The Strategic Petroleum Reserve, or SPR, is the largest government-owned stockpile of emergency crude oil in the world.
It was created to reduce the impact of disruptions in supplies of petroleum products and help the United States avoid a recurrence of the 1973-74 oil embargo when some industrialized countries were unable to obtain sufficient quantities for their needs. The SPR has a maximum storage capacity of 727 million barrels and holds about 695 million barrels.
The reserve is authorized and managed by the U.S. Department of Energy’s Office of Fossil Energy. The Energy Policy and Conservation Act (EPCA) of 1975 authorizes the President to fill this reserve up to 1 billion barrels through purchases from domestic crude oil producers at world market prices using annual appropriations from Congress (in practice, however, Congress hasn’t provided funds since 1997). An additional 200 million barrels may be purchased with funds generated by sales from the reserve under certain conditions stated in EPCA. No more than 30 million barrels are allowed for emergency exchange agreements with other countries or international organizations under EPCA; these agreements were suspended in 2012 but reinstated by Executive Order 13754 on December 28, 2016.(1)
The President has broad authority over when crude oil is drawn from the reserve.
The President can draw from the Reserve for many types of emergencies, but there are a few things to keep in mind about how the Reserve operates. First off, no one else can make that decision; it's up to the President alone. The President has to have a "good reason" to use the reserve. Also, Congress has to be notified as early as possible if the reserve is used. Finally, if Congress requires it, the President must use crude oil from there or some other government reserve. However, they cannot use any of it for purposes other than an emergency or national security matter unless Congress authorizes them first.
The federal government currently owns and operates four underground salt caverns in Louisiana, which house nearly 699 million barrels of crude oil in nearly 5 million barrels of containment space.
The federal government currently owns and operates four underground salt caverns in Louisiana, which house nearly 699 million barrels of crude oil in nearly 5 million barrels of containment space. The Strategic Petroleum Reserve, as it is known, is the largest of its kind in the world. It was created following the 1973-1974 oil embargo to hold a supply of crude oil that could respond to disruptions in U.S. energy supplies.
The reserve has more than enough capacity to meet its goal under normal operations, and these caverns are not at full capacity yet (with one exception: Big Hill’s caverns were filled last year). That suggests that additional permits could be added without compromising the reserve’s ability to respond to unexpected events like major hurricanes or political conflicts abroad.
A portion of the SPR’s strategic value comes from the notion that its existence deters other countries from cutting off access to their oil reserves.
The US Strategic Petroleum Reserve (SPR) is the largest stockpile of government-owned crude oil in the world. Begun in 1975, it has a current capacity of 713.5 million barrels and is designed to protect the US from severe energy supply disruptions that would adversely affect the economy and national security.
A portion of this strategic value comes from the notion that its existence deters other countries from cutting off access to their oil reserves. After all, if you knew your enemy had a large stack of cards up their sleeve, why would you bother trying to take the pot?
In reality, however, it’s not clear how much deterrence value there really is in just having such a stockpile.
The sale comes at a time when American oil producers are unable to sell all the oil they produce.
You might be wondering: why is the U.S. selling oil when it has been a net exporter for the first time in 75 years?
The sale comes at a time when American oil producers are unable to sell all the oil they produce.
The increased demand for petroleum, coupled with an low supply of oil has resulted in prices rising to historic highs.
Lack of supply and increase demand are the major culprits when it comes to the cause of rising oil prices. Why have demand for oil risen so sharply? There is the obvious answer, which is that people are driving more, as a consequence of being locked down for so long. The economy is good and booming and this contributes to more demand.
Does the Russia and Ukraine war cause prices to rise or is this just an excuse?
You can be the judge of this since the mainstream media is pretty much a joke.