In dozens of underground salt caverns nestled along the Gulf Coast in Texas and Louisiana sit hundreds of millions of barrels of crude oil, America’s “insurance policy” against the volatile nature of the global oil market. An interesting article from Fortune. Link to full article below.
Called the Strategic Petroleum Reserve, or SPR, it is the world’s largest emergency oil supply, and dates back to the 1970s, when it was created to ensure the U.S.’s future energy independence following the Arab oil embargo.
At that time, America was dependent on foreign oil, and the embargo led to an energy crisis that rippled across the U.S. economy and culture, leading to winding lines at gas stations, skyrocketing prices, and calls from then-President Richard Nixon to abstain from driving on Sundays and putting up holiday lights to preserve fuel. The SPR was established to avoid this happening again.
As of now, the SPR holds just over 369 million barrels, the lowest level since the early 1980s and a little more than half of the amount it held during its peak, in 2010–2011. That’s due to the sales of hundreds of millions of barrels authorized by President Joe Biden to try to lower gas prices throughout 2022, after Russia invaded Ukraine and gas prices spiked above $5 per gallon.
Biden hoped more supply would lead to lower prices at the pump, which worked then (though to what degree is debatable). Now that prices have more or less leveled off, the U.S. Department of Energy is slowly replacing the stockpile, recently buying 3 million barrels to add to the supply.
Full story Biden sold off nearly 50% of the Strategic Petroleum Reserve. Is that a problem? | Fortune
Share this:
