Posted On: Friday - October 20th 2023 9:16AM MST
In Topics:   History  Preppers and Prepping  Economics  US Feral Government  Zhou Bai Dien
No, no, this post is NOT a movie review. I believe you're thinking of Strategic Air Command*.
This is the West Hackberry SPR site, about 25 southwest of Lake Charles, Louisiana.
If you can't remember the Convair B-36 nuclear bomber and Strategic Air Command of the 1950s, you may remember OPEC and the Strategic Petroleum Reserve of two decades later. The latter two are still around, after ~ half a century.
A half century ago today (yeah, it's an even number) Americans'
The OPEC countries had nearly a monopoly, at least of American imports, as the world was used to their easily pumped cheap oil. What galled some Americans was that these Arabs would never have, and STILL never have, figured out how to pull this black gold out of the ground without help from Western engineers and such, yet they were in luck to be sitting on top of that, errr, Texas Tea. As former vassals of the West, the Sheiks realized the economic power they had and squeezed us.
I'm going to venture to say that America's having had recently ditched sound money had something to do with the changes. The US Dollar reserve currency did not quite have the power it had when it was backed by REAL MONEY, i.e. gold. We had to find out the real price of oil, and it hurt for a while.
The US Congress passed a law in 1975 establishing the Strategic Petroleum Reserve to eliminate, or at least cushion, short-term oil price "shocks". "$4.50 a gallon?! I am SHOCKED, SHOCKED, that gambling is going on around here!" (Yeah, had to get that famous movie reference in -you'd be shocked, shocked if I hadn't.***) Now, as a Libertarian, I could go on about the Feral Gov't messing with the market, but seeing as international relations kind of screw with the free market in this commodity anyway, this, to me, was a damn good idea, a strategic weapon of economic war.
To hold reserves of crude oil, huge salt caverns in Louisiana and east Texas are used - 2 in each - with a total capacity of 3/4 of a Billion barrels****. At current use levels, that's about a 4 month supply. From this US Dept. of Energy site, this is interesting:
Strategic Petroleum Reserve caverns range in size from 6 to 37 million barrels in capacity; a typical cavern holds 10 million barells and is cylindrical in shape with a diameter of 200 feet and a height of 2,500 feet. One storage cavern is large enough for Chicago's Willis Tower to fit inside with room to spare. The Reserve contains 60 of these huge underground caverns. These four sites have a combined authorized storage capacity of 714 million barrels.How the salt caverns are made is fairly simple - dissolve the salt precisely to make the shape desired:
Salt caverns are carved out of underground salt domes by a process called "solution mining." Essentially, the process involves drilling a well into a salt formation, then injecting massive amounts of fresh water. The water dissolves the salt. In creating the SPR caverns, the dissolved salt was removed as brine and either reinjected into disposal wells or more commonly, piped several miles offshore into the Gulf of Mexico. By carefully controlling the freshwater injection process, salt caverns of very precise dimensions can be created.Neat! The sites, Bayou Choctaw, West Hackberry, Big Hill, and Brian Mound, were developed and put on line generally from 1977 through the mid-'80s. The D.O.E. put out bids, I suppose, for the purchase of oil off the market to get started filling up this reserve. Fill it they did...
My apologies for the poor quality of this chart as viewed here. You can use a very nice interactive chart, along with a big month-by-month table with numbers to the thousand barrels, here.
Even during the era of the still very-high oil prices (2nd "oil crisis", aka inflation coming home to roost) from the start to '81, 1/8 of a billion barrels were pumped in. At those prices and times, that took a little political will and maybe a prepper mindset(?) As inflation eased, and the nice long oil glut***** started, the D.O.E. went gangbusters and the reserve was brought up to 550-590 MMbbl range in a decade, '81 to '91. One can see a slight drawdown during those Kuwaiti/Gulf War I times, but that notwithstanding, either it was figured that oil crises were forever in the past or it was just those ~600 MMbbl being close to the 714 million barrel capacity that had the reserve flat-lined for a further decade, '91 to '01.
That drop at the beginning of this century was NOT post 9/11. It doesn't look quite right, time-wise,, on my image above, and one can better see this on the source site linked to. The draw-down of the reserves was not large, from a roughly 570 MMbbl barrel level to 540 MMbbl over end-o-Sept to end-o-Dec of 2000. (What was that about? Anyone?) Post 9/11, there was a prudent steady build-up of the reserves from 550 MMbbl in Feb. of '01 to 700 MMbbl by Aug. of '05. After a slight, 15 MMbbl, drop that Fall, the level of reserves plateaued for 3 years. From '09 to '11, the level reached it's global (in the math sense) peak so far, or forever, at 726 MMbbl, above the D.O.E. stated 714 MMbbl capacity of the salt caverns. (Perhaps, the small excess was held above ground. Hell, a friend of mine's yard full of cars could hold a few barrels in their tanks - the ones not rusted to hell.) Were there vestiges of our being a prudent country still existing only 12 years ago?
That survey of what you can see with your own eyes in graphical form over with, I can be confident that the readers here have already noticed what's happened since the summer of '20. (I give readers here plenty of credit for knowing more than I, and that line at the top was a joke, of course.) The starting point was the local maximum of 656 MMbbl in July of '20 to be exact. What the heck was going on in July of '20? Hmmm? Yeah, that PanicFest was an excuse for ANYTHING, most of these things Totalitarian, stupid, or both.
What exactly would be a reason to draw down our Strategic Petroleum Reserve level during the PanicFest? Nobody was freaking driving! Furthermore, this would have been a great time to go the other way. As can be seen here, the ~$15/bbl low that April was one thing, but the crude oil price stayed in the close neighborhood of $35/bbl that whole summer and through late October. Remember that $4 Trillion spent on the CARES ACT? It was just thrown all around, everywhere.
Imagine how much oil could have been stored, were "we" to have spent 1/8 of that throw-around folding money on it? I picked 1/8 to get a nice round number of $500 Billion, which could have resulted in 14,000 MMbbl (written in same units for comparison's sake. Moar salt caverns!?? We'd have needed 20x the amount of storage. Yeah, well, as a prepper, I like it! That stuff doesn't rot, and it'd be over 6 years worth of supply, before scrimping and saving. OK, well, let's be reasonable and take only 1% of that Kung Flu PanicFest money - they'd never have missed it. $40 Billion would have gotten us 1,100 MMbbl, requiring a 60% expansion of the SPR, for a 6 1/2 month supply, enough time to pack up and bug out, were we really at Peak Oil, and with the petro-dollar in the toilet.
Yet another fun digression over with, let me get finally to the point. The point is Zhou Bai Dien and his drastic drawdown of the SPR from 637 MMbbl in Mar. '21 to 347 MMbbl end-of-this-Jul. As with lots of things, it was gradual, then sudden. The gradual part was, slightly arguably, through Aug '21. After that, it's been drastic.
Whadda' gonna do when people go as far as to put "I DID THAT" stickers on gas pumps? People say that that $4 Trillion has something to do with it, but I know, it's nobody's fault ... People are getting pissed at gas prices, so, c'mon, man, you gotta bring the price down. That's the way you do it - that oil's just sitting there anyway for I dunno what.
It IS the President, not Congress, who has the power to control the Strategic Petroleum Reserve, via his Energy Secretary, in this case the odius Jennifer Granholm. (To jog your memory, she was a blue-squad Michigan Governor 20 years back, a CNN host, and general long-term ctrl-left gadfly.) You may want to check this Forbes article out now, but I'll put up a quick post showing the changes in the SPR under the Presidents in charge.
The SPR is right at half of its fairly-near-high level of 3 1/4 years back - even Poltico writers seem concerned. How low can you go? Yes, I see that I can get gas for well under $3/gal right now. The power to mitigate price shocks is going away as these reserves get depleted though. Can Bai Dien sell just the right amount of crude into the market to keep the prices down for, let's see 1 year and 2 weeks? Have his handlers done the math? Remember math is not really the strong suit of the ctrl-left, or most anyone else these days.
* I gotta admit, I like those old bombers - especially the 10-engined (6 turning and 4 burning) B-36 Peacemaker of the 1950s and the century series (F-100 through F-106) rocket-with-wings fighter/interceptors of the '50s, '60s and a little beyond**. To foreshadow the subject of this post, let me just say that fuel economy was assuredly not an issue.
The 1955 movie featured the B-36 and the B-47.
** The F-104 Starfighter was flying into the '90s in Germany, though unfortunately in a role it was not meant for, and even into the '00s in Italy.
***. Also, there is something sort of like gambling involved in the stocking and drawing-down of the SPR.
**** Other than in excerpts, I will use the standard abbreviation bbl from here on, but with the high numbers, MMbbl for a Million barrels. There's great confusion here, as the industry has used "M" with the Roman Numeral meaning, not as a metric prefix. Doesn't "MM" mean 2 thousand then? No, it means a Million. As with saying colloquially "pounds" for psi when talking tire pressure, you can't fight this stuff once it's been engrained in the industry.
One barrel (bbl) of oil is 42 gallons. The chemical energy contained in each is 5.8 million BTUs, or for you young whippersnappers in that metric system, we're talking 6.1 Million kJ.
***** BTW, I discussed my recollections of gasoline prices over my lifetime - but only up to Sept. of '18, the posting dates - in Recent history of gasoline prices: Part 1 and Part 2.
Comments:
Moderator
Sunday - October 22nd 2023 4:05PM MST
PS: M, I agree with you that using the SPR tactically, rather than strategically, won't work for long.
Even if wasn't the Peacemaker or Stratojet, that's pretty cool, Alarmist. I saw a few of those BUFFs very recently. Thanks for the quick note about Erich Hartmann.
Mr. Anon, I had thought the same thing until I read more about these. The really neat engineering would be to design the method of water injection to make the caverns per spec - and, as per Alarmist, structurally sound. I guess when filled with oil the roofs would not be subject to collapse. Civil engineering can be pretty cool.
Even if wasn't the Peacemaker or Stratojet, that's pretty cool, Alarmist. I saw a few of those BUFFs very recently. Thanks for the quick note about Erich Hartmann.
Mr. Anon, I had thought the same thing until I read more about these. The really neat engineering would be to design the method of water injection to make the caverns per spec - and, as per Alarmist, structurally sound. I guess when filled with oil the roofs would not be subject to collapse. Civil engineering can be pretty cool.
Mr. Anon
Saturday - October 21st 2023 9:49PM MST
PS
Thanks for the tutorial on salt caverns. I am embarrassed to admit that I did not know that facilities were specifically built for the SPR. I had often heard the term "salt dome" and assumed they were just that - large hollow domes with salt walls, rather than densely packed plugs of salt that intruded upwards into overlying strata.
In short, I had assumed that the SPR oil was stored in natural formations, not man-made cavities. Thanks for setting me straight on that score.
Thanks for the tutorial on salt caverns. I am embarrassed to admit that I did not know that facilities were specifically built for the SPR. I had often heard the term "salt dome" and assumed they were just that - large hollow domes with salt walls, rather than densely packed plugs of salt that intruded upwards into overlying strata.
In short, I had assumed that the SPR oil was stored in natural formations, not man-made cavities. Thanks for setting me straight on that score.
The Alarmist
Saturday - October 21st 2023 2:50PM MST
PS
I’m old enough to have actually flown in SAC, though we had moved on to Buffs by that time. I flew RC-135s before transitioning to EC-135s, which were really pigs on hot days.
Fun fact: The worlds’ top scoring Ace, Erich Hartmann (352 kills) had his career killed by the F-104, not because it killed him, but because, as the head of the Bundesluftwaffe, he refused to buy it because he considered it a widow-maker, so the US leaned on Germany to sack him.
BTW, the problem with emptying the salt domes is that it takes a serious toll on their structural integrity, meaning that the continual emptying and refilling of them jeopardizes the future viability of the program as a whole. It’s certainly not strategic thinking to be doing this.
I’m old enough to have actually flown in SAC, though we had moved on to Buffs by that time. I flew RC-135s before transitioning to EC-135s, which were really pigs on hot days.
Fun fact: The worlds’ top scoring Ace, Erich Hartmann (352 kills) had his career killed by the F-104, not because it killed him, but because, as the head of the Bundesluftwaffe, he refused to buy it because he considered it a widow-maker, so the US leaned on Germany to sack him.
BTW, the problem with emptying the salt domes is that it takes a serious toll on their structural integrity, meaning that the continual emptying and refilling of them jeopardizes the future viability of the program as a whole. It’s certainly not strategic thinking to be doing this.
M
Friday - October 20th 2023 1:54PM MST
PS
The drawdown of the SPR is to give the Arabs more power.
One of the points of the SPR is to make market price hikes more difficult. But it's like a legion. You can threaten to flatten someone with it, and occasionally you have to (or people think you won't do it). But if you do it too often people discount it (or come up with countermeasures).
The drawdown of the SPR is to give the Arabs more power.
One of the points of the SPR is to make market price hikes more difficult. But it's like a legion. You can threaten to flatten someone with it, and occasionally you have to (or people think you won't do it). But if you do it too often people discount it (or come up with countermeasures).
Moderator
Friday - October 20th 2023 1:08PM MST
PS: "Two turning, two burning, two joking, two smoking and two not accounted for." Haha. Thanks, Fred. I'm not sure how many different engine-out procedures the crew had to learn. One engine out - do you even care?
MBlanc46
Friday - October 20th 2023 11:47AM MST
PS “It’s kind of bad strategy to just empty it”. That depends on what your objective is.
Fred the Gator
Friday - October 20th 2023 11:45AM MST
PS Apparently the array of engines for the B-36 was not the most reliable collection of hardware ever assembled. So there was another version of the "6 turning and 4 burning" mantra:
"Two turning, two burning, two joking, two smoking and two not accounted for."
"Two turning, two burning, two joking, two smoking and two not accounted for."
Moderator
Friday - October 20th 2023 11:12AM MST
PS: PS: I don't remember the B-47 either, Mr. Blanc, but there's a really good book about the 747 called "Wide Body" that starts off with the development of the B-47 as that work was used for the B-707. (oops, I just fixed a mistake - the B-47 was a Boeing product, while the B-36 was made by Convair. There were still quite a few large and very productive aerospace companies back then.
I don't remember seeing the signs, but I did look back and see that price were around 30-35 cents in those days of the 1st oil crisis. However, we didn't live in no San Francisco, so my parents' memories and maybe mine are of lower than California pricing. I do remember that they would drive around quite a bit fo save 2 cent/s gallon. As I wrote about this stuff in those 2 posts I link to at the bottom here, I don't think that pays off very well, when drive a car that gets 15 mpg!
I agree with your point on government interference in general. This SPR is, well,strategic, so it's kind of bad strategy to just empty it. When you spend and extra $4,000,000,000,000 in a couple of years to fight a ginned up Black Death 2.0, I guess prudence has long gone out the window.
I don't remember seeing the signs, but I did look back and see that price were around 30-35 cents in those days of the 1st oil crisis. However, we didn't live in no San Francisco, so my parents' memories and maybe mine are of lower than California pricing. I do remember that they would drive around quite a bit fo save 2 cent/s gallon. As I wrote about this stuff in those 2 posts I link to at the bottom here, I don't think that pays off very well, when drive a car that gets 15 mpg!
I agree with your point on government interference in general. This SPR is, well,strategic, so it's kind of bad strategy to just empty it. When you spend and extra $4,000,000,000,000 in a couple of years to fight a ginned up Black Death 2.0, I guess prudence has long gone out the window.
MBlanc46
Friday - October 20th 2023 10:51AM MST
PS I’m old enough to remember SAC, but not the B-36. My earliest memory of the US’s principal strategic bomber was the B-47. I certainly remember 1973. In the spring, in far southwestern Connecticut, I was paying $.40 a gallon to gas up my VW microbus. $4.00 for a fill-up. I don’t remember what I was paying, after queueing up for a considerable time, in San Francisco that autumn, but it was a lot more than $.40. Probably two or three times as much. As far as the SPR goes, Da People, with a little help from fortification, made Joseph Robinette Biden, Jr, president in 2020, and the president has the authority to draw on the SPR. So, if Totally Legit Joe wants to keep gasoline prices down during an election year, and if he thinks that fiddling with the SPR will accomplish that, then fiddle he will. As far as the government interfering with the economy goes, as long as the government issues the money, the government is interfering with the economy.
@Moderator
"Civil engineering can be pretty cool."
I agree. Civil always used to be viewed as what engineers did if they couldn't make the cut for Mechanical or Electrical engineering. But that of course is unfair. Civil engineering encompasses some really impressive work.
If I had it to do all over again...........
But, of course, I don't.