• Jun 24, 2011
On Thursday, U.S. Department of Energy Secretary Steven Chu announced that the U.S., along with its partners in the International Energy Agency, has decided to release a total of 60 million barrels of oil from strategic reserves within the next 30 days. This move is to offset the disruption in oil supply caused by continued unrest in the Middle East. For its part, the U.S. will release 30 million barrels of oil from its Strategic Petroleum Reserve (SPR). According to the DOE, the SPR currently has 727 million barrels of oil.

Energy Secretary Steven Chu had this to say of the U.S. government's decision to tap into the SPR:
We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery. As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary.
The situation in Libya, according to the DOE, causes a loss of roughly 1.5 million barrels of oil per day. Some say soaring gas prices here in the U.S. are a direct result of the turmoil in Libya so, in theory, tapping the SPR should drive down pump prices. That's not how these things work, as we'll probably find out in, um, around 20 days.

[Source: U.S. Department of Energy]
Show full PR text
Department of Energy to Release Oil from the Strategic Petroleum Reserve

Washington, DC - U.S. Energy Secretary Steven Chu announced today that the U.S. and its partners in the International Energy Agency have decided to release a total of 60 million barrels of oil onto the world market over the next 30 days to offset the disruption in the oil supply caused by unrest in the Middle East. As part of this effort, the U.S. will release 30 million barrels of oil from the Strategic Petroleum Reserve (SPR). The SPR is currently at a historically high level with 727 million barrels.

"We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery," said Energy Secretary Steven Chu. "As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary."

The United States has been in close contact with oil producing and consuming countries about disruptions to the international oil market that could affect the global economy. The situation in Libya has caused a loss of roughly 1.5 million barrels of oil per day - particularly of light, sweet crude - from global markets. As the United States enters the months of July and August, when demand is typically highest, prices remain significantly higher than they were prior to the start of the unrest in Libya.

The Administration will continue to consult closely with other consuming and producing countries in the period ahead. The decision today is intended to complement the production increases recently announced by a number of major oil producing countries. The United States welcomes those commitments and encourages other countries to follow suit.


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 33 Comments
      dmay
      • 3 Years Ago
      I've always thought this was dumb. What's the point? Sure it drops the price of oil down a few bucks for a couple of days, but then what? First of all, we eventually have to buy it back, which is going to raise the price in the future. So, at best we are just postponing a problem for a couple of months. Second, it doesn't address the real problems causing the prices to rise. Third, what do we do if there is an actual emergency in the next few days and we are left without enough reserves? This just doesn't make sense anyway I try to look at it.
      goodoldgorr
      • 3 Years Ago
      We should release audi e-gas method here now. Unlimited energy without pollution and almost no cost.
        dmay
        • 3 Years Ago
        @goodoldgorr
        artificial fuels are not new, and they are not free. You still need a source of energy to produce them. You can make them with a number of different sources, including wind and solar or basically any source of energy. But, they are always going to be more expensive than the energy that was used to make them. Nothing is for free. Nothing is unlimited.
          Chris M
          • 3 Years Ago
          @dmay
          Gorr, there is a lot more to it than just "air and water". Our food comes from "air and water", but it also takes plants and minerals and farmers to harvest the fields and truckers to ship and factories to process and stores to sell, all of which adds to the cost. Similarly, any synthetic fuel process like the "Audi e-gas" also requires several steps and lots of processes and shipping and factories, all of which add to the costs.
          goodoldgorr
          • 3 Years Ago
          @dmay
          How about air and water, do you still trade those ?
        Nick
        • 3 Years Ago
        @goodoldgorr
        retard
      Ryan
      • 3 Years Ago
      It will be interesting to see what the oil speculators will do. They will probably just wait it out. I understand it is to get unemployment down and free up money that would have gone to gasoline to be used to buy other things, but I can only hope that Obama will be much more Green in his second term.
      upstategreenie
      • 3 Years Ago
      if being forced to use our strategic petroleum reserve in order to just stabilize oil prices at $100 due no oil from libya which is a minor producer anyway doesn't tell you we are past peak oil, then nothing will.
      Michael Walsh
      • 3 Years Ago
      Bad idea. We'll have to get used to high gas prices sooner or later.
      Ford Future
      • 3 Years Ago
      What does the administration know that we don't. Do they see even tighter markets down the road for some reason?
      Spec
      • 3 Years Ago
      I'm skeptical of such measures. But it might not be a bad idea since they are trying to ease the situation until Libya can get back on-line, placate consumers during the summer driving season, act as a stealth stimulus package to give the economy a kick, and throw a wrench into speculator games. It does nothing for the long term but it could provide some useful short term benefits.
      Dan Frederiksen
      • 3 Years Ago
      curious to do that now since the price has dropped quite a bit from its peak. it will hardly matter and only exhaust the reserve for a time when things get really criticial. trying to buy back the reserve later might just raise the price above what it was before. I wouldn't do it.
      paulwesterberg
      • 3 Years Ago
      This is stupid. The price of light sweet crude has already dropped to $90, If they were going to do something like this then they should do it when oil goes up to $120 and pump prices are over $4 per gallon.
        Spec
        • 3 Years Ago
        @paulwesterberg
        It dropped down to $90/barrel AFTER this program was announced.
      Sonny J Ong
      • 3 Years Ago
      They should probably save all that reserve for when there's no more oil...
      Floorman
      • 3 Years Ago
      Wait ... Increasing supply ... lowers the price????? I thought OPEC would just reduce production to keep the price up .. I thought evil oil men would rig the markets to keep the price up I thought NOT drilling would NOT effect price .... Low fuel prices IS GOOD FOR THE ECONOMY??????
        Spec
        • 3 Years Ago
        @Floorman
        Do you have point? Before you try, let me give you a few facts: -The price of oil has gone up despite the fact that US oil production has increased more in the last 2 years than any of the last 20 years. -Almost all of the OPEC producers are producing at full capacity. They are not really holding back. -Saudi Arabia has a little more capacity but not as much as they claim and much of it is heavy sour crude that most refineries cannot handle. -Most of the OPEC producers won't cut production because they have their own budget problems and if their economies go soft the people will overthrow the autocratic government.
          Spec
          • 3 Years Ago
          @Spec
          As I suspected, your views confused by a mis-mash of incorrect facts -No one said stopping drilling in the gulf would have no effect on prices. Drilling was TEMPORARILY stopped to reduce the type of spill that occurred to ensure we had ways of stopping that. Drilling has resumed. -What does ANWR stand for? Alaska National Wildlife RESERVE. Apparently that word has lost meaning. I think we should drill there just to shut idiots up. There isn't as much oil there as the propagandists tell you. And it will be extracted at such a slow rate that it won't chance prices in a noticeable manner. (The Alaska pipeline can only carry so much oil at a time and oil production is a long slow process.) -We have to change energy policy because the world itself is changing. The USA hit peak oil in 1970. The world is approaching the peak (some say it has past it but I disagree). And yes, switching from SUVs to EVs really WOULD help the economy . . . why? Because EVs use DOMESTIC energy. We import nearly 2/3s of the oil use. We are exporting our wealth for another junkie's fix of oil. If we get off oil and move to EVs, then we will use electricity from domestic coal, nuclear, natural gas, wind, sun, hydro, etc. You wanna stick with oil? Well, Iran's Ahmedinejad, Hugo Chavez, Vladimir Putin, the Saudis, are all very happy that you will continue sending them massive amounts of money. Doesn't seem very patriotic to me.
          Floorman
          • 3 Years Ago
          @Spec
          Drilling was TEMPORARILY stopped to reduce the type of spill that occurred to ensure we had ways of stopping that. Drilling has resumed. Yes but now the oil rigs are GONE The administration knew that the oil co would not let them set idle and would move them to other country's . so its easy to say you can drill now when you know .. they wont. There isn't as much oil there as the propagandists tell you The U.S. Geological service is a propagandists operation? they said there is up to 17 billion barrels of oil. who is listening to propagandists now? And yes, switching from SUVs to EVs really WOULD help the economy . . OK then tell me ... Whats the turn over point? ... you know the point where EV really make a dent in the oil price? ... No one here has ever said. Does any one really know? Well, Iran's Ahmedinejad, Hugo Chavez, Vladimir Putin, the Saudis, are all very happy that you will continue sending them massive amounts of money. Doesn't seem very patriotic to me. My point exactly why are we sending them money when we dont drill here My main point was this .. once again if he is changing his policies to win reelection the policies he has been using ... are wrong...
          Floorman
          • 3 Years Ago
          @Spec
          Do you have point? Yes the point is you hear this stuff all the time on this blog. If the game is rigged releasing 60 million should have done nothing for the price If not drilling the 10 BILLION in Anwr and stopping drilling in the gulf will have little impact on U.S. prices then how come releasing just 60 MILLION dropped the price? If you have to change you energy policy to get the economy going to get reelected then isn't your energy policy ..... wrong? If high fuel prices are effecting the economy then getting rid of SUV's and going EV is not the answer
        EJ
        • 3 Years Ago
        @Floorman
        The volume of this release represents what can satisfy world consumption for 16 hours. If you're clueless enough to think that this volume of oil can have any meaningful affect on anything other than short term speculative pricing, you must be one of the 63% of the US population that are 'unhappy with Obama's handling of gas prices', and think that he can actually effect a change.
      Nick
      • 3 Years Ago
      What's the volume of the entire reserve in the US?
        dmay
        • 3 Years Ago
        @Nick
        http://fossil.energy.gov/programs/reserves/spr/spr-facts.html TRATEGIC PETROLEUM RESERVE INVENTORY INVENTORY AS OF May 31, 2011 Sweet: 292.5 million bbls Sour: 434 million bbls Total: 726.5 * Totals may change due to rounding
          Nick
          • 3 Years Ago
          @dmay
          Thanks. So that'll be less than 1/10th of the reserve.
    • Load More Comments