In response to the 1973 oil embargo, Congress created a Strategic Petroleum Reserve of up to 1 billion barrels in the Energy Policy and Conservation Act (EPCA) of 1975. In May 1978, Congress authorized expansion of the SPR's physical capacity to 750 million barrels, and in 2005 directed further expansion to the authorized size of 1 billion barrels. Congress intended the SPR to help prevent a repetition of the economic disruption that the 1973 Arab oil embargo had caused. IEA member countries, including the United States, are committed to maintaining oil stocks (inventories) equivalent to 90 days of their prior year's net imports, developing programs for demand restraint in the event of emergencies, and agreeing to participate in allocation of oil deliveries to balance a shortage among IEA members. Severe Energy Supply Interruption Emergencies

The Energy Policy and Conservation Act (EPCA, P.L. 94-163 ) authorized drawdown of the Reserve upon a finding by the President that there is a "severe energy supply interruption." Severe Domestic Energy Supply Interruption

Congress enacted additional drawdown authority in the 1990 Energy Policy and Conservation Act Amendments ( P.L. This provision authorized the President to use the SPR for domestic energy supply shortages without having to declare a "severe energy supply interruption" or the need to meet obligations of the United States under the international energy program. This authority limits SPR sales to no more than 30 million barrels over a maximum 60-day period only when the SPR inventory is above 500 million barrels. SPR Sites

The SPR physically comprises four sites, two in Texas and two in Louisiana ( Figure 1 ). The sites offer access to both marine terminals and pipeline systems needed for moving crude oil to and from the SPR. Each site consists of an underground salt dome (a naturally occurring geologic structure), solution-mined to create storage caverns. The SPR's storage capacity had expanded to 727 million barrels, and its inventory had reached nearly 700 million barrels before Hurricanes Katrina and Rita in 2005. The SPR currently holds the equivalent of 139 days of import protection (based on 2016 import data of 4.871 million barrels per day of net petroleum imports). As an alternative to appropriated funds, DOE proposed accepting transfer of a discrete portion of the royalties payments collected by the Department of the Interior (DOI) for Gulf of Mexico oil leases in the form of royalty-in-kind (RIK) oil rather than as revenues. 2014 Test Sale

The Secretary of Energy, under Section 161(g) of the Energy Policy and Conservation Act, authorized a test sale of 5 MMb to test drawdown and sales procedures at the TEXOMA facilities. Based on a 2005 SPR crude oil compatibility study, DOE agreed that the SPR could store a small percentage of heavy crude to satisfy the short-term needs of a few refineries in the event of a supply disruption. Crude oil prices also responded immediately to the release of oil from the SPR. In 2011, the price increases were thought to be largely attributable to the loss of Libyan production during the revolution in that country. The Future of U.S. Imports of Crude Oil

The ability of the SPR to supplement the domestic U.S. supply of crude oil and effectively replace imports depends on the size of the reserve as well as its drawdown capabilities.
Congress authorized the Strategic Petroleum Reserve (SPR) in the Energy Policy and Conservation Act (EPCA) of 1975 to help prevent a repetition of the economic disruption caused by the 1973-1974 Arab oil embargo. EPCA specifically authorizes the President to draw down the SPR upon a finding that there is a "severe energy supply interruption." The meaning of a "severe energy supply interruption" has, over time, been controversial. The authors of EPCA intended the SPR only to ameliorate discernible physical shortages of crude oil. Historically, increasing crude oil prices typically signal market concerns for supply availability. However, Congress deliberately kept price trigger considerations out of the President's SPR drawdown authority because of the question about what price level should trigger a drawdown, and the concern that a price threshold could influence market behavior and industry inventory practices. As a member of the International Energy Agency—a coalition of 28 countries—the United States agrees to support energy supply security through energy policy cooperation, commit to maintaining emergency reserves equal to 90 days of net petroleum oil imports, develop programs for demand restraint in the event of emergencies, and participate in allocation of oil deliveries among the signatory nations to balance a shortage.
The Department of Energy (DOE) manages the SPR, which is comprised of 62 underground storage caverns that were solution-mined from naturally occurring salt domes located at four sites in Texas and Louisiana. The 2005 Energy Policy Act directed SPR expansion to its authorized capacity of 1 billion barrels, but the SPR's physical expansion has not proceeded beyond 727 million barrels. The SPR's maximum drawdown capability is 4.4 million barrels per day, based on the capacity of the pipelines and marine terminals that serve it. Legislation restricts SPR sales to no more than 30 million barrels over a 60-day period for anything less than a severe energy supply interruption.
Congress initially appropriated funds to fill the SPR through crude oil purchases, but ended that practice in 1994. In 2000, the Department of Energy began acquiring oil to fill the SPR through the royalty-in-kind (RIK) program. In lieu of paying cash royalties on Gulf of Mexico leases, producers diverted a portion of their production volume to the SPR. The Secretary of the Interior administratively terminated the RIK program in 2009.
The DOE has conducted sales and loans of crude oil from the SPR for several different reasons. The 1990 Energy Policy and Conservation Act Amendments expanded SPR drawdown authority to include responding to short-term supply interruptions stemming from situations internal to the United States. U.S. Presidents have authorized emergency sales of SPR crude to meet IEA obligations during the 1990 Persian Gulf War, in the aftermath of Hurricanes Katrina and Rita in 2005, and after a prolonged disruption of Libyan crude in 2011. In addition to these emergency sales, the Department of Energy has released oil, from time-to-time, to test the SPR system and make loans to help refiners bridge temporary supply disruptions, and has sold oil at the direction of Congress to generate revenue for budget deficit reduction.
The 30.64 million barrel SPR sale in 2011 reduced the SPR's inventory from 726.6 million barrels to 695.9 million barrels. The SPR currently holds the equivalent of 139 days of import protection (based on 2016 data of 4.871 million barrels per day of net petroleum imports).