdown and distribution of petroleum products for purposes other than those described in section 6241 of this title shall be prohibited.
https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(United_States)
https://redstate.com/wardclark/2025/04/28/energy-secretary-chris-wright-on-strategic-petroleum-reserve-were-filling-it-right-now-n2188445
https://www.energy.gov/articles/department-energy-awards-management-and-operating-mo-contract-strategic-petroleum-reserve
ReplyDeleteIt's astounding to me that the Department of Energy is awarding contracts to private parties to manage and operate the strategic petroleum reserve. This is a strategic national asset - it should not be the remit of private business to manage something this important. We don't award contracts to private companies to manage our nukes - our warheads are under the control and maintennance of the Air Force and Navy!
Why are you surprised? We use the civilian world to manage the vital health system, to develop and manage the Internet (without which our society would collapse!), to build and maintain our transportation system, and so on. Look at what's happened when the government has taken control. The postal system is a disaster. The IRS has gone politically rogue. The CDC is a fraudulent joke. And so on.
DeleteThank goodness the government is NOT involved in the hands on management of the oil reserve!
By the way, a comparison between a nuclear weapon and a barrel of oil is a good example of apples and oranges.
In 2024 the United States exported approximately 4 million barrels of oil per day. In a national emergency these exports could immediately be diverted to support the domestic economy. Even acknowledging that crude oil is not an entirely fungible commodity, this is basically a nothingburger.
ReplyDeleteCT
As an example, in Mar 2024, the US IMPORTED 192,082,000 barrels of oil which is 6.2 million barrels of oil per day.
DeleteIn the first 3 quarters of 2024, the US imported 1.78 billion barrels of oil which is an average of 6.5 million barrels per day.
An Internet search showed: "As of November 2024, the U.S. crude oil trade deficit was 2.40 million barrels per day ..."
"exported approximately 4 million barrels of oil per day. In a national emergency these exports could immediately be diverted to support the domestic economy."
And, in a national emergency such as war, we would likely lose our imports, resulting in a net LOSS of some 2 million barrels per day. A bit more than a nothingburger.
We are a net importer of oil though that has not always been the case and the current administration is working to restore that case.
We need to invest further in fracking. It offers us means of stretching our existing oil reserves, but the big problem is that fracking has always barely been economically viable. It just makes more business sense to buy oil overseas when it's cheaper than fracking.
DeleteNow, when we lose our imports in time of war, it would have been really great to be able to stretch our domestic production...
" It just makes more business sense"
DeleteWhich is irrelevant when it comes to a strategic resource. Strategic resources MUST be sole sourced within the US because, as you say, when war comes, we'll likely lose access to foreign sourced strategic resources even if they are from friendly nations (who will, undoubtedly and understandably, hoard those resources for their own defense needs).
"fracking"
We'll leave that issue alone as it's beyond the scope of this blog.
Not sure where you are getting your figures
Delete----
https://www.eia.gov/tools/faqs/faq.php?id=727&t=6
In 2023, the United States imported about 8.51 million barrels per day (b/d) of petroleum from 86 countries. Petroleum includes crude oil, hydrocarbon gas liquids (HGLs), refined petroleum products such as gasoline and diesel fuel, and biofuels. Crude oil imports of about 6.48 million b/d accounted for about 76% of U.S. total gross petroleum imports.
In 2023, the United States exported about 10.15 million b/d of petroleum to 173 countries and 3 U.S. territories (American Samoa, Puerto Rico, and U.S. Virgin Islands). Crude oil exports of about 4.06 million b/d accounted for 40% of total U.S. gross petroleum exports. The resulting total net petroleum imports (imports minus exports) were about -1.64 million b/d, which means that the United States was a net petroleum exporter of 1.64 million b/d in 2023.
---
My sense is that 2024 was similar
I don't know about 2023 but the 2024 figures all came from government websites. Given this is not an economic blog, this is as far as I care to pursue this. None of it changes any conclusion.
DeleteWithout getting too deep into the weeds as this is not an oil blog, the United States has enormous proven reserves of recoverable oil (tens of billions of barrels).
DeleteAt the moment we are not pumping at anything like capacity because of low prices and other commercial considerations.
If the government was seriously concerned at the current level of the strategic oil reserve it could simply pay companies to leave conventional oil in the ground, or leave the ‘drilled but undeveloped’ shale fields in that state until the output was required. In an emergency situation this could rapidly and cheaply be brought on stream.
Not quite as simple as that (refinery configurations etc.), but in a war situation running out of oil would be one of the least of our concerns.
"Which is irrelevant when it comes to a strategic resource. Strategic resources MUST be sole sourced within the US because, as you say, when war comes, we'll likely lose access to foreign sourced strategic resources even if they are from friendly nations (who will, undoubtedly and understandably, hoard those resources for their own defense needs)."
DeleteWe're in agreement. The problem is that over the last two decades, the government has been content to leave this in the hands of the oil and gas industry, instead of treating oil and energy independence as a strategic asset and managing it accordingly.
We produce light sweet crude. Oil refining capacity is designed for heavier/sour crude.
DeleteWhich comes from Canada or Venezuela. Retooling refineries is incredibly expensive. Canada sends a lot of oil to the US to be refined then reimported as we don’t have much refining capacity for heavy sour crude. Canada supplies something over 40% of US crude imports at a discounted rate. India and China are also major markets for heavy sour crude as they have the refining capacity.
DeleteAdapting refineries designed to process sweet (low sulfur) crude to run heavy (‘sour’) crude is costly but not technically difficult. Doing this in reverse is pretty straightforward - you’re going to lose some efficiencies but otherwise not really a serious problem.
Delete(idk what the Navy needs in terms of fuel for its warships - might be a different issue altogether.)
Looking at the math, I wonder how we can pump 1 million barrels a day out of the reserve (30m/month) and only refill it at a rate of 3 million barrels a month. Seems some new plumbing is in order.
ReplyDeleteI would assume that the reserve was designed to be filled over time and then left alone so no great need for rapid refill. In contrast, withdrawals were assumed to be in time of emergency when large volumes might well be needed quickly.
DeleteJust speculation on my part.
Very off-topic... but just read about BAEs groundbreaking on a Shiplift in Jacksonville. Intrigued, I watched some company YT vids on the system. Im unsure of the pricetag, but it seems like a viable replacement for drydocks, and also perhaps a better utilization of waterfront space, as well as increased capacity etc.
ReplyDeleteWith shipyards and maintenance being such a current crisis, this is just a seemingly smart idea I thought I'd share...
I saw that too, and was impressed. I'm thinking about a post on it but I don't really have any value-added analysis beyond the announcement itself and the obvious beneficial impact.
DeleteThe one note of caution is that it doesn't matter how many lifts/drydocks we have if we haven't got sufficient numbers of workers to do the work once the ships are out of the water. Worker availability is still the limiting factor more so than lifts/drydocks. Even if we could magically lift the entire Navy out of the water tomorrow, we'd still only have enough skilled trades to work on ten (or whatever limited number) of them.
So, very good news but with a huge caveat.
A vid on how it works. Evidently it's been around a while, but I'd never heard of it til the article about Jacksonville.
Deletehttps://youtu.be/3i4tro79Slg?si=vTdaz4jBANyJPXs9
Good point... and same here, not sure what to add beyond it seeming like a bright idea that could potentially help shipyard throughput, the caveat being like you said, worker numbers, and of course, redesigning acres of shipyard/ waterfront...
DeleteI have wondered why there is no strategic refined product reserve. A fleet of tankers holding a years supply of fuel for the Pentagon (100 million barrels) would be around 200 NeoPanamax sized tankers (~500,000 barrels per ship) or 565 T-AOE Fast combat supply ships (177,000 barrels per ship).
ReplyDeleteA ship building program that would build the refined product reserve over 10 years would add 20 to 57 tanker builds per year (more if the tankers are smaller). It would go a long way to support shipbuilding in the United States.
MLW
How would you crew and maintain these couple hundred ships and where would you station them?
Delete"why there is no strategic refined product reserve."
DeleteUntil recently, the Navy had the Red Hill (Hawaii) fuel storage facility which held 250M gallons of fuel. That's nowhere near a year's supply but I wonder if there are other bulk storage facilities? Any idea?
The average crew size for a VLCC Tanker is 24-26 sailors, smaller tankers usually have smaller crew. 14,690 (26 x 565) sailors for the more numerous, smaller tanker scenario and 5,200 (26 x 200) for the larger tanker scenario. The total crew may be able to be reduced if crews are responsible for more than one ship (although that would reduce the ability to mobilize the reserve)
DeleteI would increase the size of the Naval Reserve (currently~56,000), create an organization like the Civil Air Patrol, or both.
Since the reserve would be at anchor for the majority of the time, the ships would need to be stationed near the sailors/cadets. The reserve ships would most likely need to be near US naval bases or Allied ports with continuous US presence. The sailors/cadets would be charged with providing the required maintenance, starting the engines and rarely sailing to offload the fuel and take on a fresh cargo (military fuel is able to stored for 3 years with minimal changes).
It looks like the DOD does a poor job in overseeing its storage according to the following article.
https://www.civilbeat.org/2024/04/not-just-red-hill-hundreds-of-military-fuel-depots-threaten-environment-and-public-health/#:~:text=In%20an%20audit%20of%20nearly,failure%2C”%20the%20audit%20states.&text=The%20audit%20was%20prompted%20by,of%20additional%20leaks%20and%20spills.”
"The sailors/cadets would be charged with providing the required maintenance, starting the engines and rarely sailing"
DeleteThere's nothing wrong with your idea, in concept. However, do you recall the results of the logistics surge exercise a few years ago? It has direct applicability to your idea. In fact, it IS YOUR IDEA!!! Take a look at the results in the linked post below and see what you think:
"Logistics Surge Exercise Results"
What benefit is there at all to store significant reserves on ships? Yes, they can move around I suppose to not be a concentrated target - with then the requirement for thousands of sailors that are what, chipping rust 90% of the time? Underground tanks seems significantly cheaper and more practical. I say this sitting about 5 miles from the largest fuel depot in the United States staffed by a few dozen people.
DeleteThe results of the surge were not great. If the extremely low tempo of operation resulted in similar outcomes for the refined products reserve fleet as the logistics surge exercise, then increasing the tempo would make sense. Schedule the tankers to deliver a load and refuel every 6 months or whatever interval results in greater than 80 percent availability.
ReplyDeleteMLW
Delete100 years ago, the Teapot Dome Scandal was a result of selling our Naval Strategic Oil Reserves to private companies.
ReplyDeleteIt seems these big oil reserves are quite tempting! ha ha ha
I would add to your great post: We also have some work to do to rebuild several of our other Strategic Reserves: For example, we have a very small domestic supply of Titanium and several other vital materials. Our large stocks were sold off by Clinton after the Cold War ended. Looking back now, that was probably shortsighted decision, but most people, including me, were not too concerned at the time. We wanted a "PeAcE diViDeNd".
We've also allowed our WWII network of allied strategic material producers to fray for materials we have zero domestic supply. A good example is Liberia with its enormous supplies of latex rubber. Our Far East suppliers are all rapidly coming under China's influence. Liberia is already going that way too. It would be good to return to the excellent relations we used to have with Liberia during WWII.
I'm not sure that we have any active Naval Petroleum Reserves left. A quick Internet search failed to show any. Do you know of any?
DeleteI imagine the current SPR is the new name for it.
DeleteYou forgot Trumps drawdown.
ReplyDelete"The Bipartisan Budget Act of 2018, enacted in February 2018, calls for the sale of 30 million barrels over the four-year period of FY 2022 through FY 2025, 35 million barrels in FY 2026, and 35 million barrels in FY 2027"
"You forgot Trumps drawdown."
DeleteNo, I did not, as there was no such thing. You appear to have forgotten the facts. Allow me to remind you.
"Section 404 of the Bipartisan Budget Act of 2015—included authorization for funding an SPR modernization program by selling up to $2 billion worth of SPR crude oil in FY 2017 through FY 2020."
"As a member of the IEA, the United States is obligated to maintain stocks of crude oil and petroleum products, both public and private, to provide at least 90 days of U.S. net import protection. As net imports of crude oil and petroleum products into the United States continue to decline, this requirement can be met with lower SPR inventory levels."
These are legislative mandates not arbitrary decisions by one person.
You appear to be trying to inject politics into the discussion and this will not be allowed.
Would have been nice if one of these District Court Judges would have stopped the illegal draw down. (Sarcasm)
ReplyDelete