U.S. To Sell First 8 Million Barrels From Strategic Reserves

Oilprice.com ^ | 09-01-2017 | ZH

[bananaman22]

Two weeks ago we previewed that the U.S. Department of Energy could begin to sell off some of its strategic petroleum reserve (SPR) as soon as January, the beginning of a multi-year process to shrink the nation’s stockpile of oil. Congress has authorized DOE to sell off $375.4 million worth of oil in its recent budget resolution. The DOE said that such a sale could be held in January 2017.

Part of the motivation to sell crude is to finance upkeep for the SPR itself. The reserves are held in salt caverns in Louisiana and Texas, setup decades ago in the aftermath of the Arab Oil Embargo in 1973. The SPR system can hold more than 700 million barrels of oil, the largest strategic stockpile in the world. The idea is that the SPR holds 90 days’ worth of oil supplies, which could be released in the event of a global outage. A release has only occurred a handful of times, such as the Persian Gulf War, Hurricane Katrina and the Arab Spring.

[Dalberg-Acton]

Political payoffs. I forget the details, but a young guy who was living with his mom, who just happened to be a friend of Jesse Jackson, was “fronted” $25 million worth of that bounty when Clinton was in charge.

[KosmicKitty]

Why?

[bgill]

I want 2-3 Congresscritters to explain this to We, the People.

[crusadersoldier]

Actually the salt domes are relatively impermeable hence their use in storing oil. The loss is minimal.

[Owen]

1-5%

[Organic Panic]

What a bunch of F’n morons. This is not the first time they sold reserves at low prices. Fire 95% of federal workers and we won’t even notice.

[Rannug]

on earth

[clearcarbon]

"So they want to sell off some inventory to maintain and replace aging infrastructure and the SPR...inventory that would then have to be replaced when the work is done...kind of short sited. The money has to be spent regardless of the source, and ultimately the taxpayers will pay anyway."

Seems better to expand the SPR, transfer existing stock to the expansion and then upgrade the original assets. I always liked the idea of also having a economic petroleum reserve separate from the strategic one to be used for economic emergencies. Even if none of our energy came from crude oil, America depends on a lot of petroleum based products.