ABSTRACT

Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy [April 25, 2012]   [open pdf - 427KB]

"Congress authorized the Strategic Petroleum Reserve (SPR) in the Energy Policy and Conservation Act (EPCA) of 1975 to help prevent a repetition of the economic disruption caused by the 1973-1974 Arab oil embargo. EPCA specifically authorizes the President to draw down the SPR upon a finding that there is a 'severe energy supply interruption.' The meaning of a 'severe energy supply interruption' has been controversial. The authors of EPCA intended the SPR only to ameliorate discernible physical shortages of crude oil. Historically, increasing crude oil prices typically signal market concerns for supply availability. However, Congress deliberately kept price trigger considerations out of the President's SPR drawdown authority because of the question about what price level should trigger a drawdown, and the concern that a price threshold could influence market behavior and industry inventory practices. As a member of the International Energy Agency-a coalition of 28 countries-the United States agrees to support energy supply security through energy policy cooperation, commit to maintaining emergency reserves equal to 90 days of net petroleum oil imports, develop programs for demand restraint in the event of emergencies, and participate in allocation of oil deliveries among the signatory nations to balance a shortage. […] The 30.64 million barrel SPR sale in 2011 reduced the SPR's inventory from 726.6 million barrels to 695.9 million barrels. The SPR currently holds the equivalent of 80 days of import protection (based on 2012 data of 8.72 million barrels per day of net petroleum imports)."

Report Number:
CRS Report for Congress, R42460
Author:
Publisher:
Date:
2012-04-25
Series:
Copyright:
Public Domain
Retrieved From:
Via E-mail
Format:
pdf
Media Type:
application/pdf
URL:
Help with citations