The Office of Petroleum Reserves manages programs that provide the United States with strategic and economic protection against disruptions in oil supplies. The programs include:
Strategic Petroleum Reserve
With a capacity of 727-million-barrels, U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned emergency crude oil in the world. Established in the aftermath of the 1973-74 oil embargo, the SPR provides the President with a powerful response option should a disruption in commercial oil supplies threaten the U.S. economy. It is also the critical component for the United States to meet its International Energy Agency obligation to maintain emergency oil stocks, and it provides a national defense fuel reserve.
At the end of December 2009, when fill to capacity was completed, the SPR held 726.6 million barrels. During July and August 2011, inventory was reduced to 695.9 million barrels after 30.59 million barrels were sold in response to sustained interruptions in global supplies due to civil unrest in Libya. President Obama authorized the sale as part of a larger coordinated release of petroleum by International Energy Agency countries.
Naval Petroleum and Oil Shale Reserves
The Naval Petroleum and Oil Shale Reserve (NPOSR) has a storied history beginning with its inception in 1912 during the Taft Administration, to the 1998 sale of its supergiant Elk Hills oil field (Naval Petroleum Reserve No. 1) to Occidental Petroleum under the Clinton Administration. The infamous Teapot Dome scandal in the 1920s during the Harding Administration may perhaps be the nadir in this storied history, but for the remainder of its almost-100 year history, the Reserves stood well managed to serve the Nation during times of both peace and war.
In response to the 1973 Arab oil embargo, the United States opened the Reserves to full production in 1976. Since that time, petroleum sales produced net revenues of $22 billion to the U.S. Treasury. The sale of the Elk Hills field in 1998 to Occidental Petroleum netted an additional $3.65 billion.
Today, three of the four original Petroleum Reserves (NPR-1, NPR-2, and NPR-4) have been sold or transferred to the Department of the Interior. The only remaining oil reserve managed by the Department of Energy is the Teapot Dome field (NPR-3) in Casper, Wyoming, which is now a stripper field that also serves as an oilfield technology testing center (Rocky Mountain Oilfield Testing Center).
Northeast Home Heating Oil Reserve
The Northeast Home Heating Oil Reserve was established in 2000 as a two million barrel supply of emergency fuel oil for homes and businesses in the northeastern United States, a region heavily dependent upon the use of heating oil. During 2011, DOE converted the inventory of the heating oil reserve from #2 high sulfur heating oil to cleaner burning ultra low sulfur distillate. DOE also reduced the size of the Reserve to one million barrels.