The Statutory Authority for an SPR Drawdown outlines the EPCA requirements for an authorized sale and drawdown. The Department may initiate a sale to respond to a severe energy supply interruption, to prevent or address lesser supply shortages or to conduct evaluations of drawdown and sales procedures. DOE sells SPR oil in a competitive auction to the highest bidder. Of course, if for some reason we had a true supply emergency and found ourselves needing that oil, it would be looked upon as a terrible decision.Section 161 of the Energy Policy and Conservation Act (EPCA) gives authority to the President under specified conditions to direct the Secretary of Energy to conduct a public sale of oil from the Strategic Petroleum Reserve. President Biden’s gamble to deplete the SPR in order to fight high oil prices may not hurt him at all. President Biden has announced steps to replenish the SPR, “likely after FY2023”, and in my opinion most likely after the 2024 elections. President Trump drew down about 10% of the SPR during his term. Presidents Clinton and Obama both used the SPR to try to ease high gasoline prices around election time, while Republican presidents (until Donald Trump) added to the SPR. Historically SPR volumes tended to grow during Republican administrations and to fall during Democratic administrations. This depletion is consistent with recent history.

The SPR has now been depleted since President Biden took office from 640 million barrels to 450 million barrels. So, they try to tame gasoline prices even though it contradicts one of their key objectives of reducing carbon emissions. An administration that has frequently emphasized the importance of reducing carbon emissions is trying to increase oil supplies to bring down rising oil prices - which will in turn help keep demand (and carbon emissions) high.īut even though the Biden Administration wants to address rising carbon emissions, high gasoline prices cause incumbents to lose elections. Ultimately, drawing down the SPR was a political decision. “supply” (which isn’t sustainable, because it relies on depleting the SPR) back up to the all-time pre-Covid high of 13 million BPD. producing 12 million BPD, an extra one million BPD pushes total U.S. That’s a lot.” In fact, I noted in interviews at the time that this level of release would likely help stem oil prices - at the risk of depleting our insurance policy in case of a supply disruption.Ĭonsider that with the U.S. I remember when I first heard about it, I thought “Wow. On Main an attempt to fight higher oil and gasoline prices - President Biden announced the release of one million barrels of crude oil a day for six months from the SPR. Thus, one could certainly argue that the SPR is of less strategic importance than it once was, and that perhaps we no longer need a 700 million barrel reserve of oil. crude oil and finished products were actually -62,000 BPD (i.e., the U.S. More importantly, a lot of that imported oil was refined and re-exported as finished products. imported 6.1 million BPD, of which only 800,000 BPD came from OPEC.

Spr drawdown chart