U.S. Strategic Petroleum Reserve
The Strategic Petroleum Reserve (SPR) is the nation's
first line of defense against an interruption in petroleum supplies.
It is an emergency supply of crude oil stored in huge underground salt
caverns along the coastline of the Gulf of Mexico.
Decisions to withdraw crude oil from the SPR during an energy emergency
are made by the President under the authorities of the Energy Policy
and Conservation Act. In the event of an energy emergency, SPR oil would
be distributed by competitive sale. Although used for emergency purposes
only once to date (during Operation
Desert Storm in 1991), the SPR's current size (more than 544 million
barrels) and the U.S. government's stated policy to withdraw oil early
in a potential supply emergency make the SPR a significant deterrent
to oil import cutoffs and a key tool of foreign policy.
The need for a national oil storage reserve has been recognized for
at least five decades.
Secretary of the Interior Harold Ickes advocated the stockpiling of
emergency crude oil in 1944. President Truman's Minerals Policy Commission
proposed a strategic oil supply in 1952. President Eisenhower suggested
an oil reserve after the 1956
Suez Crisis. The Cabinet Task Force on Oil Import Control recommended
a similar reserve in 1970.
But few events so dramatically underscored the need for a strategic
oil reserve as the 1973-74 oil embargo. The cutoff of oil flowing into
the United States from many Arab nations sent economic shockwaves throughout
the Nation. In the aftermath of the oil crises, the United States established
President Ford set the SPR into motion when he signed the Energy Policy
and Conservation Act (EPCA) on December 22, 1975. The legislation declared
it to be U.S. policy to establish a reserve of up to 1 billion barrels
The Gulf of Mexico was a logical choice for oil storage sites. More
than 500 salt domes are concentrated along the coast. It is the location
of many U.S. refineries and distribution points for tankers, barges
and pipelines. In April 1977, the government acquired several existing
salt caverns to serve as the first storage sites. Construction of the
first surface facilities began in June 1977.
On July 21, 1977, the first oil - approximately 412,000 barrels of
Saudi Arabian light crude - was delivered to the SPR. Fill of the Nation's
emergency oil reserve had begun.
Today, the SPR has the capacity to hold 700 million barrels. It is
the largest emergency oil stockpile in the world. [Click to open current
inventory window]. Together, the facilities and crude oil represent
more than a $20 billion national investment.
Fill was suspended in FY 1995 to devote budget resources to refurbishing
the SPR equipment and extending the life of the complex through at least
the first quarter of the next century. In 1999 fill was resumed in a
joint initiative between the Departments of Energy and the Interior
to supply royalty oil from Federal offshore tracts to the Strategic
The Desert Storm Drawdown
Stockpiling crude oil in the SPR reduces the nation's vulnerability
to economic, national security, and foreign policy consequences of petroleum
supply interruptions. The SPR proved its value in 1991 when a partial
drawdown, coupled with a coordinated international supply response,
dampened oil price hikes during the Persian
On January 16, 1991, coinciding with the international effort to counter
the Iraqi invasion of Kuwait, President Bush ordered the first-ever
emergency drawdown of the SPR. The Department of Energy immediately
implemented a drawdown plan to sell 33.75 million barrels of crude oil,
the United States' portion agreed to by the International Energy Agency.
The drawdown proceeded on schedule and without major complications.
Between the initial authorization and the final sale, however, world
oil supplies and prices stabilized, and the United States reduced the
sales amount to 17.3 million barrels which were sold to 13 companies.
The Desert Storm drawdown and the price stability that resulted in
world markets showed the merits of the U.S. policy of announcing its
intent to draw upon its emergency stockpile early and in large quantities
should the U.S. oil supply be threatened.
In managing the Strategic Petroleum Reserve Program, the Office of
Fossil Energy's overriding objective is to maintain the readiness of
the oil stockpile for emergency use at the President's direction.
From 1993-2000, the Department of Energy's top priority was to ensure
the continued readiness of the Reserve through at least the year 2025
by conducting a major life-extension program. This included replacing
or refurbishing pumps, piping and other key components at the SPR's
Gulf Coast sites. The program was completed in March 2000 on schedule
and below original cost estimates.
of Fossil Energy, U.S. Department of Energy