DOE Considering Emergency Storage as a Secondary Mission for the SPR

The U.S. Department fo Energy is reportedly exploring whether it should incorporate the Strategic Petroleum Reserve's ability to lease space during a crisis as a secondary mission for the reserve. In other words, DOE is considering making capacity available in times of severe demand destruction, providing capacity to store excess crude. 

DOE made excess capacity in the Strategic Petroleum Reserve (SPR) available for lease during the COVID crisis. Fifteen million barrels of storage capacity out of the 23 million that DOE made available have thus far been utilized. 

DOE’s action during COVID-19. “Considering today’s exceptional circumstances, ILTA has no objection to the administration’s plans to lease storage capacity in Strategic Petroleum Reserve locations to commercial interests,” ILTA President Kathryn Clay wrote to President Trump on April 29.

However, in normal market conditions, even in times of severe stress on the supply chain, the terminals Industry has more than sufficient capacity to meet demand. As a result, ILTA almost always opposes allowing government-owned storage into the market because it constitutes a subsidized storage service that could place private commercial storage operators at a competitive disadvantage. ILTA is closely monitoring DOE’s considerations and will intervene to protect the interests of the private market.