There’s been a lot of fanfare about the Strategic Petroleum Reserve and how there’s an operational minimum of 300 million barrels since US recently crossed that line, but the problem with that thinking is that there’s simply no evidence that this oil floor exists. The DOE is, after all, planning on releasing 133 million barrels from a pre-war inventory of 415 million barrels would leave it below 300 million, and would not do so if the operational floor was 300 million (yes, even the Trump administration isn’t this reckless). In fact, a 2016 report from the DOE states that the SPR system would only hit an operational floor at around 70 million barrels. This is a far cry from the 300 million frequently cited.
The 300 million barrel limit instead might’ve come from a different issue, in that the maximum drawdown rate decreases as it crosses 300 million, meaning the ability to weather more severe shocks is hindered. However, this isn’t a problem given that the highest drawdown thus far has been 1.4 million barrels per day, which is still well below the 4.1 million barrels per day at the 300 million mark.
There are other points of contention such as cavern integrity but these technical issues largely don’t affect the current release of the SPR, and are more long term challenges rather than short term constraints.
iamagainstit on
infinite petroleum reserve because as the markets say, only good happen.
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There’s been a lot of fanfare about the Strategic Petroleum Reserve and how there’s an operational minimum of 300 million barrels since US recently crossed that line, but the problem with that thinking is that there’s simply no evidence that this oil floor exists. The DOE is, after all, planning on releasing 133 million barrels from a pre-war inventory of 415 million barrels would leave it below 300 million, and would not do so if the operational floor was 300 million (yes, even the Trump administration isn’t this reckless). In fact, a 2016 report from the DOE states that the SPR system would only hit an operational floor at around 70 million barrels. This is a far cry from the 300 million frequently cited.
The 300 million barrel limit instead might’ve come from a different issue, in that the maximum drawdown rate decreases as it crosses 300 million, meaning the ability to weather more severe shocks is hindered. However, this isn’t a problem given that the highest drawdown thus far has been 1.4 million barrels per day, which is still well below the 4.1 million barrels per day at the 300 million mark.
There are other points of contention such as cavern integrity but these technical issues largely don’t affect the current release of the SPR, and are more long term challenges rather than short term constraints.
infinite petroleum reserve because as the markets say, only good happen.