Explainer: What is the strategic petroleum reserve?
President Biden announced Thursday that his administration would release about 180 million barrels of oil from the Strategic Petroleum Reserve (SPR) in order to alleviate the economic strain of gas prices that have soared as a result of inflation and the Russian invasion of Ukraine.
Oil will be released from the SPR at a rate of 1 million barrels per day for six months, a move the administration characterized as the largest ever in the reserve’s history.
“This is a wartime bridge to increase oil supply until production ramps up later this year. And it is by far the largest release from our national reserve in our history,” Biden said in his announcement. “It will provide a historic amount of supply for a historic amount of time — a six-month bridge to the fall.”
In all, the effort by the administration is expected to result in a modest drop in gas prices — about 10 to 20 cents per gallon.
But what is an SPR? The Hill breaks down the oil reserve origin story here:
Crude oil for an emergency
The SPR was constructed and developed to store up to 714 million barrels of crude oil for emergency use, according to the Energy Department.
It was created in the 1970s in response to the oil shocks.
At the time, Arab state members of the Organization of the Petroleum Exporting Countries cut production to protest the United States’ support of Israel in the Yom Kippur War, according to Yale University.
The reserves were constructed in four areas that line the Gulf Coast: Bryan Mound, Texas; Big Hill, Texas; West Hackberry, La.; and Bayou Choctaw, La.
The oil barrels are stored underground in salt caverns because the environment provides the best protection for the fuel and is the most cost effective way to store it, according to the Energy Department.
The reserves have a total of 60 caverns, each of which has a size of 200 feet in diameter and 2,500 feet in height. The caverns have a large capacity and can hold between 6 million and 27 million barrels of crude oil.
The locations were picked due to the ease of connecting the oil to the commercial oil transport network in the country.
When is it used, and who gets to release it?
The U.S. taps into its reserves for emergency situations such as when hurricanes hit the U.S. or when significant disruptions to the supply chain occur.
The stockpile of oil is controlled by the Department of Energy and directed by the president for releases.
The Department of Energy has spent around $25.7 billion on the reserves, with $20.7 billion going toward crude oil and $5 billion going to the facilities.
Prior to Biden’s announcement this week, the U.S. released 30 million barrels of oil in March from the reserves.
How could the release effect Biden and Democrats?
The rapid rise in oil prices has negatively impacted the president’s approval ratings. The pain for Americans at the gas pump has also thrown up another obstacle for Democratic lawmakers who are up for reelection in the 2022 midterms.
Republicans, for their part, have attacked Biden and his party for the rise in gas prices.
Biden has pointed to oil companies for the rise, but many Americans view the increase as a result of president’s policies. A recent poll found 41 percent of Americans believe Biden’s economic policies are the reason behind the high fuel costs.
If the oil reserve release does result in a price drop, the move could be a political win for Biden and Democrats going into the fall.
“Between ramping up production in the short term and driving down demand in the long term, we can free ourselves from our dependence on imported oil from across the world,” Biden said this week.