Thursday, July 13, 2023

The Politics Of The Strategic Petroleum Reserve: A Comprehensive Review

The author of this piece, Robert Rapier, has bee commenting on the passing scene for a couple decades. A chemical engineer, he used to post to his R² Energy blog but when he changed websites/URLs we sort of lost track. Now he writes at Forbes and elsewhere as in the instant case.

Via OilPrice, July 11:

  • The SPR began to be filled during President Carter's term, with President Reagan making significant contributions and leading the SPR level to reach 560 million barrels by the end of his two terms.
  • Presidents Clinton and Obama depleted the SPR to combat high gasoline prices, with Obama leaving the reserve at 695 million barrels at the end of his term. 
  • President Biden has drawn down the SPR by 266 million barrels in his first two years, and has announced the most aggressive SPR drawdown in history, largely in response to rising gasoline prices and the invasion of Ukraine by Russia.

The U.S. Strategic Petroleum Reserve (SPR) was established in December 1975 in the wake of the 1973 OPEC oil embargo. The law establishing the SPR said it was designed “to reduce the impact of severe energy supply interruptions” such as that caused by the embargo.

The U.S. government began to fill the reserve in the late 1970s. At its high point in 2010, the level reach 727 million barrels. At present, it stands at 347 million barrels, the lowest level since August 1983.

President Trump has repeatedly claimed that he “filled up” the SPR, but Biden has “virtually drained” it. In 2022, after President Biden announced the largest SPR release in history, Trump issued a statement:

“So, after 50 years of being virtually empty, I built up our oil reserves during my administration, and low energy prices, to 100% full. It’s called the Strategic National Reserves, and it hasn’t been full for many decades. In fact, it’s been mostly empty.”

I addressed this claim at the time, but I thought it might be interesting to look at the history of the SPR, highlighting the volume changes during each administration. All data can be reviewed at the Energy Information Administration’s website (data link).

The SPR began to be filled in 1977, which was the first year of President Carter’s term. By the time Ronald Reagan was inaugurated, the SPR level had been filled to about 108 million barrels.

President Reagan made it a priority to fill the SPR. During his first term, he added 343 million barrels to the SPR, with another 109 million barrels added during his second term. By the time President Reagan left office, the SPR level had reached 560 million barrels. No other president would come close to the 452 million barrels that were added during President Reagan’s two terms....