The U.S. Strategic Petroleum Reserve has fallen below 300 million barrels for the first time since it was filled in the early 1980s, and experts warn the rapid drawdown could damage the salt caverns that store the oil. The Energy Department disputes that the reserve's storage caverns are at risk.
The Strategic Petroleum Reserve has tumbled below 300 million barrels for the first time since it was filled in the early 1980s, according to Department of Energy data released Monday. The reserve is depleting as the U.S. releases 172 million barrels in response to the supply disruption caused by the Iran war, and the SPR will sit at around 243 million barrels once the drawdown finishes.
Experts now warn the caverns that hold the oil, thousands of feet underground at four Gulf Coast sites in Louisiana and Texas, could suffer damage from the pace of the release. Damage to the caverns would make it harder to respond to future energy emergencies.
Officials clash over the safe floor
The Energy Department has said at least 70 million barrels must remain in the reserve to safely manage the caverns. But Amos Hochstein, who served as a senior energy advisor to President Joe Biden, disputed that figure this week.
According to CNBC: "the SPR can go to 70 million barrels. It's nonsense", Hochstein said, adding that at that level the reserve would be depleted to the point of never resurrecting it. He said in June that depleting the reserve below 300 million barrels risks damage to the caverns, and told an Atlantic Council event he knows plenty of people who think the SPR cannot get near 300 million barrels without physically damaging the storage caverns.
Energy Department Press Secretary Ben Dietderich pushed back, saying claims that the SPR's storage caverns risk collapse are false because the caverns are always full and only the ratio of oil to water inside them changes. He said the Trump administration is managing the SPR responsibly as a critical national security asset.
What the engineering data shows
Seventy million barrels is the strict physical minimum needed at the top of the caverns to keep extraction pipes submerged in oil rather than water, said Siddharth Misra, a petroleum engineering professor at Texas A&M University. However, he said the practical operational floor for crude inventory sits between 250 million and 300 million barrels, and cavern integrity and overall operational capability face elevated risk at current levels.
Below 300 million barrels, the SPR loses its ability to pump oil at rapid speeds during emergencies, Misra said. Fresh water pumped in during rapid drawdowns dissolves the salt walls, which he said thins the pillars separating adjacent caverns and raises the risk of a structural cave-in. Analysts at Rapidan Energy estimated the SPR has a floor of around 170 million barrels, below which cavern integrity and pumping infrastructure limitations argue against further draws.
The Government Accountability Office found in a May report that repeated partial drawdowns followed by refills can leach parts of a cavern repeatedly, leading to undesirable shapes, though most caverns were in very good condition after the 2022 drawdown tied to Russia's invasion of Ukraine. Energy Department officials told the GAO they are uncertain how long the infrastructure will hold together. Hochstein said a hurricane in Florida or Louisiana could put the U.S. in a tough position at current levels, since a reserve below 300 million barrels slows the flow and adds danger.
Source: CNBC
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