WASHINGTON — At the direction of President Joe Biden, Secretary of Energy Jennifer Granholm has authorized the release of 50 million barrels of crude oil from the U.S. Department of Energy’s (DOE) Strategic Petroleum Reserve (SPR). This decision is in response to the highest oil prices experienced in seven years and aims to ensure adequate supply and to lower pump prices as the nation comes out of the pandemic, the president said.
The release creates a bridge from today’s high-price environment to a period of lower prices and automatically provides for the restocking of the SPR over time, according to the DOE.
The SPR is the world's largest supply of emergency crude oil, and the federally owned oil stocks are stored in underground salt caverns at four storage sites in Texas and Louisiana.
“As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price,” Granholm said. “This action underscores the president’s commitment to using the tools available to bring down costs for working families and to continue our economic recovery.”
The DOE will make available releases of 50 million barrels from the Strategic Petroleum Reserve in two ways: 32 million barrels will be an exchange over the next several months, releasing oil that will return to the SPR in 2022, 2023 and 2024, and 18 million barrels will be the accelerated sale of oil that Congress had previously authorized.
The exchange will be conducted with crude oil from all four SPR storage sites, including approximately:
- 10 million barrels from Big Hill, Texas.
- 10 million barrels from Bryan Mound, Texas.
- 7 million barrels from West Hackberry, La.
- 5 million barrels from Bayou Choctaw, La.
The DOE will award contracts by Dec. 14, with deliveries January through April 2022, with early deliveries in late December. Companies that receive SPR crude oil through the exchange agree to return the amount of crude oil received, as well as an additional amount that depends on how long they hold the oil.
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