The Politics Of The Strategic Petroleum Reserve: A Comprehensive Review

Authored by Robert Rapier via OilPrice.com,

• The SPR began to be filled during President Carter’s term, with President Reagan making significant contributions and leading the SPR level to reach 560 million barrels by the end of his two terms.

• Presidents Clinton and Obama depleted the SPR to combat high gasoline prices, with Obama leaving the reserve at 695 million barrels at the end of his term. 

• President Biden has drawn down the SPR by 266 million barrels in his first two years, and has announced the most aggressive SPR drawdown in history, largely in response to rising gasoline prices and the invasion of Ukraine by Russia.

The U.S. Strategic Petroleum Reserve (SPR) was established in December 1975 in the wake of the 1973 OPEC oil embargo. The law establishing the SPR said it was designed “to reduce the impact of severe energy supply interruptions” such as that caused by the embargo.

The U.S. government began to fill the reserve in the late 1970s. At its high point in 2010, the level reach 727 million barrels. At present, it stands at 347 million barrels, the lowest level since August 1983.

President Trump has repeatedly claimed that he “filled up” the SPR, but Biden has “virtually drained” it. In 2022, after President Biden announced the largest SPR release in history, Trump issued a statement:

“So, after 50 years of being virtually empty, I built up our oil reserves during my administration, and low energy prices, to 100% full. It’s called the Strategic National Reserves, and it hasn’t been full for many decades. In fact, it’s been mostly empty.”

I addressed this claim at the time, but I thought it might be interesting to look at the history of the SPR, highlighting the volume changes during each administration. All data can be reviewed at the Energy Information Administration’s website (data link).

The SPR began to be filled in 1977, which was the first year of President Carter’s term. By the time Ronald Reagan was inaugurated, the SPR level had been filled to about 108 million barrels.

President Reagan made it a priority to fill the SPR. During his first term, he added 343 million barrels to the SPR, with another 109 million barrels added during his second term. By the time President Reagan left office, the SPR level had reached 560 million barrels. No other president would come close to the 452 million barrels that were added during President Reagan’s two terms.

Change in the Level of the Strategic Petroleum Reserve by President ROBERT RAPIER

The fill rate declined considerably during the term of President George H. W. Bush, with only another 15 million barrels being added by the time President Clinton took office. This was in part due to the first substantial release from the SPR during Operation Desert Storm. But the overall capacity of the SPR was also lower then, and that may have also been a factor in the slower build during Bush’s term.

President Clinton would be the first President to aggressively use the SPR to attempt to fight high gasoline prices. Politicians would begin to make a habit of calling for SPR releases ahead of elections, because high gasoline prices get politicians thrown out of office. During President Clinton’s first term, the SPR was depleted by 9 million barrels, and another 25 million barrels were sold from the SPR during his second term.

Following the terrorist attacks of September 11, 2001, President George W. Bush announced that the SPR would be filled to its capacity. He said “The Strategic Petroleum Reserve is an important element of our nation’s energy security. To maximize long-term protection against oil supply disruptions, I am directing the Secretary of Energy to fill the SPR up to its 700-million-barrel capacity.”

President Bush would add 135 million barrels to the SPR during his first term, and another 26 million barrels during his second term. By the time Barack Obama was inaugurated, the SPR level would be at 702 million barrels.

During the first two years of President Obama’s first term, the level of the SPR grew to 727 million barrels — the highest level to date. But as his second presidential campaign was facing headwinds from rising gasoline prices, President Obama would go back to the Clinton playbook of using the SPR to curb gasoline prices.

During President Obama’s first term, the SPR was depleted by 7 million barrels. But from its peak the SPR was reduced by more than 30 million barrels by the end of Obama’s first term. President Obama’s second term saw less activity in the SPR, with the level decreasing by only another 200,000 barrels.

President Donald Trump inherited an SPR with a level of 695 million barrels. For each of his first three years in office, the level of the SPR declined. By the end of 2019, the level had fallen by 60 million barrels to 635 million barrels.

But then on March 19, 2020, President Trump directed the Department of Energy to fill the SPR to maximum capacity to help support domestic oil producers during the Covid-19 pandemic. Funding was blocked by Congress, but 2020 did see a slight increase in the SPR to 638 million barrels. However, President Trump became the first Republican president in the history of the SPR to see a net decline in the SPR volume during his term.

President Joe Biden inherited an SPR at 638 million barrels. However, first in response to rising gasoline prices, and then as a result of Russia’s invasion of Ukraine, President Biden announced the most aggressive SPR drawdown in history. During his first two years in office, the SPR was drawn down by 266 million barrels. So far in 2023, another 25 million barrels have been sold from the SPR.

Weekly U.S. Ending Crude Oil Stocks in the Strategic Petroleum Reserve ROBERT RAPIER

Thus, President Reagan was the champion of SPR fills, and President Biden is the champion of SPR depletions.

Overall, with the exception of President Trump, Republicans have increased SPR levels during their terms.

Democrats, with the exception of President Carter, have decreased SPR levels.

Add it all up, and Democrats after Carter drew the SPR down by 306 million barrels, and Republicans increased the SPR by 571 billion barrels.