I always have a hard time balancing two things in my brain - record US oil production and historic drawdowns of the SPR. What grade of crude is stored in our reserves? Is it light, sweet crude that we have limited refinement capacity to process? Or is the heavy crude that we can refine? Overall the drawdowns are obviously political but how hard will it be to refill these things once some heads turn this fall (hopefully)?
Thanks for your reporting as always. Great article.
Thanks for the question, B Apple. I wrote a Substack article about some of the details of the SPR on Aug. 15, 2022, which you might find helpful. The SPR now contains lighter crudes which are comingled. Sour and sweet crudes are stored in separate caverns. Much of our refining capacity was built to refine sour heavy crude band but can run lighter crudes, but not as cheaply as processing sour heavy crude. Something that is very important is that the SPR caverns were designed for a max of 5 ins and outs. Each time they are pumped out, the walls of the salt caverns lose salt, weakening the caverns. They were not designed to continually pump in and out like a steel tank. Every time crude is sold for the purpose of pushing down gasoline prices, the caverns are damaged and will require restorative work. At some point, they become unrepairable. I hope this helps. Ed
I always have a hard time balancing two things in my brain - record US oil production and historic drawdowns of the SPR. What grade of crude is stored in our reserves? Is it light, sweet crude that we have limited refinement capacity to process? Or is the heavy crude that we can refine? Overall the drawdowns are obviously political but how hard will it be to refill these things once some heads turn this fall (hopefully)?
Thanks for your reporting as always. Great article.
Thanks for the question, B Apple. I wrote a Substack article about some of the details of the SPR on Aug. 15, 2022, which you might find helpful. The SPR now contains lighter crudes which are comingled. Sour and sweet crudes are stored in separate caverns. Much of our refining capacity was built to refine sour heavy crude band but can run lighter crudes, but not as cheaply as processing sour heavy crude. Something that is very important is that the SPR caverns were designed for a max of 5 ins and outs. Each time they are pumped out, the walls of the salt caverns lose salt, weakening the caverns. They were not designed to continually pump in and out like a steel tank. Every time crude is sold for the purpose of pushing down gasoline prices, the caverns are damaged and will require restorative work. At some point, they become unrepairable. I hope this helps. Ed