MINNEAPOLIS (WCCO) — The price at the gas pump doesn’t just feel high, it’s considerably more than years past.
The nationwide average was $3.41 Monday evening. The last time it was that high was 2014.READ MORE: Why Is 5G A Concern Around Airplanes? And What Solutions Are In The Works?
A unique way to lower it is being debated in Washington.
So we wanted to know: What is the Strategic Petroleum Reserve? And is tapping it a smart option to lower gas prices?
Gas prices have risen thanks to several factors, inflation being one of them. Demand for gas has also increased while production has yet to ramp up to pre-pandemic levels.
Democratic Senate Majority Leader Chuck Schumer seems to believe tapping into the Strategic Petroleum Reserve is the most obvious path to bring relief to drivers.
That’s why I’m urging the administration to tap that reserve, get the prices down, and then we have to embark on a full-time campaign to get us away from carbon fuels altogether, which will reduce all of the ups and downs that we see with gasoline, with oil, with home heating oil, and everything else,” Schumer said.
What is the Strategic Petroleum Reserve?
“It’s a strategic reserve,” said Patrick De Haan, lead petroleum analyst at GasBuddy. “It can hold up to 700 million barrels of crude oil.”
The oil is stored underground at several sites in Texas and Louisiana, an idea created in the 1970s as a backup plan for the U.S. in case commercial oil supplies were disrupted worldwide. It currently holds about 610 million barrels of oil. De Haan said based on current demand, that’s enough to serve the country for about a month.READ MORE: What Is ‘Wordle’? And Why Is It So Popular?
How has the SPR been utilized in the past?
“During major disruptions only,” De Haan said.
Millions of barrels released from the reserve when Hurricane Katrina damaged pipelines and refineries, along with several other hurricanes over the past few decades.
It was tapped again in 2011 when a civil war in Libya disrupted oil production.
“It has never been used simply to bring down the price of crude oil,” said De Haan, and not even when drivers paid record highs at the gas pump in 2008.
“Would utilizing the SPR actually lower gas prices? It could, depending on the size, or the amount of crude oil being released,” De Haan said. “To make a dent (in gas prices), we’re probably be talking that the SPR would have the release 25-50 million barrels, potentially more crude oil depending in the circumstances.”
Despite having an impact on prices, De Haan says utilizing the SPR might not be the most efficient tactic. It could take several weeks before gas prices start to drop and the relief might only be temporary.
“It becomes somewhat of a dangerous to slippery slope to use a strategic reserve for times of real disruption simply when we simply don’t like the high price of gasoline and crude oil,” he said.MORE NEWS: What Are The Rules For Cameras In Minnesota Courtrooms?