House Republicans put forth their budget reconciliation proposal this week, and the energy section contains a provision to appropriate $1.54 billion for refilling and repairing the Strategic Petroleum Reserve (SPR). The proposal would also cancel a planned sale of 7 million barrels slated for fiscal years 2026 and 2027. 

The release of the proposed appropriation comes a few days after Energy Secretary Chris Wright said in an interview with Glenn Beck on Blaze TV that former President Joe Biden and the Democrats, by rapidly draining the SPR to gain votes in the 2022 midterm elections, had done costly damage to the salt caverns that hold the stockpiles of oil. Refilling it, he said, would take 4–6 years, but doing so is a matter of national security.  

“We are dead-set committed to do it,” Wright said. 

Changing of the guard

The SPR has been managed by Fluor Federal Petroleum Operations since 2013. The contract was for five years, with an option to extend the contract by another five years. 

In April, the DOE announced it had awarded a $1.4 billion contract to Strategic Storage Partners, LLC to manage and operate the SPR. After a transition period, according to the DOE, Fluor will hand over operations to Strategic Storage Partners.  

The selection of Strategic Storage Partners raised some eyebrows. Patrick De Hann, head of petroleum analysis at GasBuddy, pointed out in a post on X that the company had won a large contract but had “virtually no history.” 

The DOE announcement stated that the company had submitted its proposal in partnership with two primary joint venture partners, Aptim Federal Services, LLC, which is headquartered in Baton Rouge, Louisiana, and BWXT Technical Services Group, which is headquartered in Lynchburg, Virginia. APTIM has experience managing oil and gas infrastructure, and BWXT has experience in complex site operations, including environmental management and facility decommissioning. 

“APTIM is honored to serve the DOE, the talented and committed SPR workforce, and the nation as the SPR fulfills its essential mission of protecting our energy and economic security. APTIM and our partner BWX Technologies will bring the experience, resources, and commitment required to deliver,” APTIM CEO Mark Fallon said in a statement. 

Using the SPR as a political tool

When Biden took office in January 2021, the SPR contained more than 638 million barrels of oil, according to the U.S. Energy Information Administration (EIA). In June 2022, following the Russian invasion of Ukraine, the average retail price of gasoline in the U.S. was nearly $4.30 per gallon. With the midterms approaching, the high cost of gas threatened to push more voters toward Republican candidates. In an effort to bring those prices down, Biden began draining the SPR. In January, when Trump took office, it held approximately 395 million barrels. It currently stands at 399 million barrels. 

On Blaze TV, Wright said that the SPR was never intended to be a political tool to create better gas prices ahead of elections. "It's for when a very bad day happens. The world literally runs on oil. If you don't have oil, you're screwed in everything you do — economics, defense, anything, healthcare. And so we created a strategic petroleum reserve for that very rainy day,” he said. 

Rainy day fund also a 'strategic middle finger'

Tim Stewart, president of the U.S. Oil and Gas Association, told Just the News that the stockpiles are America's insurance policy against global chaos.

"Think of them as a strategic middle finger to embargoes or supply-chain disruptions. It’s the same as a family that wisely socks away a few extra dollars each month into an emergency reserve or a rainy-day fund. The goal is to hopefully never to have to use it, but it lets you sleep well at night because you have it," Stewart said. 

By draining half the SPR in such a short period of time, Wright explained, Biden and the Democrats physically damaged the salt caverns where the oil is held. Wright estimated that the repairs would cost $100 million. The $1.54 billion that House Republicans are proposing for the SPR includes $218 million for these repairs. 

When Just the News asked APTIM about the damage to the salt caverns, what the repairs would entail and how long they would take, the company declined to comment. 

Salt caverns

The crude oil reserves are stored in 61 salt caverns at four sites along the Texas and Louisiana Gulf Coasts. They are 200 feet wide and over 2,500 feet deep. Salt domes are an ideal storage formation because they don’t react with the oil, and they’re self-healing. The storage sites were intended to be used for 25 years, and at one time sonic measurements estimated a total capacity of 727 million barrels. 

The multiple releases cause the caverns to deform, as does the constant geological pressure they are exposed to. The caverns are estimated to shrink by 2 million barrels per year, but according to the American Association of Petroleum Geologists (AAPG), the shrinkage could be even greater.

Purchasing large quantities of oil could increase oil prices, and the current low prices have oil companies concerned about their ability to be profitable. Stewart, with the U.S. Oil and Gas Association, said the DOE oil purchases create another domestic market, even if the oil is stored instead of used. 

"I think it helps stabilize a soft market somewhat by creating a short-term demand that wouldn’t otherwise be there. It is a good deal for taxpayers because the secretary is refilling the reserves at a reasonable price and renegotiating the terms of an insurance policy against global price shocks," Stewart said. 

Previous use of the SPR

Presidents tapped the SPR for emergency releases on three other occasions. In 2011, nearly 31 million barrels of oil were released due to supply disruptions resulting from the conflict in Libya. In 2005, President George W. Bush authorized an emergency release of 11 million barrels in response to Hurricane Katrina and its impacts on Gulf Coast refineries, which account for 48% of the nation's refining. President George H.W. Bush released 17.3 million barrels in response to 1991's Operation Desert Storm, on the basis that doing so was "part of an international effort to minimize world oil market disruptions." 

Biden’s 2022 emergency release was for 180 million barrels, and done in response to the temporary shutdown of the Keystone pipeline. That release went to ExxonMobil, Phillips 66 and Atlantic Trading & Marketing Inc.

There have been congressionally mandated "non-emergency" sales in 2021, 2022 and 2023 that drained nearly 81 million barrels. These sales have occurred every year since 2017, but in much smaller quantities, as some releases were done for testing purposes. 

It’s unclear how long repair and restocking the SPR will take, but should it take a full six years, as Wright said it might, it may be 2032 or later before the stockpiles are replenished to where they were when Biden took office.