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5 Things You Need to Know About the National Strategic Petroleum Reserve
By Jennifer Olvera
What the National Strategic Petroleum Reserve Is
This federally owned stockpile of about 700 million barrels of reserved oil is stored in four underground salt caverns along the Gulf of Mexico. Given the fact that hundreds of salt domes exist along the coast and many refineries and distribution sites are located here, it was a practical choice for the site of the Strategic Petroleum Reserve (SPR). Removing crude oil from the reserves requires presidential approval per the Energy Policy and Conservation Act. This happened in 1991 during Operation Desert Storm and again post-Hurricane Katrina in 2004. Once removed, the petroleum is distributed by sale to oil companies.
History of the National Strategic Petroleum Reserve
Harold Ickes, then-Secretary of the Interior, called for the stockpiling of crude oil in 1944. By 1952, President Truman's Minerals Policy Commission advocated a strategic oil supply, while President Eisenhower recommended a reserve after the Suez Canal Crisis. Over a decade later, the Cabinet Task Force on Oil Import Control asked for a reserve in 1970. But it was the Arab oil embargo in 1973-1974 that finally left the United States no choice but to create the National Strategic Petroleum Reserve. The reserves were started in 1975. In 1977, an initial 412,000 barrels of light crude oil from Saudi Arabia arrived at the SPR.
Where the Oil Comes From
The SPR reached 700 million barrels of crude oil in 2005. The reserve primarily contains crude oil that has a high sulfur content. Typically, the oil is received in-kind from those who lease the federally owned Outer Continental Shelf in the Gulf of Mexico. Revenue from sales is deposited into the Federal treasury.
Where Things Stand Today
Overseen by the United States Department of Energy, the reserve's current capacity is 727 million barrels, making it the world's largest emergency stockpile of crude oil. (Japan's is reported to come in second with a 579 million barrel capacity.) Access to the reserves is based on the 1975 Energy Policy and Conservation Act (EPCA), which states a maximum removal of 4.4 million barrels per day. As of February 2008, the Strategic Petroleum Reserve's inventory was 698.6 million barrels, which totals upwards of $70 billion in petroleum.
There Are Limitations to the Reserve
The National Strategic Petroleum Reserve only holds crude oil. It does not stockpile gasoline, diesel, or kerosene. While there are some small-scale reserves of heating oil on the east coast, the Federal Government, under the hand of the Department of Energy, does not possess gasoline reserves on a comparative scale. Consequently, help from members of the International Energy Agency would likely be required in order to avoid disruption in refinery production should a crisis occur.
Jennifer Olvera, a graduate of DePaul University in Chicago, has been writing professionally for over a decade. In addition to covering the "green scene" for publications such as Where Magazine and Crain's, she has become one of the preeminent dining, food, and entertainment writers in Chicago. She has regularly been published in Chicago Magazine, Chicago Sun-Times, Chicago Tribune, Zagat, Citysearch.com, and Gayot.com.
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