What Is the Strategic Petroleum Reserve?

Live Science ^ | Jul 24, 2008 | LiveScience Staff

[decimon]

The U.S. Congress is considering legislation that would require 70 million barrels of crude oil from the nation's Strategic Petroleum Reserve to be released to the open market in an effort to drive down gas prices.

That would mean pumping oil out from man-made caverns where it is stored. Only twice in the reserve's 31-year history has oil been extracted for emergencies.

[decimon]

By law, the U.S. president can order a full drawdown of the reserve to counter a "severe energy supply interruption." Several conditions allow for partial drawdowns, including "a circumstance ... that constitutes, or is likely to become, a domestic or international energy supply shortage of significant scope or duration."

I wonder what are the other conditions allowing for a partial withdrawal.

[angcat]

Probably a nuclear attack.

[cyclotic]

I was always kind of under the impression that the oil reserve was for military emergencies...only. If not, that’s the way it ought to be. We kind of need plenty of oil to run a war.

[xcamel]

That is exactly what it is for, including natural disasters. It was never meant to swing or sway the market.

[DMZFrank]

Its 2 1/2 days of US oil usage. Nacy Pelosi is an idiot. Democrats are not serious.

[whipitgood]

Exactly, only now we are using the SPR to try to manipulate the oil market. And announcing to all the world that we are using it. Are we insane?

[Popman]

70 million barrels of crude oil from the nation's Strategic Petroleum Reserve to be released to the open market in an effort to drive down gas prices.

Meaningless, stupid and dangerous gesture.

The USA uses 21 million barrels PER DAY, so 70 million is three and half days supply.

Not only that, but oil is a WORLD WIDE commodity which uses 80 plus million barrels PER DAY, so 70 million released into a global market is less than a days supply which will cause oil prices to do nothing.

That might even drive oil prices higher because we are sending a message we will not drill

[Dr.Zoidberg]

Nacy Pelosi is an idiot.

Yes, she is. Unfortunately, a great number of the people who are listening to her are idiots as well.

They likely don't know the difference between the strat. oil reserve and Jiffy Lube.

[edzo4]

I would like the democrats to please explain how the billions of barrels of oil in ANWR pumping for years would only reduce the gas price by pennies (As they have repeatedly claimed), yet somehow a one time bump of 70 million barrels into the supply is going to be a magic bullet

[Libloather]

We can’t reserve our way out of this problem.

[arthurus]

Emptying the Reserve is important to the Democrats because it leaves us in a very difficult spot vis-a-vis Iran. If we have no reserves if/when Iran shuts off the oil then Iran wins, or we don't respond to Iran at all, also Iran wins.

Those reserves are necessary for our military in the confrontation with Iran

[writer33]

You definitely can’t understate this. I can’t tell you how many people I’ve worked with that really doesn’t understand the Strategic Petroleum Reserve, which is how Democrats get away with this stupidity.

[motor_racer]

Once again the Democrats prove they have no clue about how markets establish prices - possibly because they get their money by STEALING IT!

The SPR isn’t oil in the ground. It’s inventory that has already been produced and stored.

Selling any of it reduces inventories on hand and creates a call on future production to replenish the SPR.

Both of these facts put UPWARD pressure on price.

[decimon]

I would like the democrats to please explain how the billions of barrels of oil in ANWR pumping for years would only reduce the gas price by pennies...

I don't think the price effect of ANWR oil is any more predictable than is future worldwide supply/demand. I'm for getting the oil but I wouldn't try to predict any price effect.

[Repeal The 17th]

Paraphrased in my own words from the article:
-
The reserve is located in massive salt caverns more than a half-mile deep along the Texas and Louisiana Gulf Coast. The caverns are man-made in the natural salt deposits and were carved out by drilling a well and injecting it with water to dissolve the salt, then pumping the water back out. Crude oil does not react with the salt.

Crude oil is stored rather than gas or other refined products for a couple of reasons: 1) crude oil quality does not degrade over time and 2) this offers flexibility to refine the crude into whatever various products are needed.

The storage was started in 1977, and it is run by the Department of Energy. The maximum capacity is 727 million barrels of crude oil, and as of July 24, 2008, it held 706 million barrels.

Theoretically, that amount represents about a 58 day supply (we import about 12 million barrels a day), but the oil can be only be extracted at the rate of 4.4 million barrels a day and it then it takes about 13 days for it to reach the market.

[KarlInOhio]

If Pelosi and Reid really tried they could have done something stupider. The only thing I could think of would be to use next year's seed corn to make ethanol, leaving us without any corn to grow in the future.

[RC2]

This one is easy for the President. Release the reserves, 100%. Then make ANWR the reserves. Since democrats don’t want to drill in ANWR anyway. This will drive the democrats nuts.

[mouse1]

“oil reserve for military emergencies”

Which is why we need to become energy independent
We need to stop supporting terrorists
We need to stop supporting nations (Saudis) that teach hate in their textbook
Drill Here - Drill Now!!

Pelosi AmericanVoices@mail.house.gov

[decimon]

If Pelosi and Reid really tried they could have done something stupider.

I guess this was all they had and figured the public would have no idea of what drawing from the reserve would actually mean. IOW, it sounds good.

[lewislynn]

OK I’m confused. Wasn’t it not too long ago that the Democrats were crying to stop filling the reserves to drive down prices?