Something important, and valuable, has been
quietly hidden along America’s Gulf Coast. Across
four secure sites in unassuming locations lies
nearly 700 million barrels of oil – buried
underground. A total of 60 subterranean caverns,
carved into rock salt beneath the surface,
constitute the United States’ massive “Strategic
Petroleum Reserve” (SPR).
The facility was set up 40 years ago and there are
now many other huge oil stockpiles dotted around
the world. In fact, a whole host of countries have
poured billions of dollars into developing such
facilities and more are on the way. But what are
these reserves – and why would anyone want to
bury oil back into the ground in the first place?
The answer lies in the energy crisis of 1973. Arab
oil exporters had cut off the West from their
supplies
in response to US support for Israel during the
Yom Kippur War. The world was so dependent on
oil from the Middle East that prices skyrocketed
and petrol was soon being rationed at US filling
stations. In some cases, it dried up completely.
People feared that any petrol they had might be
stolen and a few even took to protecting their cars
with firearms (see photographs taken during the
crisis, below).
A couple of years later, the US began building its
SPR, filling caverns full of crude oil. Were oil
supplies to be severely disrupted in the future, now
the US would have its own stores to tide them
through a price spike and alleviate pressure on
global markets. As a government website boasts ,
“The SPR's formidable size… makes it a significant
deterrent to oil import cutoffs and a key tool of
foreign policy.” It’s a neat, but expensive, idea.
The current year’s budget for maintaining the SPR
is $200m.
The reserve's formidable size makes it a
significant deterrent to oil import cutoffs and
a key tool of foreign policy
Bob Corbin at the US Department of Energy is the
person in charge of making sure that money is
spent wisely. “All of our sites are located in what
we call salt domes,” he explains. “The salt is
impervious to the crude oil, there’s no mixing, no
breaking down, so it’s a great storage facility.”
Corbin, who served for 22 years with the military in
the US Coast Guard, is proud of the four sites,
which stretch from Baton Rouge, Louisiana to the
largest of the four, near the tiny city of Freeport,
Texas. He refers to the vast salt storage chambers
as “my caverns”. “The sites themselves,” he says,
“are very impressive.”
But there’s not much to see above ground –
merely some wellbore heads and pipelines. The
wellbores themselves plunge thousands of feet into
the caverns below and can push water in at high
pressure in order to retrieve the oil through a
process of displacement. Corbin adds that
managing such infrastructure comes with unique
challenges. The salt caverns are not completely
stable, for example. Sometimes bits of the walls or
ceilings may crumble away, causing damage to
machinery which has to be carefully replaced. It’s
not possible for workers to enter the caverns
physically so, like drilling oil out of a natural well,
it has to be done remotely.
However, special tools can be used to give a little
visibility. “Periodically when caverns are empty you
can actually shoot sonar images of the caverns,”
says Corbin. “And that gives you a three-
dimensional way of looking at them.” Some have
interesting shapes, he adds. The outline of one
chamber, for example, would resemble a large
flying saucer.
America has, in the past, relied on the SPR to
help get it out of sticky situations
America has, in the past, relied on the SPR to help
get it out of sticky situations . Take the first Gulf
War for example, in which oil distribution in the
Middle East was disrupted. Or Hurricane Katrina in
2005, when requests for emergency oil were
approved within 24 hours of the storm's landfall.
Global stockpiles
The US is far from the only country which has
invested heavily in strategic oil reserves. Japan
has a series of sites where well over 500 million
barrels of oil are stored in large above-ground
tanks. The facility at Shibushi , for example is just
off-shore. Following the catastrophic earthquake
and tsunami which struck Japan in 2011, calls
were made to expand the country’s oil stocks in
case of crises in the future which might hamper oil
distribution again.
The International Energy Agency (IEA) oversees the
release of oil from a wide range of reserves
internationally. Martin Young is head of the body’s
Emergency Policy Division: “When a country signs
up to the IEA there are various obligations,” he
says. “One of the key obligations is to hold oil
stocks equivalent to 90 days’ imports.”
But not all countries have salt domes to store oil
underground. Nor do all countries even have large,
specialised storage facilities for SPR purposes. The
UK, for instance, has neither. “What the UK has is
an obligation on industry to hold oil at their
existing sites above what they would normally do,”
explains Young. That oil is quietly kept aside by
firms so that the government can access it
immediately, if and when it’s needed.
Two nations which are not members of the IEA,
India and China, have in recent years ploughed
funds into their own SPRs. The Chinese in
particular have ambitious plans. A diverse array of
storage locations, dotted across the land will, it is
hoped, eventually store almost as much as the
Americans in a combination of state-owned
facilities and commercial stockpiles. The Chinese
don’t have the luxury of salt caverns and have to
opt instead for much more expensive storage
above ground in tanks. They’re easy to spot on
Google Earth and in satellite photos – just look for
the rows of large white dots. The SPR site in
Zhenhai is just one of these and it currently holds
its full capacity of 33 million barrels. “It was big,”
says Young, who visited the location a few years
ago. “What you see is a whole load of oil tanks
co-located with a couple of oil refineries.”
No modern superpower is complete without a
Strategic Petroleum Reserve to call its own
Narongpand Lisapahanya, an oil and gas analyst at
investment group CLSA, says that spending money
on developing an SPR is all part of China’s plan to
be treated seriously as a global superpower. “If
you’re going to be a superpower, you’re going to
have to have the reserve,” he says with a laugh. “It
helps you become part of treaties globally. If
another superpower, during energy events, asks for
a release of reserves then China can now take
part.”
No modern superpower, then, is complete without
an SPR to call its own. While the growth of
reserves around the world is generally welcomed,
there are some who worry that countries outside
the IEA could use their reserves to manipulate
global oil prices by selling off stocks at opportune
moments. Of course, mitigating nasty price spikes
is exactly why SPRs were invented in the first
place, as Carmine Difiglio at the US Department of
Energy explains: “Protecting the US economy from
sharp increases in domestic petroleum product
prices was the purpose of the SPR in 1975 and it
remains the purpose of the SPR today,” he says.
But there’s an important line to draw between that
and using an SPR for ad hoc manipulation of the
world’s markets. On this point, Martin Young is
emphatic: “The oil stocks are not there for price
management as such,” he explains, “they’re there
to correct a shortage in the market because of a
supply disruption.”
There’s a continual debate about how SPR stocks
should be used, though. Some people think
releases could be more aggressive while others
question whether the US has always taken full
advantage of its SPR oil, which is valued at
roughly $43.5bn. “For some folks, 700 million
barrels in the ground just looks like a gigantic pot
of money,” comments Sarah Ladislaw, at the Center
for Strategic and International Studies in
Washington DC.
The US oil reserve is valued at roughly $
43.5bn
Few, though, would support initiatives to
fundamentally change how SPRs are used – in the
US or elsewhere. The emphasis is definitely on
planning for emergencies and mitigating supply
problems. Governments and the IEA prepare for
such situations by working out how they would
draw oil from SPRs in the event of a crisis. There
are even specialist firms which help with this sort
of planning, such as EnSys, which has developed a
sophisticated computer model to simulate future
pricing fluctuations in the oil industry.
This expertise helps EnSys to advise groups which
control SPRs as to when and why they might
consider distributing oil to local refineries. As CEO
Martin Tallett explains, it’s a numbers game. By
how many barrels will your imports be short
during a given crisis? How much would have to be
released from an SPR to ease that?
As governments continue planning for the
worst, oil stockpiles only look set to get
bigger and bigger
“What we would do is sit down with somebody and
say, OK, there’s disruption in the Middle East,
maybe North Africa as well,” he says. “And we
really start from the numbers rather than spending
a lot of time understanding in-depth the
geopolitical machinations that could have caused
the disruption.”
As governments and energy bodies continue
planning for the worst, oil stockpiles only look set
to get bigger and bigger. It’s obvious that the US
and many other countries believe their SPRs are a
good investment.
Despite all the preparations, it’s still possible that,
during a future crisis, oil might not be distributed
quickly enough from the strategic reserves. Would
we get a repeat of 1973? Bob Corbin, for one,
won’t say: “I wouldn’t want to speculate on what
could or could not occur,” he comments. “We’re
prepared to deliver whenever we need to.”

http://www.bbc.com/future/story/20150921-why-the-us-hides-700-million-barrels-of-oil-underground

i dont trust uSA for anything..

Na WA Oo..

AMERICA wants to control the entire world..
One day, oil will dry up.. America knew this..
America will pride herself as the only hope..
Ongoing Plans to control the whole world under the One-world government rule by an Anti-christ.

Dolars as the only currency, while English lang. as world official language..

If we try that in Nigeria, one day a corrupt politician will sell all the oil and store the money in one foreign bank for himself

National Security is not just about the Military but also Economic Security. Just one of the more reasons why US is such a powerful country. They are largely self-sufficient.

I just read it recently that the US GDP is driven by 80% local consumption. Meaning, if the rest of the world were to suddenly go into oblivion, it would only have a 20% impact on US GDP. Impressive!

Macelliot:
AMERICA wants to control the entire world..
One day, oil will dry up.. America knew this..
America will pride herself as the only hope..
Ongoing Plans to control the whole world under the One-world government rule by an Anti-christ.

Dolars as the only currency, while English lang. as world official language..

but english doesn't belong to the americans,so why would they want to make it the official language of the world?

Macelliot:
AMERICA wants to control the entire world..
One day, oil will dry up.. America knew this..
America will pride herself as the only hope..
Ongoing Plans to control the whole world under the One-world government rule by an Anti-christ.

Dolars as the only currency, while English lang. as world official language..

Aren't you people tired of telling the same lies over and over again for more than 2000 years? Anti-christ ko, Uncle-christ ni. Jesus is coming soon, so you say, is 2000 years no yet soon?

simpleseyi:


Aren't you people tired of telling the same lies over and over again for more than 2000 years? Anti-christ ko, Uncle-christ ni. Jesus is coming soon, so you say, is 2000 years no yet soon?

No one knows the day, nor the hour, not even the angels.. That hour shall be un-expected.. That hour, people will no longer believe in him anyone just like you did.