Impending Oil Supply Shortages - Strat. Oil Res. |Updates

[Irag8er]

Here is a question. The SPR was created to ensure the US had in times of crisis sufficient oil reserves and capacity to keep the nation going.

Now that we’re a net exporter of oil doesn’t it follow that the US produces enough oil to to supply our needs.

So what is the purpose then of the SPR? It’s not to ensure the US has enough petroleum resources solely. I’m not arguing the SPR is not needed or needs abandoned.
I’m only pointing out the obvious that as a marker for energy security it does not fill the same roll it once did.
Today it is used more as a buffer for oil supply and price globally.

The issues with accessing necessary petroleum products is not with our oil and gas supplies availability but with refinement and transportation.

So while we’re all focusing on these shortages and prices how about we look at the real cause of the problem

What happens when "during a time of crises" our ability to produce oil is heavily damaged, or in fact destroyed?
Reliable SPR to fall back to.
Seems strategically important still.

 

[william]

What happens when "during a time of crises" our ability to produce oil is heavily damaged, or in fact destroyed?
Reliable SPR to fall back to.
Seems strategically important still.

If I were going to attack the US the SPR would be one of the first things I would hit. As far as I know the SPR storage is above ground and in need of maintenance due to neglect and age. Easy target.

Taking out the pacific fleets oil and gas storage at Peral Harbor was a failure of the Japanese in WWII and I'm sure the USs adversaries know that.

 

[Publius]

What happens when "during a time of crises" our ability to produce oil is heavily damaged, or in fact destroyed?
Reliable SPR to fall back to.
Seems strategically important still.

No disagreement, and I’m not arguing for them no longer being maintained.

I just brought it up to point out their strategic purpose is not what it once was.
The SPR was created in 1975 in response to the ME oil crisis and embargo’s.
We need a SPR at least at some level if for no other reason than redundancy.

However we need refining capacity more.
the US is operating at 94% capacity currently and that is with maintenance and downtime.
If we are going to continue to try and impact the price of fuel world wide. Which without export bans that is exactly what we’re doing.
Again not saying we shouldn’t. Or that we should implement export bans on specific products.

Only pointing out if we want petroleum reserves buffers we need to insure we have them on the refining capacity also.

Here’s a question, are we maintaining the right grade of oil types in our reserves.
Refineries are often built to refine a mix of heavy and light crude for a desired output.

Past inception our SPR has not been stocked with the optimal balance of light and sour crude to match the actual refineries we have built.
It currently has been stocked with sweet crude. So we export our SPR’s to nations who have refining capacity. While importing sour crude from Venezuela to match’s our gulf coast refineries.



All this said it’s a complex and dated system that isn’t optimized for today’s market or geopolitical concerns.
What good is a SPR if its stock doesn’t match our refining capabilities.

We are keen to import Venezuelan sour crude because it’s needed to optimize our gulf coast refineries. So we import heavy and export sweet crude.
One consequence of running at or near capacity in mixed crude plants it tends to limits the plant’s ability to significantly increase output levels for specific products.