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On reserve: 727 million barrels of crude oil

Eve Troeh Sep 26, 2012

On reserve: 727 million barrels of crude oil

Eve Troeh Sep 26, 2012

The Strategic Petroleum Reserve is not simply a concept. It’s a real place. Four places, in fact – two in Texas and two in Louisiana – that hold more than 700 million barrels of crude oil.

I drove up to one of them, Bayou Choctaw, expecting, well, something dramatic. But all you really see is a sign and a gate at the end of a dusty Louisiana highway. All the interesting looking stuff – the cooling towers and tall pipes with flames burning at the end – that all belongs to oil and gas companies actively producing product for market.

What belongs to the Strategic Petroleum Reserve, though, is the fleet of Land Rovers that pulls up at the first sight of you at the gate. Guards hop out in bulletproof vests, assault rifles at the ready. It takes half an hour to get through security, and the sign-in form asks you to declare your citizenship.

The oil here’s worth about $7 billion.

“No wonder we’re protecting it, right?” says Suresh Sevak, the Department of Energy site leader at Bayou Choctaw. “A lot of people even in the local area don’t know that we exist here.”

Forgive the locals for paying no mind to this epic stockpile in their back yard. They can’t see all that crude. No one can.

“Most people wonder. ‘Where’s the oil?” Sevak says. “Well the oil is underground. Not much to see above. Which is the way we like it.”

Buried deep and sealed off, the oil is easier to protect. It gets pumped down into manmade salt caverns. To picture them, first think of a cross section of the Gulf Coast’ About half a mile down are thick deposits of salt that run half a mile deeper from there. The Department of Energy drills down into the salt, and shoots in water to dissolve a huge hole, explains James Quern, director of field operations for the reserve.

“When the cavern’s ready, then we’ll take oil and push that oil into that cavern, and displace the brine back out to the gulf,” he says.

Each cavern is about twice as deep as a skyscraper is tall and holds about 10 million barrels of oil, 20 full-size tankers worth. And the oil just sits there, really – year in, year out – while contractors keep an eye on it, and test the pipes and pumps to make sure they’ll work when needed.

Danny Miller was running a small construction crew during my visit: “I think knowing that we have these kind of facilities in the United States and everything, it can put us somewhat at rest,” Miller says.

Me: “You sleep easy at night knowing we have these caverns full of oil?” 

“Well, easier than knowing we don’t have any, you know,” he answers.

Easier than, say, 1973. The oil crisis. Eleven Arab countries cut off all oil shipments to the United States. President Nixon told the nation, “We are heading toward the most acute shortages of energy since World War II.” It was not Nixon, but the next president, Gerald Ford, who signed a law to create The Strategic Petroleum Reserve, to be tapped in case of an international disruption in supply.

“It was like, ‘Oh, my god,'” says Sam Washington, a Department of Energy engineer at Bayou Choctaw. “We can’t let this happen again. We’re going to get us a reserve.”

Watch a short video animation to see how the Strategic Petroleum Reserve works.

He shows me the maps, with dots and lines running from Strategic Petroleum Reserve sites to nearby oil refineries, then to bigger pipelines all the way up to Detroit.

The reserve is a sleepy place to work, compared with its neighbors. Oil, gas and chemical refineries rise like science fiction castles all around it. But when the President calls to release oil, like he did last June, or refineries need to borrow oil in an emergency like after Hurricane Katrina, all eyes are on Bayou Choctaw.

“We roll with it,” says Robert Templet, a pump foreman. I ask him if it’s a good day when you get that call. “I like it,” Templet says. “You know if they tell me to draw down right now, I’m ready. I love running the pumps. That’s just me, I’m a pump man.”

You know who else gets really really excited? Oil traders. “As soon as they announce a release, just seconds later prices will start to plummet,” says Blake Clayton. He follows oil for the Council on Foreign Relations. “If you had anticipated that, you’d be in a really good spot.”

Even though, honestly, it’s not that much oil. Even the 30 million barrels released from the strategic reserve last year is about what America uses in a day. After the initial trading frenzy from a release, it dawns on oil traders that the government did that for a reason. A strategic release means something’s wrong.

“It can actually instill greater fears in traders about where supply and demand are,” Clayton says.

Beyond the armed guards at Bayou Choctaw, pipelines criss-cross the marsh. White ibis and egrets feed and groom. A baby alligator lazes in the water. Site supervisor Suresh Sevak likes it out here, thinking about the vast pools of oil below. But he says it’s foolish to think the reserve could bring down gas prices for very long.

“The days of cheap oil are gone,” Sevak says. “We’re not going to see that anymore.”

The point of the Strategic Petroleum Reserve, and his job, isn’t to make sure oil is cheap. It’s to make sure there’s oil at all.

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