The Energy Coast

Crude oil stockpiled in the Strategic Petroleum Reserve is pumped into four underground storage facilities in Texas and Louisiana. Today, the reserve's oil and facilities are worth more than $22 billion. Under the 2005 Energy Policy Act, one or more sites will be expanded and one new one added to raise capacity from 727 million barrels to 1 billion.

1944

Interior Secretary Harold Ickes advocated stockpiling crude oil for emergency use.

1952

President Harry Truman's Minerals Policy Commission proposed creating a strategic oil supply.

1956

The Suez Crisis prompted President Dwight Eisenhower to recommend creating an oil reserve.

1970

The Cabinet Task Force on Oil Import Control recommended creating an oil reserve.

1973-1974

Arab nations cut off the flow of oil into the United States.

1975

President Gerald Ford signed the Energy Policy and Conservation Act, creating the SPR. The intent was to fill the reserve with crude oil purchased on the open market.

1977

June - construction began on salt caverns along the Gulf Coast for storage.

July 21 - the first oil, from Saudi Arabia, was delivered to the SPR.

1991

Jan. 16 - President George H.W. Bush ordered the first emergency drawdown of the SPR to mitigate disruptions in supply resulting from the invasion of Kuwait; 17.3 million barrels were sold to 13 companies.

1994

With an inventory of less than 600 million barrels, President Bill Clinton suspended purchase of crude oil on the open market due to budget deficits.

1996-1997

The Clinton administration sold about 28 million barrels of oil from the SPR to reduce the deficit.

1999

Clinton moved to replace oil previously sold from the SPR with royalty oil-a percentage of oil produced from federal leases. Previously, royalties were collected in cash.

2001

November - President George W. Bush ordered the reserve increased to 700 million barrels using Clinton's royalty-in-kind program.

2005

July - The Energy Policy Act of 2005 required SPR capacity expanded to 1 billion barrels.

August - 700 million goal was met.

Sept. 6-9 - Bush ordered an emergency drawdown after Hurricane Katrina damage reduced domestic production by 25 percent; 5 companies bought 11 million barrels.

Sept. 24 - Hurricane hit Texas and Louisiana, disrupting the release of oil under the drawdown.

Fishy Origin

Few people in 2006 have ever seen an actual oil barrel, since oil today is moved by tankers and pipelines. Nonetheless, the 42-gallon barrel persists as the standard unit of measurement. As Daniel Yergin notes in "The Prize: The Epic Quest for Oil, Money and Power," (Free Press, 1992): "The number was borrowed from England, where a statute in 1482 under King Edward IV established 42 gallons as the standard size barrel for herring in order to end skullduggery and 'divers deceits' in the packing of fish. At the time, herring was the biggest business in the North Sea." Today, it is oil.

Storing Oil

Crude oil is stored in naturally-occurring underground rock salt formations known as salt domes, more than 500 of which are concentrated along the Gulf Coast. Water is injected into the dome through a well, dissolving part of the formation and forming a cavern. The water becomes brine and is removed through another well. Oil is pumped into the well, displacing the remaining brine. Oil can later be removed by pumping fresh water into the well, which forces the oil to the surface.

Tapping Oil

President can order an emergency drawdown of the reserve to counter an energy emergency that could jeopardize national safety or damage the economy. The Energy secretary can test the distribution system with drawdowns of up to 5 million barrels. The Energy Department also can lend oil from the reserve to help petroleum companies resolve delivery problems. Loans were offered most recently following Hurricanes Katrina and Rita.

Since the reserve was established only twice has oil been dispersed due to an emergency:

• 17.3 million barrels released in 1991 due to the Persian Gulf War
• 11 million barrels released in 2005 due to Hurricane Katrina