If you’re old enough to recall avocado-colored refrigerators and brown shag carpeting as non-ironic home decor, you might remember long lines at the gas pumps.
What was known in the mid-1970s as the Arab oil embargo left Americans feeling not just angry but vulnerable. The most powerful country in the free world, brought to its knees.
That’s when Congress decided the U.S. needed a reserve tank – literally. The Strategic Petroleum Reserve was created as an emergency reserve to keep the country out of dire straits, but 40 years later, with an oil glut and millions spent to maintain the reserve some are suggesting we’re in a dire glut instead.
Osborne says the reserve fuel is stored in old salt caverns that have been repurposed for oil storage.
“At current count, it holds about 700 million barrels,” he says, “which is enough to keep the country going for about five months or so.”
Keeping the oil stored is the easy part – moving it around the country should we face another oil shortage would be the hard part.
“Right now, the system has sort of fallen into disrepair and also, dynamics of the oil market has shifted with the U.S.,” he says. “The Department of Energy really isn’t sure it can get this all to market as quickly as would be needed.”
Some in the Obama administration are suggesting shrinking the oil reserve to a three-month level, which is getting support in Congress.
“Of course, shrinking that reserve will mean a lot of revenue for the government,” he says. “That’s a big concern for congressmen and senators in resource-rich regions like Texas – they don’t want the government to do something that would theoretically hurt the companies that operate in their areas.”
Sales that Congress has authorized are scheduled to begin next year, but a Houston-area Congressman suggested that the government wait for prices to rebound, Osbourne says. A report due to be released in the next few weeks, Osbourne says, will bring the issue to the Congressional floor.
“Right now all signs are pointing to (the fact that) this reserve is going to shrink down,” he says.
Post prepared by Hannah McBride.