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What—and Where—Is the Strategic Petroleum Reserve?

By Brendan I. KoernerPosted Wednesday, May 14, 2008, at 10:44 AM ET

A worker moves canisters of liquified petrolum gas (LPG) tanks. Click image to expand.Congress voted Tuesday to halt deposits into the Strategic Petroleum Reserve. Unless the bill is vetoed, the Bush administration will stop diverting 70,000 barrels of oil per day from the commercial market. The president did consider opening the reserve in 2002 to combat soaring oil prices. At the time, Brendan I. Koerner explained where the government keeps that oil and what it's for. The full article is reprinted below.

Political tumult in Venezuela, which has sent oil prices soaring, has President Bush pondering whether to tap into our nation's Strategic Petroleum Reserve, which houses around 560 million barrels of crude. Where's all that black gold stored, and what will it take to turn on the spigots?

The SPR is stockpiled at four locations around the Gulf of Mexico, all within shouting distance of major refineries: Bryan Mound and Bill Hill in Texas, and West Hackberry and Bayou Choctaw in neighboring Louisiana. The oil is kept in subterranean salt caverns, where the temperature's just right to maintain the perfect amount of viscosity, and the air pressure prevents the creation of fissures that could cause leakage. It's also cheaper than using aboveground storage tanks by about a factor of 10. And, of course, a salt cavern 2,000 feet below the earth's surface is a harder target for terrorists to attack.

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The SPR was created was created in 1975 as part of the Energy Policy and Conservation Act, largely in response to the OPEC oil embargo of 1973-74. Much of the present-day stockpile is given to the government by companies who prospect for petroleum on federal land as a royalty in lieu of cash. Should things get hairy, energy-wise, due to international conflict or some other catastrophe, the president alone has the authority to order a "drawdown" of the reserve, at an estimated rate of 4.1 million barrels per day. Once the president gives the go-ahead order, though, it would take at least 15 days for the SPR crude to hit the market.

The last significant dip into the SPR occurred during Desert Storm, when Bush the Elder ordered a drawdown of 34 million barrels. There have been minor dips into the kitty since then, such as in June of 2000 when the SPR "loaned" 500,000 barrels each to CITGO and Conoco, which were having problems with their tanker fleets. Later that same year, the SPR made 2.8 million barrels of crude available in anticipation of a harsh Northeast winter.

Bonus Explainer: Not all SPR oil is created equal. About a third of the stockpile qualifies as "sweet" crude, meaning that its sulfur content is less than one-half of 1 percent. The rest is more sulfur-laden "sour" crude. Sweet crude is more desirable among refinery pooh-bahs, but when we're in a bind that might require tapping the SPR, beggars can't be choosers.

Got a question about today's news? Ask the Explainer.

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Brendan I. Koerner is a contributing editor at Wired and a columnist for Gizmodo. His first book, Now the Hell Will Start, is out now.
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