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Posts Tagged ‘SPR refill’

SPR inching upward, cracks the 400 million barrel mark

Posted in energy policy, tagged , , , , on May 20, 2025| Leave a Comment »

The House Energy and Commerce Committee has proposed $2 billion to repair, replenish, and maintain the Strategic Petroleum Reserve. The proposal includes $1.32 billion for oil purchases and $218 m for maintenance, with the remaining funding allocated for the buyback of previously mandated SPR sales.

Energy Sec. Wright has called for the SPR to be refilled, for the infrastructure to be reviewed, and for plans to be developed to safeguard this strategically important asset.

Although not ostensibly a reason for refilling the reserve, doing so will reduce the risk of a freefall in oil prices and the associated economic turmoil.

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Closing the books on the Biden SPR

Posted in energy policy, tagged , , , on January 30, 2025| Leave a Comment »

CNBC image: April 1, 2022

Closing the books on the Biden administration’s management of the Strategic Petroleum Reserve:

  • Incoming reserve as of 1/22/2021: 638.086 million bbls (This was also the max. volume during the Biden administration.)
  • Outgoing reserve as of 1/17/2025: 394.566 million bbls
  • Net loss: 234.520 million bbls
  • % loss: 38.2%
  • Cost to replace (assuming $70/bbl ave. oil price): $16.416 billion
  • Time required to refill at max. rate of 685,000 bopd: 342.5 days (Taking into consideration acquisition, operational, and maintenance delays, and concerns about oil price impacts, a more realistic estimate would be 5 years, and this would require a concerted effort.)

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As expected, the SPR refill has been paused

Posted in energy policy, tagged , , , on April 3, 2024| Leave a Comment »

After announcing that the planned 40 million barrel SPR refill would be the equivalent of the massive 180 million barrel withdrawal, DOE has halted the refill at < half the planned amount. There is no end in sight for the SPR deficit (chart below).

Citing rising oil prices, the DOE said, “We will not award the current solicitations for the Bayou Choctaw SPR site and will solicit available capacity as market conditions allow.” Three million barrels of oil had been slated for delivery to the Bayou Choctaw SPR site in August and September.

Forbes

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Granholm’s SPR update: Interesting math

Posted in energy policy, tagged , , , on March 20, 2024| Leave a Comment »

U.S. crude oil stockpiles in the Strategic Petroleum Reserve (SPR) at year-end will be at or exceeding the level prior to a massive 180 million barrel sale two years ago, U.S. Energy Secretary Jennifer Granholm said on Monday.

While the Department of Energy only expects to replenish by the end of this year about 40 million barrels since the 180 million sale, another 140 million barrels that would have been drained from 2024-2027 will stay in the SPR due to the cancellation in 2022 of congressionally mandated sales.

The department declined to provide a final number of stocks expected to be in the reserve at the end of the year.

Reuters

Reality check:

  • 40 million is not equal to 180 million.
  • Not withdrawing 140 million more bbls does not add 140 million bbls to the depleted reserve.
  • Based on the Secretary’s comments, the over-under for the reserve at the end of the year is 390 million bbls. (Take the “under.”)

The actual SPR status:

Sec. Granholm is also quoted as saying the administration’s LNG permitting pause “will be long behind us by this time next year.” Skeptics might see this as confirmation that the permitting pause was strictly for election year political purposes.

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Strategic Petroleum Reserve: still over 50% depleted, but up 4% from the 2023 low

Posted in energy policy, tagged , , , , , on March 8, 2024| Leave a Comment »

from EIA data

Last May, Cathy Rodgers, Chair of the House Committee on Energy and Commerce, requested that the General Accountability Office (GAO) address the following questions (letter attached):

  1. Has the Biden administration conducted a long-term strategic review of the SPR, and if so, is the review adequate to inform decision making and protect the nation from energy supply disruptions in both current and future scenarios?
  2. What damage and increased maintenance requirements, including well remediation, cavern closure, and both pipeline and pump replacements, have resulted from the recent drawdowns?
  3. What physical or cybersecurity threats are there to the SPR facilities?
  4. How thorough are DOE’s studies and assessments of the SPR’s structural integrity?
  5. Has the DOE developed an adequate plan for replenishing the SPR? If so, please explain.

The GAO has not yet published their report.

05_08_23_letter_to_comptroller_general_dodaro_d0148d47a0Download

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How’s the Strategic Petroleum Reserve refill going?

Posted in energy policy, tagged , on January 25, 2024| Leave a Comment »

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“We are refilling (the SPR) as much as we can. We’ve been doing that for the last several months.” David Turk, Deputy Secretary, DOE, on 12/4/2023 

Posted in energy policy, tagged , , on December 6, 2023| Leave a Comment »

Huh? Since 9/1/2023, the SPR has increased from 350.34 million bbls to 351.9 million bbs, a total of only 1.56 million bbls. From the historic low of 346.76 bbls on 7/7/2023, the SPR has increased by just 5.14 million bbls, and remains at only 48% full. The total refill since the 2023 low amounts to only 0.7% of capacity.

DOE knew that refilling the SPR would be a very slow process given the significant acquisition, operational, and maintenance challenges. Nonetheless, political concerns about oil prices were prioritized and the reserve was recklessly depleted.

Prediction: The SPR will still be <400 million bbls at the end of 2024.

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Strategic Petroleum Reserve update: scratch the mini-refill

Posted in energy policy, tagged , , on August 4, 2023| Leave a Comment »

WASHINGTON, Aug 1 (Reuters) – The Biden administration has pulled an offer to buy 6 million barrels of oil for the Strategic Petroleum Reserve, an Energy Department spokesperson said on Tuesday, as oil prices are expected to keep rising after a output cut from Saudi Arabia.

So much for adding a few drops to the SPR bucket. When your reserve is down 380 million barrels in a seller’s market, you don’t have a lot of purchasing leverage. Don’t expect much of an SPR refill anytime soon. It’s easy to deplete strategic assets; much more difficult to replace them.

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SPR: more red ink

Posted in energy policy, tagged , , , on July 14, 2023| Leave a Comment »

The Strategic Petroleum Reserve is ⬇ to 346.8 million barrels, the lowest volume since August 19, 1983, when the SPR was still being filled.

But fear not, 6 million barrels, which is less than 1/4 of the amount withdrawn just in 2023 YTD, are to be added in the fall, and Secretary Granholm assures us that the SPR will be refilled (but not completely and maybe not until the Administration’s second term 😀).

Keep in mind that DOE only intends to buy when prices are <$72/bbl, that the maximum refill rate is 685,000 bopd, and that acquisition, operational, and maintenance delays are to be expected .Filling the reserve to its 727 million barrel capacity was a 28 year process.

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DOE announces SPR purchases; drop in the bucket?

Posted in energy policy, tagged , , , on June 16, 2023| Leave a Comment »

WASHINGTON, D.C. — Today, the U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announced that contracts have been awarded for the acquisition of 3 million barrels of U.S. produced crude oil for the Strategic Petroleum Reserve (SPR).  These contracts follow the Request for Proposal that was announced on May 15, 2023. Furthering the Biden-Harris Administration’s three-part replenishment plan, DOE also announced a new Notice of Solicitation to purchase approximately 3.1 million additional barrels of crude oil to the Big Hill SPR site this September.

DOE (6/9/2023)

The Strategic Petroleum Reserve is now down to 351.7 million bbls, the lowest since 8/26/1983. The 6 million bbls in contracted and proposed purchases will replace only 30% of the oil withdrawn just in 2023 YTD, 2.0% of the amount withdrawn since 1/1/2021, and 1.6% of the volume needed to refill the SPR to capacity.

Given that 2024 is an election year, the prospects for substantial purchases next year would seem to be poor.

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