> On March 19, 2020, President Donald Trump directed the Department of Energy to fill the Strategic Petroleum Reserve to maximum capacity, when oil was priced at $24 per barrel. This directive was given to help support domestic oil producers given the impending economic collapse from COVID-19 and extreme drops in international oil markets. However, funding was blocked by Congress, with Senate Democratic Leader Chuck Schumer stating that Democrats had blocked a "bailout for big oil".
In March 2020 the SPR was at 640 Mbarrels (out of 714M). What was blocked was a US$ 3B line item out of a US$ 2T stimulus budget what would have topped things up to the 714M (a purchase of ~77M).
In 2022, ~340Mbarrels (180+30+40+45+20+10+15) were released due to the effects of Russia's invasion of Ukraine (and we still can crazy-high inflation due to energy (and food) prices):
Having 77M more would not have been a bad thing, but I'm (a) curious how much it would it would have made a difference now (6 years later), and/or (b) if there was more earlier on if more would have been released in previous events (because more was available to be release: a 'self-fullfillng prophecy' of sorts).
Not sure why you’re being downvoted. It seems like it would have been a sensible time to buy back then with such a low price, although of course government spending was already very high due to COVID.
It was a missed opportunity to top it off from about 625m to 714m barrels. But the Trump administration really shot themselves in the foot by loudly championing it as a bailout for big oil. Trump didn't care about the reserve, he cared about the oil industry. A lot of money was going out the door.
> But the Trump administration really shot themselves in the foot by loudly championing it as a bailout for big oil.
For all I hate about him and his admin, the trump admin didn't call it a "bailout" once that I can find (even with the help of AI). The only quotes I can find are Chuck Schumer / Democrats calling it that and no direct quote of Trump saying it. In fact this is what I can find:
> On March 13, 2020, Trump described it as purchasing crude oil “at a very good price.” He said filling the reserve would save taxpayers money while also “helping our oil industry.”
> On April 3, a reporter directly asked Trump whether oil executives had requested a bailout. Trump answered: “No, they didn’t ask for a bailout. No.”
> The “bailout for big oil” wording came from Chuck Schumer and Senate Democrats, not Trump. Schumer’s official March 25 press release claimed that the final CARES Act had: “Eliminated $3 billion bailout for big oil.”
Would love to be proven wrong here.
> Trump didn't care about the reserve, he cared about the oil industry.
Does that even make a difference?
Either way it's filling the reserve for instances exactly like this, and was blocked by politicians to try and "win" for their party at the expense of every US citizen.
I'm no fan of Mr Schumer. However, perhaps he was of the opinion that US-Israel wouldn't have been as stupid as they were to go war with Iran in the way that they did.
It shows massive withdrawals mainly in 2022 after lighter withdrawals in 2021, before a period of refilling; and then even more rapid withdrawals in 2026.
I believe 2021 and some of 2022 was a response to inflation from COVID, and 2022 was obviously also the year Russian oil went off the market. 2026 is the Iran war.
I wouldn't be so quick to jump to deceptive and journalistic malpractice. The way I read it was not that they were inflating the number of drawdowns, but rather pointing out that it was designed for full drawdowns, not rapid and repeated cycles of addition/extraction.
The problem seems to be the rate of extraction and replacement, not the total volume ever extracted. I could be reading it wrong, but that was the impression I got.
"The reserve was designed to handle five full drawdowns over its lifespan. Instead, it has undergone dozens of cycles over 40 years.
Misra told CNBC that “because the system was not designed for this many cycles, the repeated injection of water and extraction of oil have caused severe cavern deformation, accelerated the rate of massive salt falls from the ceilings, and significantly weakened the overall structural integrity of the aging reserve.”
“Dozens of cycles” is totally misleading. They do not mean FULL cycles. The only truthful reading of this claim is that there have been dozens of years that some oil has been released.
And it was not expected to be used that way. It was expected to be used a few times, mostly all of it, for big emergencies. Not to smooth prices in an election year.
What would the US government have realistically been able to know or expect in 1974 with only one major oil shock big enough to warrant the creation of the system?
The US has local oil extraction so in theory its oil supply should be easily self-sustaining. Of course oil doesn't work like that (the local refinement industry is not built for the domestic oil) but this failure is ultimately a consequence of economic policy - not that the US is unique in this.
As I understand it, the oil reserves simply weren't built for frequent use. They were built as a backup plan for a global supply chain collapse. Arguably that happened twice in recent history - first with COVID, then with the US deciding to do it itself by getting into a war with the one state where its experts had predicted a war would cause this to happen and that could not readily be defeated because it's literally carved into a vast mountain range and had decades to come up with a plan for defending itself.
Honestly, the war on Iran isn't even in the range of ordinary American politics - even if you come from the most pessimistic "CIA regime change world tour" angle. There's no coherent reason for it to have been executed the way it was that doesn't require assumptions that most people justifiably would dismiss as conspiracy theories (e.g. intentional destroying the global economy for short-term profit through betting & investments).
It's noteworthy that the caverns holding the reserves are on the verge of collapsing. But it's kind of a moot point because there's no way to restore global supply lines in time to refill them when fully drained this time. Tankers are the only viable way to transport large amounts of oil over long distances and it would take months for any shipments out of the region to arrive and there have been practically no shipments for months already.
Unless the US is going to enact rationing, reserves will be gone soon and so will be local supply. Plus if there's any place willing and able to buy oil at a ridiculous markup, that's where the market (and the remaining supply) will go unless the US wants to pivot into outright piracy.
This is probably a naive question, but I'm wondering: isn't the usefulness of a reserve seriously diminished if using it prevents refilling it afterwards? What was the use case covered by this huge reserve if only a small part can be used before geopardising its future?
Wasn't this known for a while? The problem is that simply agitating the liquid already causes immense wear because these are natural caves selected for their potential as long-term storage, not active sources.
Not to mention that draining them reduces the quality of the remaining oil (much like how you never want to feed an engine from the bottom of a diesel tank).
It's also my understanding that the problem is not just the reserves being drained, let alone drained so much, but also how rapidly they were drained because that again makes things worse.
not just damaged, damaged permanently, like everything else this administration is burning to the ground in our country and just making it someone else's problem to rebuild over the next CENTURY
People have both personal and social interests; the latter can overcome the former in a system that people can trust. (Not saying that we have that right now, or ever have)
I generally find that that idea comes from ignorance of "the other side" rather than the reality of the situation.
People on the left and right are incredibly ignorant of what the other side actually wants and is doing. Half the media would go bankrupt if that changed.
I usually find usage of that word is a good indicator that the argument isn't well thought out enough to be worth reading. It's an "I want easy answers" word.
Oil self-sufficiency isn't quite as simple as oil production > oil exports because not all crude is the same and refineries generally aren't completely crude-type-agnostic. IIRC US refineries prefer processing "heavy" (higher proportion of longer hydrocarbons) and "sour" (higher sulfur proportion) crude but most US production is "light" (higher proportion of shorter hydrocarbons) and "sweet" (lower sulfur proportion), so as a result the US still ends up importing/exporting a bunch of crude.
> Energy Department spokesman Ben Dietderich told CNBC in a statement that assertions regarding cavern collapse were false. “The caverns are always full. All that changes is the ratio of oil and water that is filling them,” Dietderich said, asserting that the Trump administration was “responsibly managing the SPR as the critical national security asset it was designed to be.”
This statement makes me feel worse, not better. Translating from doublespeak: they are acknowledging the caverns are collapsing, and are running it into the ground like every other "critical national security asset".
> On March 19, 2020, President Donald Trump directed the Department of Energy to fill the Strategic Petroleum Reserve to maximum capacity, when oil was priced at $24 per barrel. This directive was given to help support domestic oil producers given the impending economic collapse from COVID-19 and extreme drops in international oil markets. However, funding was blocked by Congress, with Senate Democratic Leader Chuck Schumer stating that Democrats had blocked a "bailout for big oil".
https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(U...
In March 2020 the SPR was at 640 Mbarrels (out of 714M). What was blocked was a US$ 3B line item out of a US$ 2T stimulus budget what would have topped things up to the 714M (a purchase of ~77M).
In 2022, ~340Mbarrels (180+30+40+45+20+10+15) were released due to the effects of Russia's invasion of Ukraine (and we still can crazy-high inflation due to energy (and food) prices):
* https://www.stlouisfed.org/on-the-economy/2024/mar/why-have-...
To date in 2026, 172M have been released due to the Iran war:
* https://www.cnbc.com/2026/07/28/us-strategic-petroleum-reser...
Having 77M more would not have been a bad thing, but I'm (a) curious how much it would it would have made a difference now (6 years later), and/or (b) if there was more earlier on if more would have been released in previous events (because more was available to be release: a 'self-fullfillng prophecy' of sorts).
The only consistent position on US politics that won't get you downvoted on HN is "both parties are dumb."
For all I hate about him and his admin, the trump admin didn't call it a "bailout" once that I can find (even with the help of AI). The only quotes I can find are Chuck Schumer / Democrats calling it that and no direct quote of Trump saying it. In fact this is what I can find:
> On March 13, 2020, Trump described it as purchasing crude oil “at a very good price.” He said filling the reserve would save taxpayers money while also “helping our oil industry.”
> On April 3, a reporter directly asked Trump whether oil executives had requested a bailout. Trump answered: “No, they didn’t ask for a bailout. No.”
> The “bailout for big oil” wording came from Chuck Schumer and Senate Democrats, not Trump. Schumer’s official March 25 press release claimed that the final CARES Act had: “Eliminated $3 billion bailout for big oil.”
Would love to be proven wrong here.
> Trump didn't care about the reserve, he cared about the oil industry.
Does that even make a difference?
Either way it's filling the reserve for instances exactly like this, and was blocked by politicians to try and "win" for their party at the expense of every US citizen.
Didn't use the word "bailout", of course, but imo the meaning is pretty similar
helping = just that, helping. They might be hurting, but they aren't going to die without the help.
bailout = (as wikipedia defines it) "the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy."
Yes, intent matters. As an example, Trump and Republicans spent all of Biden's term complaining about the direct relief provided to the common people.
To me this shows massive withdrawals in 2021-2022 and again in the last two years.
I believe 2021 and some of 2022 was a response to inflation from COVID, and 2022 was obviously also the year Russian oil went off the market. 2026 is the Iran war.
It was not designed for American politics. This feels like a failure of applying realistic, knowable expectations.
The problem seems to be the rate of extraction and replacement, not the total volume ever extracted. I could be reading it wrong, but that was the impression I got.
"The reserve was designed to handle five full drawdowns over its lifespan. Instead, it has undergone dozens of cycles over 40 years.
Misra told CNBC that “because the system was not designed for this many cycles, the repeated injection of water and extraction of oil have caused severe cavern deformation, accelerated the rate of massive salt falls from the ceilings, and significantly weakened the overall structural integrity of the aging reserve.”
The only major drawdowns occur 2020-present.
And that's a problem if the system hasn't been designed for such an operating regime, which the article indicates is the case.
Think of the memory effect[1] in NiCd batteries, except the failure mode is more permanent than just a temporary loss of usable capacity.
[1]: https://en.wikipedia.org/wiki/Memory_effect
As I understand it, the oil reserves simply weren't built for frequent use. They were built as a backup plan for a global supply chain collapse. Arguably that happened twice in recent history - first with COVID, then with the US deciding to do it itself by getting into a war with the one state where its experts had predicted a war would cause this to happen and that could not readily be defeated because it's literally carved into a vast mountain range and had decades to come up with a plan for defending itself.
Honestly, the war on Iran isn't even in the range of ordinary American politics - even if you come from the most pessimistic "CIA regime change world tour" angle. There's no coherent reason for it to have been executed the way it was that doesn't require assumptions that most people justifiably would dismiss as conspiracy theories (e.g. intentional destroying the global economy for short-term profit through betting & investments).
It's noteworthy that the caverns holding the reserves are on the verge of collapsing. But it's kind of a moot point because there's no way to restore global supply lines in time to refill them when fully drained this time. Tankers are the only viable way to transport large amounts of oil over long distances and it would take months for any shipments out of the region to arrive and there have been practically no shipments for months already.
Unless the US is going to enact rationing, reserves will be gone soon and so will be local supply. Plus if there's any place willing and able to buy oil at a ridiculous markup, that's where the market (and the remaining supply) will go unless the US wants to pivot into outright piracy.
Total global war (WWII style), total economic collapse (1929 style), and other kinds of not-even-once-in-a-generation multi-year catastrophes.
Voters getting angry about the price of gas is not one of them.
Not to mention that draining them reduces the quality of the remaining oil (much like how you never want to feed an engine from the bottom of a diesel tank).
It's also my understanding that the problem is not just the reserves being drained, let alone drained so much, but also how rapidly they were drained because that again makes things worse.
not just damaged, damaged permanently, like everything else this administration is burning to the ground in our country and just making it someone else's problem to rebuild over the next CENTURY
Copying what someone else said here once...
gestures vaguely to everything
People on the left and right are incredibly ignorant of what the other side actually wants and is doing. Half the media would go bankrupt if that changed.
I usually find usage of that word is a good indicator that the argument isn't well thought out enough to be worth reading. It's an "I want easy answers" word.
But what the US produces is not necessarily what the US consumes.
Oil markets are global and there is tons of trading going on, so it's not really at all a "fully in house" operation.
Therefore USA is not oil independent, despite being a net exporter.
Releasing barrels lowers the price but it's obviously only a temporary measure.
I think it's a story as the cease fire with Iran is about to run out
This statement makes me feel worse, not better. Translating from doublespeak: they are acknowledging the caverns are collapsing, and are running it into the ground like every other "critical national security asset".