Ryan Handson
The United States Strategic Petroleum Reserve has stored between 600 and 700 million barrels of oil every year for the past 20 years, but Russia’s invasion of Ukraine caused Biden to dip into that supply. Now, his efforts to replenish the SPR are being threatened by rising prices. Here’s why Americans should be concerned!
What Is The Strategic Petroleum Reserve?
The Strategic Petroleum Reserve, also known as the SPR, is the world’s largest supply of emergency crude oil. The United States created it in 1975 as a direct response to the Arab oil embargo – which caused oil prices to spike, and the economy to suffer.
By having an emergency stockpile of crude oil, the United States can ensure Americans have access to oil – even in the midst of an energy crisis. The reserve is managed by the US Department of Energy and there are four storage sites along the Gulf Coast of Louisiana and Texas.
Can Hold Up To 714 Million Barrels Of Oil
The SPR is capable of holding up to 714 million barrels of crude oil at any given time. It started approaching that number in 2004 and hovered around 700 million barrels for the next 12 years. It started declining in 2016, when Donald Trump took office.
By the time Biden entered the Oval Office in January 2021, the SPR was still in good shape but down to 638 million barrels. That’s when things took a turn for the worse – and the SPR has been on a steep decline ever since.
Nov. 2021: Biden Releases 50 Million Barrels
On Nov. 23, 2021, President Joe Biden announced the release of 50 million barrels from the SPR to address rising gas and energy prices. At the time, it was the largest release from the reserve in US history.
“It will take time, but before long, you should see the price of gas drop where you fill up your tank,” Biden said in 2021 – adding that supply hasn’t been meeting demand. “And in the longer term, we will reduce our reliance on oil as we shift to clean energy.”
March 2022: Biden Releases 30 Million Barrels
On March 1, 2022, Biden authorized the release of another 30 million barrels of oil from the SPR – this time to address Russia’s invasion of Ukraine. Since Russia is the second largest oil producer in the world, the invasion affected everyone.
“Today’s announcement is another example of partners around the world condemning Russia’s unprovoked and unjustified invasion of Ukraine and working together to address the impact of President Putin’s war of choice,” White House press secretary Jen Psaki said.
March 2022: Biden Releases Another 180 Million Barrels
The big kicker came just 30 days later. On March 31, 2022, Biden announced the release of one million barrels of crude oil per day for the next 180 days. It resulted in the release of 180 million barrels total, which is the largest release in history.
“This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up,” the White House said at the time. “DOE will use the revenue from the release to restock the Strategic Petroleum Reserve in future years.”
How Low Is The SPR Today?
As of April 19, 2024, the US Strategic Petroleum Reserve contains just 365 million barrels – the lowest it has been in roughly 40 years. While the President announced in Oct. 2022 that they would begin replenishing the SPR, that process takes time.
“The Administration intends to repurchase crude oil for the SPR when prices are at or below about $67-$72 per barrel,” the White House wrote in 2022 – following the completion of the record release of 180 million barrels over the course of six months.
Replenishment Is Ongoing, But Only At The Right Price
When the US releases oil from the reserve, it sells it to companies across the country. In 2022, those sales amounted to $95 per barrel. Considering we released 260 million barrels that year, the US made approximately $24.7 billion on those sales.
While the government’s goal is to buy back oil at no more than $72 per barrel, those efforts can easily be disrupted if oil prices rise. Unfortunately, that’s exactly what we’ve been witnessing over the past month.
March 14: Plans To Secure 3 Million Barrels
On March 14, the US Department of Energy announced two new solicitations for roughly three million barrels of crude oil to be delivered to the SPR later this year. Both solicitations are for 1.5 million barrels, with one solicitation being delivered in August and the other in September.
“Today’s announcement advances the President’s commitment to safeguard and replenish this critical energy security asset,” the Department wrote at the time. We still need nearly 350 million barrels to fill the SPR, but every little bit helps!
April 3: Cancels Plan To Secure 3 Million Barrels
Unfortunately, the Biden Administration canceled the three million barrels promised in March – blaming the switch on a sudden rise in oil prices. While they want to buy it at no more than $72 per barrel, they currently cost around $88 per barrel.
That’s not to say the Administration is giving up on its efforts to replenish the SPR, but it does put a snag in those plans. The government is still dedicated to fixing our oil supply – they just aren’t willing to do it at a high price, which is smart.
Keeping Taxpayer’s Interest At The Forefront
In a statement regarding the canceled plan, an Energy Department spokesperson said they’re always monitoring market dynamics ‘to remain nimble and innovative’ in their replenishment approach ‘to protect the critical national security asset.’
“Keeping the taxpayer’s interest at the forefront, we will not award for the Bayou Choctaw SPR site in August and September, and will continue to solicit available capacity as market conditions allow,” the spokesperson proclaimed.
Daniel Turner Criticizes Biden’s Handling Of Oil
It makes sense to some, but others are calling Biden’s handling of the SPR ‘insanity’ – at least, that’s the case with Daniel Turner, founder of watchdog group Power the Future. He finds it ironic that Biden cut American oil production, but is now having a hard time supplying it.
“Joe Biden drained the SPR for political reasons, cut our domestic production for his climate agenda, and now he’s leaving our critical reserve more vulnerable because he’s incompetent,” he added.
Gas Prices Likely To Increase In The Near Future
Unfortunately, Biden’s decisions regarding the SPR haven’t done much to fix the rising prices at the gas pump – and that means Americans are getting the short end of the stick every time they fill their vehicle up.
“As a result, Americans are paying more at the pump, more at the grocery store and our SPR is less full during a time of rising turmoil in the Middle East,” Turner continued. Hopefully the US can get back to replenishing the SPR soon!
GIPHY App Key not set. Please check settings