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from the that-worked-out-just-fine-for-the-helium-reserves dept.
President Donald Trump's proposal to sell half of the U.S. strategic oil reserve highlights a decline in the biggest oil user's reliance on imports - and a weaning off OPEC crude - as its domestic production soars.
The U.S. Strategic Petroleum Reserve (SPR) SPR-STK-T-EIA, the world's largest, holds about 688 million barrels of crude in heavily guarded underground caverns in Louisiana and Texas. Congress created it in 1975 after the Arab oil embargo caused fears of long-term spikes in motor fuel prices that would harm the U.S. economy.
The White House budget, delivered to Congress on Tuesday, proposes to start selling SPR oil in fiscal 2018, which begins on Oct. 1. Under the proposal, the sales would generate $500 million in the first year and gradually rise over the following years. A release of half the SPR over 10 years equals about 95,000 barrels per day (bpd), or 1 percent of current U.S. output.
Source: Reuters
(Score: 0) by Anonymous Coward on Wednesday May 24 2017, @06:57PM (3 children)
(Score: 0) by Anonymous Coward on Wednesday May 24 2017, @07:09PM (2 children)
It takes time (oh, say, ten years) to set up the infrastructure for the smooth selling of large-scale resources.
Also, it shows a willingness to use the reserves—and that's in addition to normal U.S. output. If anything, it signals that the U.S. is going to move away from fossil fuels—sooner or later, depending on how well the Saudis play along.
(Score: 2) by bob_super on Wednesday May 24 2017, @07:28PM (1 child)
The Saudis are looking at diversifying, because their last attempt at crashing oil prices to bankrupt US fracking/Tar Sands/Iran, did cost them a bit too much, internally. and they see the progress from renewables.
The US selling reserves depresses prices a bit, which goes the same way (against Iran/Venezuela/Saudi arabia/Russia, but against fracking), but exposes the US if fracking productivity doesn't climb (fracked wells have a short lifespan).
It also helps China and Europe, as they are aggressively transitioning towards renewables regardless of oil prices, but are not there yet and still have huge oil costs.
Every developed country's economy likes cheaper oil, except maybe US/UK/Canada.
I'm not convinced the US wins the most with that move, especially since that cash will go straight to the Pentagon instead of reducing the debt...
(Score: 1) by Ethanol-fueled on Wednesday May 24 2017, @10:39PM
America isn't the only country sitting on a strategic oil reserve. [zerohedge.com]
Diversify schmersify, what we are going to see is the slow dismantlement of Saudi Arabia -- though if the weapons sales are any indication, it seems that we're passing the ball over to them in fighting bullshit wars in the Middle-East. Nobody's stopping them from attacking Yemen, for example, and we have plenty of good tools of oppression should the clerics and other extreme elements turn against the Saudi government.
Now that's something I'd like to see, since nobody has the balls to just up and nuke Saudi Arabia.