The U.S. Energy Department is seeking comment by June 13 on seven questions regarding the long-term need and policies for the Strategic Petroleum Reserve.
It will use the comments in preparing an administration policy statement on the SPR, which is to be released in September.
DOE is asking:
- If the U.S. should continue to maintain the SPR.
- What size and composition the oil inventory should be.
- How the oil should be distributed in a drawdown.
- What the drawdown capability should be.
- Whether SPR oil should be sold to raise revenues for the government.
- Whether the SPR facilities should be available for alternative uses.
- If the SPR should be used to raise funds through alternative financing, innovative financial instruments, or buying and selling inventory.
SPR background
The U.S. established the SPR in 1975, following the 1973 Arab oil embargo. Inventories climbed to 592 million bbl by 1994, but 28 million bbl have been sold since early last year to raise revenues, leaving a current inventory of 564 million bbl.
The U.S. investment in the SPR currently totals more than $20 billion, of which $17 billion was spent to acquire oil.
The current SPR inventory equals 67 days of net oil imports, and the U.S. relies on combined SPR and private stocks to meet its International Energy Agency oil storage obligations. The oil is stored in salt dome caverns along the Texas and Louisiana Gulf Coast.
DOE also plans to release a report in a few weeks on the feasibility of creating regional reserves of heating oil.
This report was prompted by public concern last year over low heating oil stocks, although no shortage developed.
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