Feeds:
Posts
Comments

Posts Tagged ‘SPR refill’

The other US deficit (SPR) continues to grow

Posted in energy policy, tagged , , on May 19, 2023| 1 Comment »

Per the latest update (5/12/2023), the Strategic Petroleum Reserve is down to 359.6 million barrels, more than 2 million bbls below the previous week. The “deficit” (i.e. the volume needed to completely refill the reserve) is now 367 million bbls, and you can’t print oil. The reserve volume is the lowest since 9/23/1983, when the SPR was still being filled.

Remember:

  • The maximum refill rate is 685,000 bopd. 
  • A complete refill at the maximum rate would require 536 days.
  • This excludes acquisition, operational, and maintenance delays, which are likely to be significant. 
  • Just adding 100 million barrels would require at least 146 days
  • Purchases of that magnitude significantly affect oil markets. Total US oil production is currently about 12 million bopd.
  • Filling the reserve to its 727 million barrel capacity was a 28 year process.

But fear not, DOE is soliciting the replacement of 0.1 to 1.0% of the oil that has been withdrawn from the SPR since January 2021. This amounts to only 2.5 to 25% of the oil sold from the reserve in 2023 alone (when we were supposedly refilling the reserve) and 0.04 to 0.4% of capacity!

DOE issued a solicitation May 15 for the oil, with delivery to occur Aug. 1-31, at a minimum offer quantity of 300,000 bbl and a maximum offer of 3 million bbl. Requests for earlier deliveries will be accommodated to the extent possible on a best-efforts basis.

OGJ

Meanwhile, oil demand and supply data do not look particularly favorable for any long term SPR purchases.

Read Full Post »

Strategic Petroleum Reserve is now <1/2 full

Posted in energy policy, tagged , , , on May 9, 2023| Leave a Comment »

Per Bloomberg, DOE says they could begin refilling the reserve this fall “if the price is right.” What if it isn’t?

Keep in mind that the maximum refill rate is 685,000 bopd. A complete refill at the maximum rate would thus require 533 days, not counting acquisition, operational, and maintenance delays. Filling the reserve to its 727 million barrel capacity was a 28 year process.

Lastly, when will DOE conduct the strategic SPR review called for by the General Accountability Office (GAO) in 2018, well before DOE began rashly withdrawing oil to moderate prices? DOE concurred with GAO’s priority recommendation for periodic strategic reviews of the SPR that would be submitted to Congress. DOE told GAO that they “would complete a SPR Long-Term Strategic Review by the end of fiscal year 2021–5 years from the last review in 2016.” That review has still not been completed.

Update: Yesterday, members of Congress asked GAO to evaluate DOE’s management of the SPR and conduct an audit of the SPR modernization program.

Read Full Post »

SPR decline resumes. Is DOE concerned?

Posted in energy policy, tagged , , on April 13, 2023| Leave a Comment »

After 12 consecutive weeks at the 371.6 million barrel level, the SPR has declined another 2 million barrels to 369.6 million barrels as of 4/7/2022. The SPR is now at its lowest level since 11/11/1983 when the reserve was still being filled.

Keep in mind that the SPR deficit is now 357 million barrels, and the maximum refill rate is only 685,000 bopd. So a complete refill at the maximum rate would require 521 days plus acquisition, operational, and maintenance delays. Filling the reserve to its 727 million barrel capacity was a 28 year process.

DOE management nonetheless seems maddingly unconcerned.

DOE comments on the SPR refill.

Read Full Post »