On Sunday, as I pumped $50 into my Jeep’s modest 15-gallon tank, my thoughts turned to President Biden. If you recall (since he possibly doesn’t), Biden decided to tap into our Strategic Petroleum Reserve (SPR) to manage gas prices before the midterm elections, vowing to refill the reserves once prices lowered. However, an expert suggests that the SPR may never be replenished, and not necessarily for the reasons you might initially consider.
The SPR, established under President Gerald Ford in 1975 after the 1973-1974 Arab oil embargo, was designed to house enough crude oil (714 million barrels) to buffer us from future embargos. Although it was never substantial enough to achieve this for an extended period, the SPR fortified our geopolitical position against oil-rich nations like Iran and Russia.
Filling the SPR to capacity took around 35 years, up until 2010. In just two years, Biden has depleted our reserves to half, a level unseen since 1983, ostensibly to gain electoral advantages. As Julianne Geiger warned at OilPrice on Tuesday (credit to Zero Hedge for the tip), replenishing the SPR could take decades if it happens at all.
This assumes prices fall enough to justify refilling and that the salt caverns used for storage can endure the process. My suspicion was that the Biden administration never truly intended to replenish the SPR. Their primary concern seems to be the upcoming election, and if jeopardizing our economic security can secure them a few more seats in the House or Senate for a couple of years, it seems they would consider it a small price to pay.
Geiger’s note on the “issue of infrastructure and feasibility of filling, withdrawing, refilling, etc. of the SPR” was a revelation. Therefore, even if the Biden administration were willing to risk escalating gas prices by adding more crude to SPR storage (which is unlikely), they would need to consider the aging facilities (which they likely won’t) and plan for replacements (which their environmentally focused allies would probably oppose).
She continued:
Those salt caverns are made of… well, salt, and according to SPR former project manager William Gibson, who spoke to Bloomberg, they were built—in the ‘70s—with the idea that they would last 25 years. They were also designed to be withdrawn and refilled just five times, lest the salt caverns simply dissolve.
As one former official put it, the caverns were “not really intended for daily ATM-type operations.”
To summarize, if changes in the geopolitical landscape or our domestic oil production increased our reliance on foreign oil, we would be left with an SPR buffer only as large as it was in 1983. In 1983, our oil requirements were less substantial, and we were prudently augmenting the SPR rather than imprudently draining it as if it were the Democrats’ personal savings. Usually, I can find humor or indifference towards the shortsighted, damaging, vindictive, petty, and clumsy actions of the Biden White House, but today they have incited my ire.
