In today’s era of high oil and gas prices, you often hear politicians talking about the tapping into the SPR, or the Strategic Petroleum Reserve. At some point, you might be asking the same question yourself, as your fill-ups at the gas station are costing you $50, $75, even $100 depending on what kind of car you drive. “We have gas sitting in reserve? Why don’t they tap into it and lower gas prices?” Well, it’s not that easy, nor would it make much of a difference.
The Strategic Petroleum Reserve consists of 4 sites in underground salt caverns along the Gulf Coast that hold emergency supplies of crude oil””currently about 703.3 million barrels. This is just about enough to provide 58 days of oil imports – not much, really. It can be drawn down at a rate of 4.4 million barrels per day for 90 days, and for the oil to enter U.S. market it takes 13 days from Presidential decision.
Twice now, the Reserve has been used to supply more oil when oil supplies were threatened – First, in 1991, at the beginning of Operation Desert Storm the United States joined its allies in assuring the adequacy of global oil supplies when war broke out in the Persian Gulf. An emergency sale of SPR crude oil was announced the day the war began. The second was in September 2005 after Hurricane Katrina devastated the oil production, distribution, and refining industries in the Gulf regions of Louisiana and Mississippi.
As you can see, it’s going to take quite a bit more than $4.00 per gallon for gasoline/$135 per barrel for oil prices to get the government to open up the SPR. And even if they did, it would only provide very temporary relief at best – with 703 million barrels stored, it’s enough to fully supply all of our oil needs for only 35 days, as we go through 20 million barrels a day as it is right now.
So hold on tight and start looking for more efficient and/or alternative ways to get around – it is only going to get much worse before it gets any better.