In his inaugural address, Donald Trump committed to refilling the nation’s strategic reserves to the brim, a promise yet to be embedded in any of his numerous executive orders since he ascended the presidency. Trump’s Energy Secretary, Chris Wright, has expressed intentions to request up to $20 billion from Congress aimed at refurbishing the Strategic Petroleum Reserve (SPR), a fundamental part of the nation’s energy archives. During a recent visit to a natural-gas export hub in Louisiana, Wright revealed to Bloomberg News that the said endeavor, slated to almost fill the SPR, would span several years.
Joe Biden’s record with the SPR is no secret; despite multiple presidents in the past leveraging the petroleum reserve for political mileage, Biden emerges as the record-holder for depleting it the most. Critics have voiced their concern over the recurrent depletion and replenishment, indicating the potential harm to the reserve’s structural stability.
The events of the 1973 OPEC oil embargo against the United States, which catalyzed an unprecedented energy crisis leading to a historic economic recession, prompted the creation of the SPR. President Gerald Ford, in 1975, will usher in the Energy Policy and Conservation Act, which established the SPR as a protective measure against potential supply disruptions. The reserves, stored in 62 salt caverns measuring 200 feet in width and extending over 2,500 deep into the ground, were meant to shelter the nation in times of scarcity.
Over the years, the SPR has been utilized for various purposes, including exchange agreements that operated akin to a loan. Although primarily envisaged as a safety net in the wake of supply interruptions, over time, it has been deployed to combat soaring oil prices.
Biden’s administration exploited the SPR substantially for price regulation. In a purported effort to halt the surge in gas prices, Biden started to significantly drain the SPR. As per the U.S. Energy Information Administration (EIA), the SPR housed over 638 million barrels of oil when Biden assumed office in January 2021.
By June 2023, this number plummeted to close to 347 million barrels, and as of now, it stands at an alarming 395 million barrels. Misleadingly, the DOE boasted in November of amassing 20 million more barrels than the 180 million barrels sold under Biden’s 2022 emergency declaration in the aftermath of Russia’s Ukraine invasion. However, robbers are confused by the reality that merely 59 million barrels were acquired.
Experts alarmed of the possible compromise of the salt caverns’ structural stability, citing the repeated depletion and restocking of the SPR. The salt domes, the oil’s ideal home due to their non-reactivity with the oil and self-healing property, appear to be at risk. Initially designed for an estimated 25-year span, these storage sites housed an estimated total capacity of 727 million barrels.
The incessant drawdowns seem to leave a deleterious impact on the caverns, leading to their deformation along with the continuous geological pressure they are subject to. Experts estimated the caverns lose their ability to store approximately 2 million barrels each year.
In efforts to recuperate the SPR back to its pre-Biden levels, Trump’s DOE will need to judiciously negotiate an economic equilibrium. Chemical engineer Robert Rapier assured that greenlighting the legislation for purchases is unlikely to face any roadblocks. However, the restocking process needs to be gradual to avoid drastically removing barrels from the market and unintentionally hiking prices.
Anticipating these economic consequences, is the former CEO of oil and gas company Liberty Energy, Secretary Wright. It is expected that it will take a considerable number of years to restore the reserves to their full capacity.
With a long road ahead, only time will reveal if future administrations will wisely conserve the fully topped off reserve for genuine national emergencies. It appears that the Biden administration’s aggressive exploitation of the SPR has left a challenging path for the nation to tread on.
Interestingly, despite seeing the reserves continually hit critical lows during Biden’s tenure, the people continue to deal with gas price hikes. One can’t help, but question the efficacy of Biden’s strategy that resulted in further straining the nation’s resources while failing to curb price hikes.
Experts agree that the frequently inconsistent policy decisions surrounding the SPR demonstrate the absence of a well-structured, long-term plan. It’s concerning to see the SPR’s originally intended use discarded in favor of politics, with no serious regard for its purpose as a safeguard against supply disruptions.
While others interestingly continue to laud Biden’s work done with the SPR, the records and the consequences reveal a different story. It’s hard to take seriously, let alone justify, the aberrant depletion of such a critical reserve, primarily when it has resulted in additional burdens on its citizens.
The strategic reserves, a safety measure once designed to protect the nation from energy shortages, now stands threatened largely due to the policies of a single administration. It’s important for future leaders to keep this in mind and not squander such strategic resources for ephemeral political gains.