On Friday it was announced that the US Government would take this opportunity to buy oil on the open market and fill the SPR (Strategic Petroleum Reserve) …
With our venue here being Informational and Educational, we set off the find more about the SPR.
Strategic Petroleum Reserves (SPR)
With tons of friends and clients in the Energy Sector (likely forgotten more than we will ever know) we hope to get at least one point that you guys do not know … for the rest of us, it is likely most of these may be new as they were to us.
For those as interested (nerdie) as us, here is where the bulk of our information came from.
How Much is in the SPR Now?
How much can it hold?
Current authorized storage capacity – 713.5 million barrels… so almost 100 million barrels to be added…
Where are the locations (Big Underground Caverns)?
Crude Oil Storage by Site (as of January 31, 2020)
- Bryan Mound – holds 230.2 MMB in 20 caverns – 66.7 MMB sweet and 164.0 MMB sour.
- Big Hill – holds 143.3 MMB in 14 caverns – 62.5 MMB sweet and 81.2 MMB sour.
- West Hackberry – holds 189.7 MMB in 22 caverns – 102.2 MMB sweet and 87.5 MMB sour.
- Bayou Choctaw – holds 71.8 MMB in 6 caverns – 18.9 MMB sweet and 51.8 MMB sour.
Why do we have a SPR?
Established in the aftermath of the 1973-74 oil embargo, the SPR was established to counter a disruption in commercial oil supplies which could threaten the U.S. economy. It is also the critical component for the United States to meet its International Energy Agency obligation to maintain emergency oil stocks.
How do you get Oil Out of the SPR? (Neat Fact!)
The fact that oil floats on water is the underlying mechanism used to move oil in and out of the SPR caverns. To withdraw crude oil, fresh water is pumped into the bottom of a cavern. The water displaces the crude oil to the surface. After the oil is removed from the SPR caverns, pipelines send it to various terminals and refineries around the nation.
There you have it, a neat overview …. for those interested, this is just the tip of the SPR Iceberg, as there is a ton of really neat and more thorough information on the link at the beginning of this post and again here…
Have a Great “SPR Informed” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth