Getting Smart With the
Strategic Petroleum Reserve
American Spectator,
by
Scott McKay
Original Article
Posted By: Pluperfect,
3/19/2020 4:32:26 AM
With all of the Wuhan coronavirus panic monopolizing the news in the past week, something that has the potential to be a truly earth-shaking geopolitical event was largely missed.
President Trump announced Friday that he was ordering the Department of Energy to buy up some 77 million barrels of oil to fill the Strategic Petroleum Reserve, the massive store of crude oil the federal government has stashed in salt caverns along the Gulf Coast. The SPR’s capacity sits somewhere in the neighborhood of 713.5 million barrels; currently, it holds about 635 million barrels after Congress demanded last year that oil be sold off from the SPR.
Reply 1 - Posted by:
Urgent Fury 3/19/2020 4:44:22 AM (No. 350604)
Actually an interesting and somewhat upbeat article. The usual suspects are trying to kill American oil dominance, but Trump can fight them off if he can get past the RATS.
17 people like this.
Reply 2 - Posted by:
Wizard of is 3/19/2020 5:23:11 AM (No. 350606)
This article has something seriously wrong with it. The latest daily world oil production is in the area of 80 million barrels. Yet the article says there is 800 million barrels of daily “excess production.” It also says US strategic reserve purchases of less than 500k barrels will have a significant impact on world prices. This does not make any sense.
6 people like this.
Reply 3 - Posted by:
worried 3/19/2020 6:19:50 AM (No. 350628)
FTA: "...who would dearly love to knock the shale producers out of the game and then drive prices up over $100 a barrel to reap a windfall in money and political prestige".
How do you knock the shale oil producers out of the game if prices go that high? Won't they just start up producing again? It's not as if they had picked up their toys and took them to the landfill. Just biding their time until it becomes profitable to start production. Sometimes I wonder!
10 people like this.
Reply 4 - Posted by:
HisHandmaiden 3/19/2020 7:51:45 AM (No. 350694)
This part certainly makes sense:
“And if we’re talking about this as a campaign issue in the fall, with Joe Biden — who, let’s not forget, opposed the Alaskan oil pipeline as a young senator, long before he became senile and lost his mind — opposing it, then there’s real hope for us all.”
7 people like this.
Reply 5 - Posted by:
JackBurton 3/19/2020 8:41:05 AM (No. 350745)
I noticed that, too, #2. I only thought daily production of oil was in the 80-90 million barrels/day.
Rest of the article was good, though. But I hate to see when people can't handle the math. His numbers might have had a time period attached to them, like, monthly oil production surplus because he got them from production forecasts that used a time period like that.
Thru 2015, world oil production was inching upward to 80 million bbl/day. https://www.indexmundi.com/energy/?product=oil&graph=production
4 people like this.
This is nonsense. How about buying billions of dollars of those historic $100 hammers to stabilize the market? The government should buy BILLIONS of barrels. Think cheese and powdered milk filling warehouses for some national emergency AND to stabiize the price of dairy. That's what this is. There's no selling that cheese or milk on any market at any price because the market is already saturated and the government (read taxpayer) is holding the giant bag that supports prices. The real "solution" is to layoff the oil production end of the business until crude inventories are drawn down. Otherwise, it is pumping from a private hole, transporting and filling a government hole "in case of emergency" while writing checks for the privilege. The Strategic Reserves are outdated, a political stage prop. We have excess production capacity as it is - many wells drilled and NEVER TAPPED. Let's get our heads out of the 1970s. Go ahead all you investors out there...drill, baby drill!
3 people like this.
Reply 7 - Posted by:
bigfatslob 3/19/2020 9:51:58 AM (No. 350829)
Those Strategic Oil Reserves were for emergency war time usage in case the Saudis cut off the supply in the Middle East to us and others. That's old time history we really don't need it any more, being energy independent. It is a poor thought to think of hoarding more oil and the cost of doing it.
2 people like this.
Reply 8 - Posted by:
HotRod 3/19/2020 10:30:01 AM (No. 350880)
The Strategic Reserve is for emergency/wartime use. We are energy independent, but only for current and projected daily use. Emergencies and wartime are different from daily use. Eliminating the SR would be a mistake. It's like keeping enough food in your pantry until next payday, or enough to get through an emergency.
6 people like this.
Reply 9 - Posted by:
Foghorn 3/19/2020 11:34:15 AM (No. 350960)
Should Saudi Arabia and Russia make a deal to control oil In the middle east and Europe along with the Venezuela oil they will control 3/4 of the worlds oil. If Biden get elected and stops all oil production in the states we will be vulnerable. Russia and Saudi could cut off oil supply to the USA and we could not get planes in the air, run ships, or other machinery of war. Russia intends to control all oil outside the USA.
4 people like this.
Reply 10 - Posted by:
Proud Texan 3/19/2020 12:01:52 PM (No. 350998)
Getting rid of the SPR would be extremely stupid. 6 and 7 must be written by Joe Bidet. Even if you could turn on a faucet and start oil flowing from a well instantly, in a wartime situation the enemy is going to be taking out your infrastructure so it is a MUST to have oil close to the refinery.
As the author of the article mentioned, American producers are not "big" oil like liberals like to call them. Ours are small compared to other producers that are countries, not just companies. So many people seem to be able to hide this from themselves. Countries can take significant steps to knock out American oil and are doing so right now. I am building parts right now that go into plugs to shut off production in this country. In a few months we may be dependent on foreign oil again if American producers go broke - and it is happening NOW. It takes a lot of money to get that well flowing again.
It is in strategic interest of most of the world to keep us weak militarily just like the Democrats want. If we don't have oil - the fanciest fighters, best ship, and greatest soldiers in the world can not protect us.
Too many people just think about saving a few cents a gallon or a couple of bucks on a drug prescription and refuse to look at long term consequences and now the world is threatening to take out our fuel resources and let us do without drugs. An enemy would not have to do much to take us down if we let this happen. We won't be able to attack them without fuel and if a soldier skins a knuckle trying to do his job on the front lines, or here at home, he or she will die from infection because of no medicine.
Don't forget we don't mine for materials to build pretty much anything complete in this country because of "environmental" concerns. Heck, we can't even make our own underwear here.
Now, I have to get back to work to build parts to help shut off our country's oil production. After that, my company goes broke and I come after your job.
4 people like this.
Reply 11 - Posted by:
heartsurgeon 3/19/2020 1:10:42 PM (No. 351058)
Forgotten that bill clinton use the SPR like a piggy bank?
I hope Trump buys low and sells high, and does exactly what Clinton did...use the cash to fund the projects congress won't.
The Dems will howl, complain, claim it's "unprecidented!". Taste of their own medicine.
1 person likes this.
Reply 12 - Posted by:
zephyrgirl 3/19/2020 1:48:01 PM (No. 351101)
In the late 80s and early 90s, when oil was cheap, the SPR fill rate was filling at 20,000 barrels per day despite having filled at a much higher rate (i.e. 100-200,000 barrels per day) when oil prices were much higher. Much of what they've sold in the various drawdowns has been sold at a loss. That's the way with the SPR - buy high and sell low. Another dirty little secret of the SPR - Most refiners want sweet oil and there's little market for the nasty sour oil that was bought from Venezuela and Mexico to prop up corrupt governments during the Bush and Clinton administrations.
2 people like this.
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