What is the Strategic Petroleum Reserve?
science.howstuffworks.com
science.howstuffworks.com
https://www.energy.gov/articles/us-department-energy-make-st...
"The U.S. Energy Information Administration (EIA) estimates that in 2019, about 2.81 billion barrels (or 7.7 million barrels per day) of crude oil were produced directly from tight oil resources in the United States. This was equal to about 63% of total U.S. crude oil production in 2019." [0]
[0] https://www.eia.gov/tools/faqs/faq.php?id=847&t=6 [1] https://www.huffpost.com/entry/oil-price-fracking_n_5e669a89...
For lower quality oil than this standard, lower prices are paid. For higher qualities, higher prices.
The government is not buying any oil. The SPR is being opened up for storage so expensive producers can hold onto supply until prices recover.
https://www.washingtonexaminer.com/policy/energy/bailout-for...
I agree with your assessment and this was a serious mistake in my opinion.
There is now however an alternative plan to monetize the remaining open space by leasing it to oil companies that need storage space:
https://www.reuters.com/article/us-global-oil-usa-reserve/us...
Storage space is in very high demand at this point - to the extent that oil tankers are being used as floating storage:
https://www.bloomberg.com/news/articles/2020-04-04/the-most-...
Both parties make mistakes.
Sigh.
Why on earth did they frame this as a "bailout for big oil"? It's a strategic concern for national security.
Because that is exactly what it is. You're talking about the largest companies in the world, they've have decades and decades of war and subsidy supporting them.
They don't need more support now, especially considering the environmental destruction they cause. Now is a much better time to push forward higher quality energy production technology like solar, wind, batteries, etc.
I can obviously see that, politically, now is a good opportunity to push agendas that would otherwise not be accepted, but does that really make it a good time overall?
Much better to advance technology when we are fixing our economy versus propping up old, unhealthy means.
The other side of the argument appears to want to cause maximum amount of pain to force people to move to the other sources. I understand that argument. I do not really buy it. National stockpile should not be subject to that. It serves a strategic purpose.
edit: added not before take
Why build it to the storage capacity it has if we’re not going to fill it?
The shale guys can basically flip a switch and go from 0 to millions of BPD.
So we are really just paying to move oil from one rock formation to another...
If anything, the writing is on the wall for American oil production. The current low prices are mainly a manufactured attempt to bankrupt oil producers with higher overhead costs.
The shale oil in the ground is a perfectly good stockpile as is.
Or so it seems to this perhaps overconfident computer guy with little relevant expertise...
I think the point people are trying to make is that it's quite a bit less expensive to buy crude and store it right now than to extract it from shale in the future.
As an economic investment, it may well be a real good idea to buy up cheap oil now. But that's separate from the stockpile argument.
https://www.energy.gov/fe/services/petroleum-reserves/strate...
Even if they were it’s not the purpose of government to gamble public money on market timing bets. Oil has a history of always getting cheaper.
Plenty of private funds are going to be spent in the energy market in these bets.
Just because the US can transmute solvency risk into inflation risk doesn't mean that the cost goes away.
It was horizontal drilling that made it cheaper.
That doesn't necessarily mean that these things will be cheap in the future. There are plenty of social, economic, or political events that could change that.
Unfortunately this isn’t true. This is what it looks like when the cartel (OPEC) isn’t artificially constraining supply.
It can be both at the same time.
We have emergency supplies, they are in the ground or in shale. The US is the largest producer of oil, low prices means more of it stays in the ground waiting for higher prices.
It is critical to understand that shale/tar sands oil is very expensive in terms of fugitive emissions, far more than traditional deep wells. An emissions tax is needed to capture this externalized cost. A more stable oil price and greenhouse emissions taxation would encourage better fracking engineering to reduce emissions, as well as reducing pointless consumption.
We have a hundred times more oil in the ground than the strategize reserve can hold. It’s a political boondoggle.
Take the case of the SPR drawn downs after hurricane Katrina. Most of the disruption there was that the ports needed to get the oil on shore were damaged. More drilling wouldn't have fixed that in the short or long term - we just needed to repair the ports. The SPR was able to cover that and minimize the economic shocks of a fairly short term problem.
The strategic oil supplies releases were done to lower prices for summer drivers to prevent damage to Bushes popularity rating.
Certainly blocking pricing mechanisms without any additional government source of supply (I'm looking at you, preventing scalping during disasters) is potentially harmful, but I don't see the harm when they government can step in to meet demand.
On the face, lower oil prices is throwing millions out of work and “damaging” energy companies. But in reality it’s a huge boon for the economy. Outside of the energy businesses we are all energy consuming and cheaper energy makes us all more prosperous. The “damage” to energy companies and their employees is the wise reallocation if investment and labor into industries that now have more value and demand. The “damage” can also be temporary, when prices increase investment and jobs will return.
This rests on speculation about future choices treated as if it were a fact, which is then used to make an absolutist, fatalistic decree.
And all the while the opposite is often true. If a decision is widely believed to benefit the American people, emergencies are excellent catalysts to motivate bipartisan compromise.
Basically, they can accept oil into the reserve instead of cash payments owed. There's also quite a bit of leeway for borrowing and lending oil as needed, as well as ways to lease unused storage capacity.
And the overall capacity is rate limited such that it takes almost half a year to fill/drain accessible reserves, so it's not like we could just purchases $3 billion in oil tomorrow and instantly put it there. It might store 35-40 days of US needs, but it takes 140-180 days to fill and/or access it. Which makes royalty based purchasing over time align more with ability to accept delivery.
So just because Congress removed that $3 billion, doesn't mean it's not getting filled.
How would Russia’s loss, “For once”, be our gain? Considering the rival interests of Russia and the United States, it would seem that Russia’s loss is usually our gain. What am I missing here?
https://www.bloomberg.com/opinion/articles/2020-04-02/negati...
Plans to expand capacity to a billion barrels with the addition of a new site in Richton, MS were cancelled in 2010.[1]
[0] https://www.spr.doe.gov/dir/dir.html
[1] https://web.archive.org/web/20140710034505/http://energy.gov...
Keep in mind that oil can degrade while in storage, and degrade the storage itself. Taxation complicates the picture for commercial interests.
All things considered, the world probably has more above ground storage than it needs, and what exists is already full. From the perspective of at least one major oil company that I know of, this was already the case a decade ago.
During the last round of oil shocks ('07-'08) I remember a lot being made about the inelasticity of demand for oil, and how that made prices so volatile. I'm sure that it's still very inelastic, but now that there are non-petroleum transportation alternatives (mass-produced EVs) I'm curious to see what future oil shocks will look like, and whether we'll reduce some of that storage as price volatility goes away.
Over 10 years people can buy less gas cars and more electric cars. But over a month, the car in your garage is either gas or electric. Not that many individual things that can do both. Maybe some power plants, where say neither coal nor oil generators are at 100% capacity...
Then US companies figured out how to profit from extracting from shale oil deposits (by fracking).
It literally does nothing but subsidize US oil producers and mildly reduce price spikes for limited periods.
https://www.wsj.com/articles/u-s-becomes-net-exporter-of-oil...
Edit: Nevermind, misread the sentence. Keeping this for the link.
During and for years after WWII, the US was a major net exporter of oil, which is why I felt the need to specify the approximate start (some time in the 1950s or early 1960s) of the US's dependence on imported oil.
https://www.energy.gov/fe/services/petroleum-reserves/strate...
US production rates of oil have varied dramatically over the years.
Answer: it doesn’t.
The point of the reserve is to be used with smaller withdrawals to stabilize the system over time or provide a buffer in case of short term disruption.
The idea that pumping it from one hole to another is disaster insurance is ludicrous.
Most easily accessible oil resources are long gone. What we could get to if we were reduced to 1800s technology is extremely limited.
I get why in an economy that to a large extent depends on petrol having such a reserve might alleviate some fear.
However, I also don't want to imagine a situation where the US actually would have to use this reserve.
Does the salt of the actual cavern dissolve in the oil? And does that effect the quality?
Are these reserves easy military targets? It would seem causing an explosion in one of these would be catastrophic. I can see why this wouldn't be, but I'd like to leave this question as is to promote (fun) discussion.
Salt caverns are very interesting for storing all kinds of oil / hydrocarbons / chemicals. Most fluids found naturally in the ground (oil, natural gas, groundwater) are stored in porous rock. Rocks like sandstone seem quite solid on a human scale, but do have microscopic voids which are filled with whatever kind of liquid/gas in their natural state. We drill into this rock and the liquid/gas slowly moves through the pores of the rock and come up the well. After the liquid/gas is removed, the rock still remains, there's not like a giant cavern you could stand in remaining underground...it's just still solid sandstone.
Sometimes we can re-use these sandstone/limestone reservoirs after extracting the oil from them. Natural gas storage facilities sometimes set up shop and pump surge/excess natural gas into the empty oil fields in the off season (summer for northern states) and then extract it again in the high season (winter for northern states to heat homes). However, due to these being natural formations, sometimes there are discontinuities in the boundary layers of impermeable rock so that some of the gas leaks out of the reservoir over time. The storage facility says basically "Anyone who can deliver natural gas to this pipeline may store their natural gas with us. We will mix it into the formation with everyone else's gas, and then pump it out later. For every 1000ft^3 you give us, we will give you 900ft^3 back, and charge you $4 for the privilege."
Salt caverns are very different! They're not porous. underground there can be immense - up to 2 miles long by 2.5 miles wide, by 1800 feet in depth. Sometimes miners work the salt face like coal mines, but because salt is soluble in water, sometimes it is mined by drilling a small hole into it, then pumping water through the hole and bringing saltwater back up (typically this is the method that chemical plants such as the one in Freeport, TX use to obtain salt/chlorine to make PVC/etc).
After washing out a lot of salt using water, there is left an enormous void - a room large enough to park many vehicles. It takes a lot of engineering to make sure you washed out the cavern into a shape that is structurally sound. If geologists determine that the cavern is structurally sound, then they can try filling it with hydrocarbons.
Unlike sandstone/limestone formations, salt caverns rarely leak much product out of storage, but the salt is rarely 100% pure (92-98% is common) so some of the other minerals can dissolve into the stored product and needs to be removed...but typically the cost of cleaning the stored product is minimal compared to its value.
To answer your military question: Yes and no. Yes, all storage facilities of strategic value are mapped by all world powers and targeted in a WW3 scenario. But you wouldn't generally try to cause an explosion inside one. In fact, a stuxnet-style attack would be somewhat unlikely to be able to, as there's generally no oxygen/air inside the storage caverns. The oil is removed by pumping water below it.
A more likely attack would be a conventional or nuclear explosion above ground, knocking out the equipment/pipes needed to extract the oil from the cavern.
Other targets of similar or even greater value would include any locations where multiple strategic oil pipelines cross eachother and exchange material flows (e.g. Hattiesburg, MS), or where the refining takes place (e.g. Houston, TX). Even just one pipeline not working unexpectedly can cause noticeable fuel disruptions/shortages, such as when Colonial Pipeline had some accidents in 2016, parts of New England area faced fuel shortages.
Also, we have plenty of above-ground oil storage (in typical tanks) in addition to underground storage. However, the strategic petroleum reserves (800 million barrels) are truly massive and dwarf the entire private industry storage in USA (above and belowground combine to 650 million barrels).
[1] https://en.wikipedia.org/wiki/Lake_Peigneur [2] https://www.youtube.com/watch?v=p_iZr2-Coqc
still blows my mind
They drilled into a salt dome in Mississippi, placed and detonated a nuclear bomb into it to see "what if". They didn't destroy the dome. It created a nice little pocket of highly radioactive salt that self-capped with melt material. The cavity got bigger, but the salt dome is still intact.
That kind of durability is what makes these kinds of structures perfect for geological storage.
https://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm
Line 7 under Stocks list the weekly SPR. Clicks its box, the graph button at top to get a history graph.
If so you can basically fix a mask with elastic and a stapler.
Meanwhile the elastic in my underwear seems to last forever! I guess I know how I can fix those masks ...
We also apparently sent a chunk of them to China early on.
That tells me we didn't really have reserves, we had an attempt at a reserve.
>Seems like it’s neither strategic nor a stockpile
(The whole sequence makes a concise and well worth read)
The problem here is not one of having the mechanism, it's underestimating how many would be needed in a massive outbreak.
Instead we have irresponsible politicians letting business chase slave labor, and only invoking "national security" when it comes to deteriorating rights or buying ever more machines of war.
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
(If you want us to know something, please email hn@ycombinator.com. We only see comments like this randomly.)
I saw that, yes.
> (If you want us to know something, please email hn@ycombinator.com. We only see comments like this randomly.)
Ah, good to know, thanks!
And for the keyboard nay-sayers that are typing on a keyboard made of ABS, walking their down on a nylon leash, holding their iPhone in a TPU case, drinking from a polycarbonate reusable water bottle, wondering how we're going to refine steel for wind turbines, oil is an incredible useful substance.
Let's learn from the N95 mask shortage. It's incredibly important to have national stockpiles to decouple ourselves from the events in the world (like the one happening now).
I don't think any of the "keyboard nay-sayers" are saying that petroleum isn't useful, and it's worth engaging with their actual arguments.
The other two examples – not so much.
1. The validity of the argument isn't affected by whether one is a hypocrite. If Apple is indeed behaving unethically, it's still behaving unethically even if I own an iPhone. If Apple isn't behaving unethically, then you should be able to argue that on grounds other than "you bought an iPhone." The poster in this case made specific, refutable claims - that Apple dodges taxes and can't pay decent wages to their Chinese factory workers. A legitimate counterargument is that they don't in fact dodge taxes or do in fact pay decent wages (or perhaps that their current behavior is okay), not an attack on the person making the argument.
2. Apple products are not a necessity, but in the current era, a smartphone is very close to a necessity (yes, there are people who steadfastly avoid them, and there are also people who live in the forest, that's not what "necessity" means). And there are relatively few options for good smartphones, none of which come from morally blameless companies. (Personally, I find security valuable, and Apple has the best track record of producing phones with long-term security support, which means you can buy fewer Apple products than anything else.) It might be hypocritical to buy a product from company X while steadfastly believing that company X is behaving unethically, but it's hardly a sign that you don't in fact believe that company X behaves unethically. You might simply have weight the alternatives and decided that buying from company X is the best of several bad options.
(But to the actual point - it's hard to infer whether someone "cares enough" about their beliefs. I personally care about Apple's labor practices; I also care a lot about Google's security practices, which are also contributing to serious human rights violations in China. I'm allowed to care about more than one thing at once.)
I think I mixed up things in my head, sorry - I don't think there's a claim of that exploit being used in China in particular. (I was probably confusing it with https://googleprojectzero.blogspot.com/2019/08/a-very-deep-d... / https://techcrunch.com/2019/08/31/china-google-iphone-uyghur... , which is about iOS, in fact - but IMO there's a big difference between new bugs being discovered and "CVE-2019-2215 permits attackers to fully compromise a device with only untrusted app access or a browser renderer exploit and despite the patch being available in the upstream Linux kernel, it was left unpatched in Android devices for almost 2 years." I don't think either Apple or Google is doing an adequate job here at all, but Apple still seems to be a bit better, between the options.)
2. If I truly believed Apple and every other smartphone manufacturer was causing human suffering to produce their smartphones, my own morality would dictate that my "need" for a smartphone still does not justify the purchase of one. It's a null point to me though, because A. I don't actually believe that Apple's manufacturing practices are "wrong", and B. I know plenty of successful people that get by without smartphones in the current era.
It's not relevant when the problem is collective.
Your opinion (2) doesn't make any sense to me, because if you did grant that the manufacture of all smartphones involves massive human suffering, how could manufacturing of everything else not?
The alternative to a smart phone is a feature phone made in a similar factory, and the alternative to that is a landline, also made in a similar factory, and the alternative to all that is maybe a laptop with VoIP, also made in a similar factory... It's exploitation all the way down.
When the markets only way to offer prosperity to some is to exploit and shaft others, while maintaining the position of elite classes, there is a problem.
Just because the alternative is potential death, it does not excuse exploitative practices.
That doesn't mean anyone doing them is being "exploited". And if that is your definition of exploitation, you've reduced the word to be effectively meaningless.
Examples and why would you prefer not to do them? Are they legally allowed in your country anymore? Is there a reason for that? Perhaps because they are now considered exploitative?
> That doesn't mean anyone doing them is being "exploited". And if that is your definition of exploitation, you've reduced the word to be effectively meaningless.
It sounds to me like you don't even have "exploitation" in your vocabulary, as your bar is so low, you wouldn't consider anything exploitative.
Literally multi-nationals exploit labor law differences to extract cost savings, and obfuscated supply chains to launder the blood off the raw materials they put into products. This is exploitative. Perhaps you should just come to terms with the fact that you are OK with it.
A minority of rich can extract the planets resources.
The species does not have to abide that minorities ideological demands literally.
Avoiding figurative harm of the self righteous is walking the path authoritarianism.
A big number in a bank DB is not irrefutable proof of value to the species.
Westerners and the monied are outnumbered. Environmental collapse from chewing up resources for disposable shit that rots, doesn’t last for the next generation, does not have to be tolerated.
Maybe if we just focused on making sure our biological similarities are cared for as a society, we’d have more time to wank our customized imaginings of our individual importance in private, but otherwise be unable to achieve political leverage to drive us off a cliff, leaving others to stably consider their ideas.
But no... we have to bend over to pleasure the grifter class.
His point is the first part ... i don't believe the reservoir of oil is the issue, but the lack of progress towards a greener future. We have no other choice, and little control over government, beyond peaceful criticisms.
So let it be.
Don't pick and choose, own up. Im sure there’s a latin phrase to what you do, too, but were not here to squabble! Not during these times ..
Apple products are not a necessity but cell phones pretty much are today. And nearly all phones are made in countries with looser labor and environmental laws than we'd accept in Western nations.
I'm not sure if people are more filled with angst because they're cooped up at home, but it seems to border on a mental disorder if you're sitting behind your keyboard all day screaming at people who are "hypocrites" because they both don't like oil being drilled, and also live in a society where they use some oil.
I saw a video a few months ago mocking "anti police protesters asking for the police to help them when they were being attacked". And the premise seemed to be "haha, if you hate police so much (they don't), isnt it ironic that you need their help?" No, not really. They pay the police's salary though taxes. Its not like them protesting takes that funding away. Apparently its hypocritical to not mindlessly agree with everything police do if you will ever need the police to help you. Same shit here, just endless angst and hate for stranger based on made up projections. Why? What is the use for this?
Like one could argue society makes it harder and harder for you to be ethical as time goes on. Making the path of resistance ever so harder and requiring more risk from you. And this can be used as a tool later to justify societies unethical choices. Like, hey, if you can't even be ethical yourself, why do you expect society to be and say we should?
And maybe this is the point of the comic?
That said, a price war is of course the right time to bunker up, economically.
One way a massive Reserve could help fight fossil fuel production is because it devalues arguments that we need to expand drilling permits. With a big enough reserve, we can reduce permits on federal lands to just about nothing with plenty of time to drill them in case of an emergency like a war or something.
Worse, it sat at the top of the entire page, sucking oxygen away from everything else, because indignation routinely attracts upvotes. HN readers belong to the same species as Jerry Springer attendees. I've flagged it and marked it off topic now.
"Eschew flamebait. Don't introduce flamewar topics unless you have something genuinely new to say. Avoid unrelated controversies and generic tangents."