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Why the US stores 700M barrels of oil underground
- static_noise 11y agoDon't think of it as 700 000 000 barrels. Think of it as 0.13 years of oil for the USA alone or 0.02 years of oil for the World.
- pestaa 11y agoOr think of it as X years of oil for the USA military (where I don't know X).
- olewhalehunter 11y agoOr several decades worth of oil for our cyborg overlords.
- Toenex 11y agoOr 1 million of our brave, cyborg killing, wind powered, polymer constructed, automated freedom fighters.
- olewhalehunter 11y agoOr infinite eons of entropic sex toys for the post eschaton neuro-orgey.
- irl_zebra 11y agoPlease don't try to turn this place into Reddit with comment chains like this...
- 3princip 11y ago>largest of the four, near the tiny city of Freetown, Texas A little weird that I cannot find a "Freetown, Texas" using Google. I like to look at places on a map when they are mentioned in articles. Maybe they got the name wrong, or is it so small it's not on the map? Or I'm using Google wrong :)
- jzwinck 11y agoIt's Freeport, not Freetown: http://energy.gov/fe/services/petroleum-reserves/strategic-petroleum-reserve http://energy.gov/fe/services/petroleum-reserves/strategic-p...
- westi 11y agoThey mean Freeport, Texas - https://goo.gl/maps/pvJRM5XHWiL2 https://goo.gl/maps/pvJRM5XHWiL2
- coldcode 11y agoFreetown I believe is the capital of Sierra Leone.
- jacobolus 11y ago> But there’s an important line to draw between that and using an SPR for ad hoc manipulation of the world’s markets. On this point, Martin Young is emphatic: “The oil stocks are not there for price management as such,” he explains, “they’re there to correct a shortage in the market because of a supply disruption.” Strategic reserves can absolutely also be used as an offensive economic weapon, however. As one example, when Salvador Allende became President of Chile in the early 1970s and nationalized Chilean copper mining, the US dumped >250,000 tons of copper from its strategic reserves onto the world market, crashing the price, in a (quite successful) attempt to destabilize the Chilean economy, which was heavily reliant on copper exports. Of course when that still didn’t lead to Allende’s downfall, plan B was a CIA-sponsored military coup.
- Shivetya 11y agoI am not beyond believing that the current gutting of oil prices was done at the US's behest to damage Russia. It wouldn't take too much in the way of guarantees to Saudi Arabia to have them swamp the markets. Far more effective than military intervention.
- retube 11y agoSorry but that's nonsense. It's a well known and indeed publically admitted strategy by the Saudi's to drive US shale producers out of business. Google "saudia arabia united states oil price" for many authoritive hits on the subject. Russia was collateral damage.
- Scarbutt 11y agoCome on, are all those US shale producers really that dumb? they knew that if they started flooding the market they just wouldn't be able to compete, the U.S doesn't care much about all those small shale producers when it has bigger fish to fry.
- ghshephard 11y ago"Small Shale Producers?" We're talking about 49% of total US crude oil production. http://www.eia.gov/tools/faqs/faq.cfm?id=847&t=6 http://www.eia.gov/tools/faqs/faq.cfm?id=847&t=6
- ZeroGravitas 11y agoThe use of "hides" is a bit clickbaity, if they said "stores" then people would have thought it a perfectly reasonable thing to do.
- steve19 11y agoNot just clickbaity but factually incorrect. There are right there for everyone to see (from Google Maps) ... https://www.google.com/maps/place/Bryan+Mound+Strategic+Petroleum+Reserve/@28.9170944,-95.3769125,1289m/ https://www.google.com/maps/place/Bryan+Mound+Strategic+Petr...
- drzaiusapelord 11y agoIt has its own webpage at the DOE. Some secret. Sadly, HN often falls for click-baity articles with an anti-US or conspiratorial spin to them. http://energy.gov/fe/services/petroleum-reserves/strategic-petroleum-reserve http://energy.gov/fe/services/petroleum-reserves/strategic-p...
- DinkyG 11y agoThere's no shortage of conspiratorial comments and posts about Russia and China on HN either. There's something about conspiracies which captures our imagination but there needs to at least be some basis in the facts.
- to3m 11y agoLooks like the BBC left their work experience students in charge of the clickbait department. Let's see true professionals at work: http://www.bloomberg.com/news/articles/2015-09-17/even-a-slowing-china-is-oil-s-best-defense-against-deeper-slump http://www.bloomberg.com/news/articles/2015-09-17/even-a-slo...
- Animats 11y agoOf course China is buying now. Oil is cheap. Good time to stock up. The price of oil is not conspiracy driven at the moment. It used to be, back when OPEC had more control. Now that everybody has fracking technology, supply exceeds demand, and OPEC can't do much about the price. For an overview of OPEC (mostly Saudi) thinking on this, see [1]. [1] http://business.financialpost.com/news/energy/saudi-arabia-was-worried-about-a-danger-much-bigger-than-shale-when-it-blindsided-oil-markets http://business.financialpost.com/news/energy/saudi-arabia-w...
- junto 11y agoWhen my Uncle worked out in China about 15 years ago, a local dignitary was giving him a tour of the local area. He noticed what looked line capped oil wells in the fields. When he asked what they were the official confirmed that they contained oil, which "we will only start using once we can't buy anymore from anyone else". I've never heard of China having their own oil fields so I assume that there was something lost in the translation but regardless, it was an interesting insight into the Chinese psyche.
- stephen 11y agoCharlie Munger has mentioned the same "use theirs first" approach: "The imported oil is not your enemy, it's your friend. Every barrel that you use up that comes from somebody else is a barrel of your precious oil which you're going to need to feed your people and maintain your civilization." http://seekingalpha.com/article/1631292-charlie-munger-thinks-oil-is-absolutely-certain-to-become-incredibly-short-in-supply http://seekingalpha.com/article/1631292-charlie-munger-think...
- lukeschlather 11y agoThe disingenous (or ignorant) thing about that sort of thing is that it makes no mention of alternative fuel prices. Coal and natural gas can be refined into gasoline. This is obviously not a great idea from an environmental standpoint, but from a cost standpoint it becomes economically viable when oil hits about $70/barrel. Electrolysis-refined hydrogen becomes economical when oil hits $200/barrel, and that has a lot of environmental benefits. I would bet if oil stayed over $120/barrel for several years the economic incentives would kick in and someone would find a way to make hydrogen cost-competitive, probably even eventually bringing the cost down so it's similar to current oil prices. http://www.greencarcongress.com/2014/06/20140609-lux.html http://www.greencarcongress.com/2014/06/20140609-lux.html
- TheCowboy 11y agoIt seems more than optimistic to put the cost at $70/barrel for coal liquefaction, and it makes me question the validity of the source. It's an energy intensive process that is usually seen as much higher than $70, and the alternative economic uses of the energy used in production are usually going to be better. Not only do you still have to spend energy mining and transporting coal, but the energy spent refining the coal is immense compared to what refinable products you get out of it. There is also market evidence where people are more willing to put their money into technological development of fracking than liquefaction. It's best to be suspicious whenever a source suggests that coal liquefaction, and other processes like it, are that simple. A good book on the topic is Oil 101 by Morgan Downey.
- walod 11y ago> “Periodically when caverns are empty you can actually shoot sonar images of the caverns,” says Corbin. “And that gives you a three-dimensional way of looking at them.” Some have interesting shapes, he adds. The outline of one chamber, for example, would resemble a large flying saucer. Mm yes this is a conspiracy theory waiting to happen
- WaltPurvis 11y agoTwo quick comments: "Hides" is a stupid word. It's not hidden; it's well-advertised. The reporter calls it "expensive" because it costs $200m/year. That's not expensive, that's ridiculously cheap insurance; it's surely one of the most cost-effective government programs in existence. (I stopped reading at that point.)
- static_noise 11y agoIt's an insurance and once it is really needed it will be worth more than all dollars combined. In my opinion the amount of stored oil is ridiculously low with about 8 days of world oil consumption. It can only be used to iron out minor hiccups on the world production or to power the US military and US emergency food supply for some time. Is this reporter telling us that this little safety measure isn't worth that amount of money?
- dingo_bat 11y agoI think it would make sense to compare the barrels with US demand and not global demand. I couldn't find a good recent estimate of US oil demand. Wikipedia says it was ~18M/day in 2011. That would mean about 40 days of reserves, which is pretty good, IMO.
- WaltPurvis 11y agoMore recent figures can be found here: http://www.eia.gov/dnav/pet/PET_SUM_CRDSND_K_M.htm http://www.eia.gov/dnav/pet/PET_SUM_CRDSND_K_M.htm We (the United States) produce around 9 million barrels per day, and could produce more if necessary. We import a bit more than 7 million barrels per day. We wouldn't need to replace domestic production, so the strategic reserve would cover about 100 days of lost imports. But there are few if any scenarios where we'd lose all imports -- most likely we'd lose access to only a small fraction of imports, and even that kind of shock would spike prices and thus our consumption would drop and domestic production would increase -- so the reserve can be expected to last far more than 100 days. (If we are ever in a situation where it seems plausible the reserve might be exhausted, e.g., a major global war, then extreme conservation measures will be enforced, and the discussion changes state.)
- Vexs 11y agoI always wondered how they stored the oil- salt mines are a good way of doing it I suppose. Reminds me of a certain science-y game...
- kiddico 11y ago700 megabytes is a lot of barrels....
- adventured 11y agoChina is aggressively trying to do the same thing, attempting to boost their storage to 500m barrels, and buying a lot of oil right now while it's cheap (something the US should be doing, to further bolster its 700m barrels): http://www.bloomberg.com/news/articles/2015-09-17/even-a-slowing-china-is-oil-s-best-defense-against-deeper-slump http://www.bloomberg.com/news/articles/2015-09-17/even-a-slo...
- scott_karana 11y agoNot entirely related to the US supplies, but did this stand out to anyone else? > The facility at Shibushi, for example is just off-shore. Following the catastrophic earthquake and tsunami which struck Japan in 2011, calls were made to expand the country’s oil stocks in case of crises in the future which might hamper oil distribution again. One of the most volcanically and tidally affected and nautically food-dependent nations on earth thinks it's a good idea to hold millions of barrels of oil on their coastlines?!