4 ms·

At the risk of sounding stupid, I have to ask... Would it be possible to simply pump the oil back into the ground wherever the closest oil field is?

saagarjha 7y ago
That sounds like it'd get the EPA involved if you just dumped it, and I would expect that putting oil into an actual oil well is not easy.
adventured 7y ago
In an arrangement with the US Government it could be put into the ground, elsewhere. Doing it without state permission would be an entirely different matter however. I'm not aware of any very large, privately owned underground storage caverns (such that they could make a dent in absorbing the over-supply). This is being discussed: "The U.S. Energy Department is negotiating with nine companies to rent about 23 million barrels of oil storage capacity in its Strategic Petroleum Reserve as part of a Trump administration bid to help drain the country’s growing glut of crude." https://www.worldoil.com/news/2020/4/14/doe-working-to-lease-out-23-mmbbl-of-strategic-petroleum-reserve-capacity https://www.worldoil.com/news/2020/4/14/doe-working-to-lease... Here is what the US Strategic Petroleum Reserve looks like (it can absorb some of our over-supply briefly): > Four underground salt caverns on the coast of the Gulf of Mexico store the oil. That's a central location. The oil can be distributed to nearly half of the U.S. oil refineries either through interstate pipelines or via barges. It only takes 13 days for the oil to enter the U.S. market from the time the president first gives the order. > There are two cavern locations in Texas. As of September 30, 2018, Bryan Mound held 235.3 million barrels in 20 caverns. Big Hill held 153.4 million barrels in 14 caverns. The other two are in Louisiana. West Hackberry held 199.5 million barrels in 22 caverns. Bayou Choctaw held 71.88 million barrels in 6 caverns. > The maximum capacity of all four caverns is 727 million barrels. There is also a good FAQ on it: https://www.energy.gov/fe/services/petroleum-reserves/strategic-petroleum-reserve/spr-quick-facts-and-faqs https://www.energy.gov/fe/services/petroleum-reserves/strate...
- firebird84 7y ago
  Why don't we just take delivery of futures contracts directly? Isn't this a great time to fill the reserve?
  - glofish 7y ago
    it is and we do.
  - ineedasername 7y ago
    Already being done, and that space too is running out.
  - burfog 7y ago
    Pelosi blocked that. The workaround is to cheaply rent out the reserve as storage space, with the hope that someday a better congress will allow purchasing the oil.
    - joecool1029 7y ago
      >Pelosi blocked that. Why should the American people pay to fill it when they can now be paid instead to store the oil? The market's decided that the toxic asset needs to go somewhere and the speculators that bought it (not the producers) will pay. >The workaround is to cheaply rent out the reserve as storage space Cheaply? They took a risk in speculating and it didn't work out. The solution is to give them a choice: surrender their oil to the USG (to avoid paying storage fees) or pay the USG for the service of storing it. No bailouts, fuck that.
      - koheripbal 7y ago
        Bailout? It's not a bailout. Prices were negative! We'd literally be _getting paid_ to take oil and put it into our reserve. It's literally the easiest financial decision on the planet. The fact that Pelosi blocked it demonstrates a fundamental lack of understanding of basic finance.
      - 7y ago
baud147258 7y ago
Doesn't the oil just come out of the oil well from its own pressure? Which would make pumping oil back in the oil field complicated
- projektfu 7y ago
  In some places, yes, but would you see these pumps the US if that were always the case? https://youtu.be/X0Dpd52pfp0 https://youtu.be/X0Dpd52pfp0
- CydeWeys 7y ago
  There's lots of empty oil fields out there though. Many of them could hopefully be refilled just using gravity?
  - brutusborn 7y ago
    Reconfiguring wells to reverse flow is a lot of work, and would take a significant amount of time to setup. This can happen with old gas wells, excess gas can be compressed and reinjected into the well, but they are specially designed systems.
  - tomc1985 7y ago
    The US Strategic Petroleum Reserve is stored underground, surely they could build a similar reservoir
    - koolba 7y ago
      You could. Though it’d cost billions of dollars and would not be done by the time the contracts expire and deliver needs to be taken.
alextheparrot 7y ago
I love this question! Mainly because first I laughed at "But that would be silly -- we spent all this effort taking it out of the ground", but on second thought it represents a reasonable thought of "We got it from the ground, therefore the ground isn't the worst place for this stuff maybe?". In crux, thanks for asking :)
rmason 7y ago
Actually with LP gas that's a pretty common storage method in Michigan. https://www.mlive.com/news/2016/01/michigan_has_most_underground.html https://www.mlive.com/news/2016/01/michigan_has_most_undergr... Also there's some underground cave like structures East of Grand Rapids where they store fuel as well.

saagarjha 7y ago

That sounds like it'd get the EPA involved if you just dumped it, and I would expect that putting oil into an actual oil well is not easy.

adventured 7y ago

In an arrangement with the US Government it could be put into the ground, elsewhere. Doing it without state permission would be an entirely different matter however. I'm not aware of any very large, privately owned underground storage caverns (such that they could make a dent in absorbing the over-supply). This is being discussed: "The U.S. Energy Department is negotiating with nine companies to rent about 23 million barrels of oil storage capacity in its Strategic Petroleum Reserve as part of a Trump administration bid to help drain the country’s growing glut of crude." https://www.worldoil.com/news/2020/4/14/doe-working-to-lease-out-23-mmbbl-of-strategic-petroleum-reserve-capacity https://www.worldoil.com/news/2020/4/14/doe-working-to-lease... Here is what the US Strategic Petroleum Reserve looks like (it can absorb some of our over-supply briefly): > Four underground salt caverns on the coast of the Gulf of Mexico store the oil. That's a central location. The oil can be distributed to nearly half of the U.S. oil refineries either through interstate pipelines or via barges. It only takes 13 days for the oil to enter the U.S. market from the time the president first gives the order. > There are two cavern locations in Texas. As of September 30, 2018, Bryan Mound held 235.3 million barrels in 20 caverns. Big Hill held 153.4 million barrels in 14 caverns. The other two are in Louisiana. West Hackberry held 199.5 million barrels in 22 caverns. Bayou Choctaw held 71.88 million barrels in 6 caverns. > The maximum capacity of all four caverns is 727 million barrels. There is also a good FAQ on it: https://www.energy.gov/fe/services/petroleum-reserves/strategic-petroleum-reserve/spr-quick-facts-and-faqs https://www.energy.gov/fe/services/petroleum-reserves/strate...

firebird84 7y ago
Why don't we just take delivery of futures contracts directly? Isn't this a great time to fill the reserve?
- glofish 7y ago
  it is and we do.
- ineedasername 7y ago
  Already being done, and that space too is running out.
- burfog 7y ago
  Pelosi blocked that. The workaround is to cheaply rent out the reserve as storage space, with the hope that someday a better congress will allow purchasing the oil.
  - joecool1029 7y ago
    >Pelosi blocked that. Why should the American people pay to fill it when they can now be paid instead to store the oil? The market's decided that the toxic asset needs to go somewhere and the speculators that bought it (not the producers) will pay. >The workaround is to cheaply rent out the reserve as storage space Cheaply? They took a risk in speculating and it didn't work out. The solution is to give them a choice: surrender their oil to the USG (to avoid paying storage fees) or pay the USG for the service of storing it. No bailouts, fuck that.
    - koheripbal 7y ago
      Bailout? It's not a bailout. Prices were negative! We'd literally be _getting paid_ to take oil and put it into our reserve. It's literally the easiest financial decision on the planet. The fact that Pelosi blocked it demonstrates a fundamental lack of understanding of basic finance.
    - 7y ago

baud147258 7y ago

Doesn't the oil just come out of the oil well from its own pressure? Which would make pumping oil back in the oil field complicated

projektfu 7y ago
In some places, yes, but would you see these pumps the US if that were always the case? https://youtu.be/X0Dpd52pfp0 https://youtu.be/X0Dpd52pfp0
CydeWeys 7y ago
There's lots of empty oil fields out there though. Many of them could hopefully be refilled just using gravity?
- brutusborn 7y ago
  Reconfiguring wells to reverse flow is a lot of work, and would take a significant amount of time to setup. This can happen with old gas wells, excess gas can be compressed and reinjected into the well, but they are specially designed systems.
- tomc1985 7y ago
  The US Strategic Petroleum Reserve is stored underground, surely they could build a similar reservoir
  - koolba 7y ago
    You could. Though it’d cost billions of dollars and would not be done by the time the contracts expire and deliver needs to be taken.

alextheparrot 7y ago

I love this question! Mainly because first I laughed at "But that would be silly -- we spent all this effort taking it out of the ground", but on second thought it represents a reasonable thought of "We got it from the ground, therefore the ground isn't the worst place for this stuff maybe?". In crux, thanks for asking :)

rmason 7y ago

Actually with LP gas that's a pretty common storage method in Michigan. https://www.mlive.com/news/2016/01/michigan_has_most_underground.html https://www.mlive.com/news/2016/01/michigan_has_most_undergr... Also there's some underground cave like structures East of Grand Rapids where they store fuel as well.