alt Hacker NewsThings are really about to hit the fan. The world has been surviving off of strategic petroleum reserves, but those are quickly hitting the bottom. The US last reported at 285M barrels[0]. There is a legal floor of ~250M, after which it is reserved for government national defense. Usage has been all over the place, but the drawdown has been somewhere in the region of 1M barrels per day. Public analyses have said that the cavern integrity becomes threatened once levels fall below 300M. Current government claims the "real" floor is at 70M, but I believe this is a transparent ploy to assuage markets.
The Saudi pipeline that was attacked had a capacity of 7M barrels per day. Gone for who knows how long. That 7MBPD that needs to come from somewhere.
Edit: Should add - the big tankers require ~month to move oil to most consumers. So, there is one month of breathing room before the new pipeline loss materializes.
[0] https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W...
Replies
> The Saudi pipeline that was attacked had a capacity of 7M barrels per day. Gone for who knows how long. That 7MBPD that needs to come from somewhere.
it probably depends on what exactly happened to the pipeline, but normally i'd expect this to be a short term disruption, as replacing a small segment isn't really that hard.
The real question is will it be struck over and over again.
What a great time to start a trade war with the largest oil exporter. Think there is a shortage now? Just think what happens when canada turns off the taps. Even the threat could trigger covid-style hoarding.
Trump will 100% ignore the defense reserve. Congress won't stop him either.
> There is a legal floor of ~250M, after which it is reserved for government national defense.
There is no "government national defense floor". As far as I can tell, this originates from someone misreading the SPR drawdown laws and then a bunch of people parroting it. The ~250M "floor" (really 252.4M) only applies for SPR drawdowns that aren't required by a severe energy supply interruption or to meet US obligations under the international energy program. Deciding what qualifies as a "severe energy supply interruption" is left up to the president. Essentially there's nothing stopping the president from emptying the reserve entirely. See sections d and h here: https://uscode.house.gov/view.xhtml?req=(title%3A42+section%...
> Public analyses have said that the cavern integrity becomes threatened once levels fall below 300M.
This isn't how the SPR works. They withdraw oil from it by pumping in water (oil floats on water, so the oil goes to the top). This means that the caverns won't cave in or something if there's too little oil, since they'll have the same volume inside them. What does wear out the SPR is drawing down at all, since the water erodes the caverns. The problem is cumulative, not caused by levels going below a certain point. There's a good article that goes over how the SPR works and its current status here if you're interested: https://files.gao.gov/reports/GAO-26-106918/index.html