Regarded as the largest strategic oil reserve in the world, the USPR has now touched a four-decade low, falling below 300 million barrel for the first time since 1980 according to data released by Department of Energy.
The depletion and rapid release of oil stockpiles to mitigate Iran war woes is threatening to damage the caverns that the oil is stored in, CNBC cited experts as saying.
The oil in the Strategic Petroleum Reserve (SPR) is stored at 60 salt caverns thousands of feet underground at four major sites along the Gulf Coast in Louisiana and Texas, and damage to the caverns can make to handing future energy emergencies more difficult, the experts underscored.
There are conflicting views surrounding what a safe level is for these caverns. To paint a picture, oil inventories are depleting as the United States releases as 172 million barrels to tackle the supply disruption caused by the Iran war.
Once the drawdown is done, the inventories will contain around 243 million barrels. Now, the Department of Energy claimed that at least 70 million barrels must remain in the reserve to safely manage the caverns.
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However, the claim was refuted by senior energy advisor to former President Joe Biden, Amos Hochstein, who earlier this week said if the caverns touch 70 million barrels they cannot be revived again.
“Don't believe the people out of the government that are saying the SPR can go to 70 million barrels. It's nonsense,” Hochstein told CNBC. At that level, the reserve would be depleted to "the point of never resurrecting it," he highlighted.
Ben Dietderich, spokesperson for the US Energy Department, countered the claims that SPR's storage caverns are nearing collapse, labelling them as false.
“The caverns are always full. All that changes is the ratio of oil and water that is filling them,” CNBC quoted Dietderich as saying. According to the spokesperson, The Trump administration is "responsibly managing the SPR as the critical national security asset it was designed to be."
Experts' Take
Oil is released to the pipelines from the SPR after water is pumped into the bottom of the caverns, displacing the crude to the surface.
To keep the extraction pipe safely submerged under oil rather than water, it requires a strict physical minimum quota of seventy million barrels of crude at the top of the cavern, CNBC cited Siddharth Misra, a petroleum engineering professor at Texas A&M University as saying.
Although, he Misra further explained that “the practical operational floor for the crude inventory is between 250 million and 300 million barrels, adding at current inventory levels, “cavern integrity and overall operational capability are at an elevated risk."
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