The Department of Energy announced today the release of the Long-Term Strategic Review of the Strategic Petroleum Reserve (SPR). The congressionally-mandated study provides an overview of the SPR and addresses key challenges that will impact the Reserve’s ability to carry out its energy security mission.
As expanding North American crude oil production has substantially reduced waterborne imports into the United States and changed the flow of petroleum, numerous questions have arisen about the future of the SPR. Areas examined in the report include:
- The state of the SPR’s surface and subsurface infrastructure;
- Bottlenecks in the North American midstream infrastructure that impact the SPR’s ability to move oil to the market;
- Costs and benefits of SPR options;
- SPR modernization requirements for infrastructure life extension and the addition of dedicated marine terminals; and
- Issues with the SPR’s authorizing legislation, the Energy Policy and Conservation Act (EPCA).
Each of these areas are evaluated with consideration given to requirements of the Bipartisan Budget Act of 2015 and the Fixing America’s Surface Transportation (FAST) Act, which mandate the sale of an estimated 124 million barrels of the SPR’s crude oil inventory and authorize the funding of an SPR modernization program through the sale of up to an additional $2 billion worth of oil. This conclusion of the review will help inform decisions about the SPR going forward.
With an inventory of approximately 700 million barrels, the SPR remains the world’s largest supply of emergency crude oil. The federally-owned oil stocks are stored in underground salt caverns along the coastline of the Gulf of Mexico.
The full report has been transmitted to Congress and may be found here.