US Strategic Petroleum Reserve

After the oil crisis in 1973, which brought the economies of the developed world to their knees, the US developed the Strategic Petroleum Reserve to fend off another blow. The reserve holds about 700 million barrels of crude which provides about 53 days of import protections. Needless to say in a time of real crisis these supplies could be used to keep emergency services running for quite some time.

The reserve has been in the news quite a bit in the last 4-5 years. Every time oil prices spike there is a call to reduce them by tapping the reserve. The Clinton administration yielded these calls in 2000 and released oil from the reserve, in what appeared to also be a political move ahead of the presidential election.

I am in 100% agreement with the Bush administration on their refusal to tap the reserve last year even though there were some strong calls for it, especially from the Democrats. Here is the Bush administration stance on the issue.

"We've always said the Strategic Petroleum Reserve was set up to protect against physical disruptions of oil supplies such as national emergencies or natural disasters, and not to manipulate prices or for political purposes..."

Bravo!


Update: And the oil is going to flow. It seems up to 2 million barrels of oil will be loaned to major oil companies in the wake of huricane Ivan.

http://news.yahoo.com/news?tmpl=story&u=/nm/20040924/bs_nm/energy_conoco_alliance_dc


References:
1. The US Strategic Petroleum Reserve
http://www.fe.doe.gov/programs/reserves/index.html

1. U.S. Weighs Borrowing Oil From Stockpile - Tom Raum (AP)
http://news.yahoo.com/news?tmpl=story&u=/ap/20040923/ap_on_go_pr_wh/oil_reserve_3

3. US taps oil reserve - BBC News (2000)
http://news.bbc.co.uk/1/hi/world/americas/938146.stm
Note: BBC wrongly states that the capacity of the reserve is 1 billion barrels.