Strategic Petroleum Reserve
Strategic Petroleum Reserve | Conversations with T. Boone Pickens
T. Boone Pickens I really feel like I am helping do something for this country. When you get down to it, it’s very, very simple. This is all about us.
Brian Bradshaw Hi, I’m Brian Bradshaw. I’m here with Boone Pickens, part of an on-going series of educational videos about energy. Boone, thank you for being with us; we appreciate it. Today, we’re gonna talk about the strategic petroleum reserve, or the SPR, as it’s commonly referred to. I’ve heard you talk about this before.Can you, can you give us a little background about it and kinda what, what role it’s supposed to serve.
T. Boone Pickens Well, you remember the Arab embargo in 1973 and shutdown oil from OPEC’s what it amounted to. And that caused the SPR. I think that was ‘73. Then a law was
developed in the United States. And we’re gonna store 750 million barrels of oil. It’ll take a long time to get it into storage, but we’ll start to do it. And we would do it in salt caverns in Louisiana and Mississippi. We had good place to store it. It was safe there and rather easy to do. The government’d buy the
oil, put it into storage. Well, that happened from ’73 now 2013. We have 40 years has passed. The law was developed. It was carried out. It was to be used at, at times of emergency when
oil wasn’t available to the United States. Well, when you go back over that 40-year period, that there was only one time that we really had oil shut down, which was Desert Storm, 1991. The world was using
65 million barrels a day. And we had 5 million barrels that was shut off at that point. Okay, how much did we use during that period out of the SPR. We took 17 million barrels total. Not a day, but total out of the SPR. We have 750 million in there. So, that was the greatest one-time removal. Now, we did over, I believe the number’s 28 million barrels is all we have ever taken out of the SPR. Now Katrina, we had to take some oil, but it’s never, it’s never been the fear that we had after the Arab embargo has … we’ve never had that problem. My question is that look, this is a law 40 years old. We have 750 million barrels in storage today. We don’t need that. The production in the United States has come up the last three years by two million barrels of oil a day. And we have oil in Alaska that we talked about in a prior segment. But the … but here you are ah, I’m saying it’s time to discuss the SPR. Decide what you want to do with it. But, I can assure you that you could draw down half of it and it would not change anything. So, we have really a dead asset sitting in the ground that ah, that maybe we ought to consider taking it out and monetize it.
Brian Bradshaw We don’t have price controls. So it kind of begs the question, is the SPR still relevant?
T. Boone Pickens Exactly. It, it … there’s no ah question it is time to look at it. Look at it. Decide what you want to do with it.
Brian Bradshaw Given that the world uses 90 million barrels a day, we’re in a
global oil market. If something really catastrophic were to happen to the price of oil, for whatever reason, is this kind of a false sense of security? Would it
really be able to protect us against a price spike?
T. Boone Pickens No, I don’t think it would. But I do also think I'd, if say something happened to Iranian supply, which is about four million barrels a day, that you could
supply the world that four million barrels out of SPR for a period of time. I mean you do have the flexibility um of …that nobody else in the world has, having
750 million barrels in storage. Do I want to keep it at 750? I don’t think so. But I think it’s time to look at the SPR [00:06:00] and decide what you want to do
Brian Bradshaw And so the country has actually got a lot of money made in this. And in the average price of the barrel of oil in the SPR is …
T. Boone Pickens Twenty-eight, $28 a barrel.
Brian Bradshaw So it dramatically lowers. So we’ve got a lot of money made just sitting there. Um, what would your recommendations be, I guess if you were to pull some money
out of this?
T. Boone Picke