Record Oil-Reserve Sales May Have Benefited US Storage Caverns

(Reuters) — Last year's record drawdown of the U.S. Strategic Petroleum Reserve oil stocks may boost the longevity of the underground storage caverns, according to the national laboratory that monitors the four sites.

The Biden administration last year conducted a sale of about 180 million barrels of SPR oil, the biggest release ever, to curb energy prices that spiked after Russian's invasion of Ukraine. SPR storage is near a 40-year low, holding about 367 million barrels, about half its full capacity.

Sandia National Laboratories, which monitors the health of the salt caverns, said the use of fresh and brackish water to push the oil out and maintain the integrity of the caverns did not damage the site and may have lengthened their lifespan.

"Some of the cavern shapes have improved from the large influx of raw water, which may allow for an extension in cavern lifetime," said Anna Lord, geosciences engineer at the Sandia National Laboratories.

"There have been no major impacts to the caverns," wrote Lord in response to Reuters questions on the state of the caverns. The raw water can smooth the internal features by removing older, rough walls, she added.

Republicans have raised concerns that the sales could have damaged the facilities and make refilling more difficult. The Biden administration has vowed to refill the stocks when oil prices fall to between $67 and $72 per barrel and planned repairs are completed.

Oil was trading on Wednesday at about $74.35 per barrel.

Smoother walls will improve the Louisiana and Texas caverns long-term stability, potentially allowing more oil drawdowns, she added. The majority of the SPR sites were designed to sustain up to at least five drawdowns, she said.

Sandia's appraisal supported a Department of Energy reply this month to Republican lawmakers that the emergency sales had not damaged SPR pipelines or caverns.

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