Book Description

The mission of the Strategic Petroleum Reserve (SPR) is to protect the United States (U.S.) from severe petroleum supply interruptions through the acquisition, storage, distribution, and management of emergency petroleum stocks and to carry out U.S. obligations under the International Energy Program. The Long-Term Strategic Review (LTSR) provides an overview of the SPR and addresses key challenges that will impact the SPR’s ability to carry out its energy security mission. As expanding North American crude oil production has substantially reduced waterborne imports into the United States and changed the flow of petroleum, numerous questions have arisen about the future of the SPR. While the threat of physical supply disruptions to the United States has diminished, the country remains connected to the global oil market through the price mechanism and its economy remains vulnerable to supply disruption induced oil price shocks. Major topics examined in this report include the state of the SPR’s surface and subsurface infrastructure, bottlenecks in the North American midstream infrastructure that impact the SPR’s ability to move oil to the market, a discussion of some of the costs and benefits of SPR options, SPR modernization requirements for infrastructure life extension and the addition of dedicated marine terminals, and issues with the SPR’s authorizing legislation, the Energy Policy and Conservation Act (EPCA). These areas are evaluated with consideration given to the Bipartisan Budget Act of 2015 and the Fixing America’s Surface Transportation (FAST) Act, which mandate the sale of an estimated 124 million barrels (MMbbl) of the SPR’s crude oil inventory and authorize the funding of an SPR modernization program through the sale of up to an additional $2 billion worth of oil.