Can the Strategic Petroleum Reserve Handle Another Major Drawdown?

A new GAO report says the U.S. Strategic Petroleum Reserve faces mounting maintenance needs and calls for a long-term strategy after years of record oil releases and aging infrastructure.

(P&GJ) — The U.S. Strategic Petroleum Reserve (SPR) has successfully supplied crude oil during major supply disruptions, but a new U.S. Government Accountability Office (GAO) report says aging infrastructure, repeated emergency drawdowns and the lack of a long-term strategy could threaten the reserve's future readiness.

According to the GAO, the SPR currently has a storage capacity of about 680 million barrels, but held less than 350 million barrels in early June following the first releases tied to the Iran conflict.

The report notes that the reserve has released more than 500 million barrels since its first emergency drawdown in 1985, with the largest releases occurring in recent years. Those include:

• 180 million barrels following Russia's invasion of Ukraine in 2022.
• A planned 172 million-barrel release in response to the 2026 Iran conflict.

In addition to emergency releases, Congress has directed the Department of Energy to sell roughly 170 million barrels from the reserve to generate revenue, with another 90 million barrels in future sales already authorized, according to the report.

GAO said those large drawdowns have placed additional strain on aging infrastructure, forcing the Department of Energy to prioritize emergency repairs while managing delays to major modernization projects.

The report points to a decade-long, $1.4 billion infrastructure project that has underperformed while maintenance needs continue to grow. GAO warned that delaying repairs could reduce the reserve's ability to safely receive and distribute crude oil during future emergencies.

"The combination of an underperforming, decade-long, $1.4 billion infrastructure project along with expected wear-and-tear have left the reserve with a growing list of needed upgrades and repairs," GAO said in the report.

According to GAO, the Department of Energy has not completed a comprehensive long-term strategic review of the SPR in nearly a decade, even as U.S. energy markets, domestic production and international obligations have changed significantly.

The report says a new long-term strategy should define:

• What the reserve is capable of today.
• What capabilities it should have in the future.
• What investments are needed to close those gaps.

"Having a long-term plan could help move beyond triaging emergency repairs to make more strategic investment decisions for the future," GAO said.

The report concludes that better alignment between Congress and the Department of Energy could improve how the Strategic Petroleum Reserve is maintained, modernized and managed while helping preserve its role as the nation's emergency crude oil supply.