In his inaugural address, President Donald Trump pledged to "fill our strategic reserves up again right to the top," a promise that has yet to be fulfilled through executive orders.
Instead, the task of replenishing the nation's energy stockpile, known as the Strategic Petroleum Reserve (SPR), falls to Trump's Energy Secretary, Chris Wright. Wright is seeking up to $20 billion from Congress for this endeavor, a process he acknowledges will take years but will restore the SPR to near capacity.
According to Just The News, Wright, during a tour of a natural-gas export plant in Louisiana, expressed his commitment to restoring the SPR to "just close to the top." The SPR has been significantly depleted under the administration of former President Joe Biden, who used the reserve more than any of his predecessors, often for political reasons. Experts warn that the frequent depletion and refilling of the SPR may be jeopardizing its structural integrity.
The SPR was established in the wake of the 1973 OPEC oil embargo against the United States, which precipitated an energy crisis and a historic recession. President Gerald Ford signed the Energy Policy and Conservation Act of 1975, creating the SPR as a safeguard against future supply disruptions. The reserve, consisting of crude oil stored in 62 salt caverns, has been tapped for various reasons over the years, including exchange agreements that function like loans.
Presidents have often used the SPR to mitigate high oil prices, particularly during election seasons. Biden, for instance, tapped the reserve more than any other president as a means of controlling prices. In June 2022, following Russia's invasion of Ukraine, the average retail price of gasoline in the U.S. was nearly $4.30 per gallon. With the midterms looming, Biden began draining the SPR in an attempt to lower these prices.
When Biden assumed office in January 2021, the SPR held over 638 million barrels of oil, as per the U.S. Energy Information Administration (EIA). By June 2023, this figure had dropped to nearly 347 million barrels. The SPR currently holds 395 million barrels.
Former Energy Secretary Jennifer Granholm announced in March of last year that the SPR would be refilled by the end of the year. This ambitious claim was followed by a series of Department of Energy announcements on oil purchases in the subsequent months. By November, the Department of Energy claimed to have added 20 million more barrels than the 180 million barrels sold under Bidens 2022 emergency declaration following Russia's invasion of Ukraine. However, the Department had only purchased 59 million barrels.
Granholm's Department of Energy added another 140 million barrels set for release to this total. But these sales were canceled in collaboration with Congress. It seems that Granholm's claim of refilling the SPR by the end of 2024 was based on the assumption that the combined canceled sales and purchases would exceed the 180 million barrels sold under Biden's emergency declaration.
David Blackmon, an energy analyst who publishes his work on his Energy Absurdities Substack, told Just the News that the frequent depletion and refilling of the SPR could threaten the structural integrity of the salt caverns where the oil is stored. If presidents continue to use the SPR for political purposes, Blackmon warned, it could become a significant problem.
Salt domes are ideal for storage because they don't react with the oil and are self-healing. Originally intended for 25 years of use, these storage sites were once estimated to have a total capacity of 727 million barrels. However, constant geological pressure and repeated drawdowns cause the caverns to deform. The American Association of Petroleum Geologists (AAPG) estimates that the caverns shrink by 2 million barrels per year, but the actual shrinkage could be even greater.
Trump's Department of Energy, under Secretary Wright, will have to strike a delicate balance between restoring the SPR to its pre-Biden level and maintaining stable oil prices. Robert Rapier, a chemical engineer and editor-in-chief of Shale Magazine, told Just the News that passing legislation for the purchases should not be an issue. However, he cautioned that the refill process would have to be gradual to avoid putting upward pressure on prices.
As the former CEO of oil and gas company Liberty Energy, Secretary Wright is likely cognizant of these economic implications. This awareness may explain his assertion that the refill process will take years. Once the SPR is replenished, it remains to be seen whether future administrations will refrain from tapping it, except in cases of national emergencies.
Login