Why the United States saves millions of barrels of oil underground

There are no new deposits, wells explored or exploration.

In fact, crude oil was taken and kept meticulously year after year.

It is the strategic oil reserve of the United States, the largest oil field in the world for emergency situations and which, these days, is again showing its importance.

And Sunday, President Donald Trump has authorized, for the fourth time in its history, the use of reserves to avoid an oil crisis after the attacks on Saudi refineries.

"On the occasion of the attack against Saudi Arabia, which could have an impact on oil prices, I authorized the release of oil from the strategic reserve, if necessary, an amount to be determined sufficient for the markets to be well supplied, "he wrote. Twitter

Last Saturday, a coordinated drone attack hit the facilities of the world's largest oil company Aramco, which led it to cut production by more than half.

The unexpected reduction in a country that exports 5% of the world's oil consumption has set the markets in turmoil and has pushed the world oil price down by more than 10%.

Uncertainty caused the Dow Jones Industrial Average to fall by more than 165 points, fearing that the price increase could not be sustained despite promises by OPEC and Russia to increase production.

As a result, Trump's decision to use oil funds stored on the shores of the Gulf of Mexico when needed was seen not only as a strategy to contain a possible increase in fuel consumption, but also to calm the markets.

But what are these reservations and why are they so important to the United States?

A country and its oil

According to BBC Mundo Jorge Piñón, director of the Energy Program for Latin America and the Caribbean at the University of Texas, the origin of the reserves must be sought in another crisis also originating in the Persian Gulf.

Then, in 1973, it was not an attack that almost left the United States. without oil

"What happened is that Arab countries have blocked the export of crude oil to the West because of the support that the United States and others have brought to Israel this has created a very delicate situation, given the US dependence on oil, "recalls Piñón. .

In October 1973, Syria and Egypt were engaged in the so-called Yom Kippur War against Israel, in which Jews enjoyed support from the United States and other countries, such as the Netherlands.

The Arab countries, in retaliation, decided to reduce their exports to the West.

The war lasted only three weeks, but the embargo lasted until March 1974, which resulted in a fourfold increase in the price of oil in the world: it went from about $ 3 to nearly $ 12 per barrel.

According to historians, this was the first global oil crisis.

The global economy has been hit hard and the United States has not fled.

Life has become chaotic in the emerging cities that began to be born after the Second World War: millions of people had to line up at the gas stations and much of the American industrial infrastructure, based on the principle of cheap fuel, began to be threatened. .

The impacts are felt until many years later, and in 1975, three days before Christmas, President Gerald Ford then signed a law to create the first crude oil emergency depot American. For exceptional cases.

Thus was born the Strategic Reserve whose importance since then was such that only the President of the United States has the power to authorize the use of the oil that is preserved there.

In the Gulf of Mexico

According to Piñón, the reserve is stored at four locations in the Gulf of Mexico, each located near a major refining and petrochemical processing center.

They are located near Freeport and Winnie, Texas, and outside of Lake Charles and Baton Rouge, Louisiana.

"These are artificial caverns created in salt domes below the surface," he says.

The huge warehouses, each made up of a network of caverns, were located between 500 and 1,000 meters below sea level, making the storage of oil in tanks on the surface more economical and, moreover, safer. : The chemical composition of the salt and the pressure prevent the oil from sinking.

Each cavern has an average size of 60 meters in diameter and a capacity of 6 to 37 million barrels.

According to data from the US Department of Energy, these stores currently contain 645 million barrels, although the maximum storage capacity is slightly higher: 713.5 million.

According to official data, Americans used an average of 20.5 million barrels of oil per day in 2018, which means reserves could keep the country in business for about 31 days.

However, once the president has authorized the use, oil reserves can take up to 13 weeks to reach the markets.

Reservations (d) effective?

To date, US presidents have authorized the use of reservations on rare occasions.

The last took place in 2011, when the Arab Spring uprisings brought the member states of the International Energy Agency to release a total of 60 million barrels to ease the interruption of the Global oil supply.

Earlier, in 2005, its use was also ordered after Hurricane Katrina devastated US oil infrastructure. along the Gulf of Mexico.

Its first use took place in 1991, when the United States attacked Iraq as part of the Desert Storm operation.

However, the utility of maintaining such large reserves at a time when US energy production is booming has been questioned in recent years.

"The United States is currently the largest producer of crude oil in the world, producing 12 million barrels a day, compared to 11 million barrels a day in Russia with and with Saudi Arabia. 39, they should be maintained reserves, "said Piñón.

A report from the 2014 Government Accountability Office suggested removing the oil to lower fuel prices. In 2017, the Trump administration then decided to sell half of the reserves to help reduce the federal deficit. .

However, an idea that has re-thought this idea is that the country must still import crude oil: an average of 9 million barrels per day.

"The problem is that although the United States now produces a lot of the oil that they consume, they still import crude oil and we face potential risks, even those that we do not Imagine not, because it happened with the drones, a totally new threat, "Piñón said.

BBC