For a lot of the United States, summer marks much anticipated warm weather. But, for residents along the East and Gulf Coasts of the United States, summer also means bracing for the beginning of the Atlantic hurricane season.
Spanning from June through November, hurricane season reaches its peak from mid-August to late October, with the greatest number of tropical storms and hurricanes generally occurring in September.
The impacts of these storms can have serious repercussions not only for the communities along the Coasts, but for residents throughout the United States—particularly when it comes to energy. These severe storms can cause downed power lines, resulting in widespread power outages and power grid instability. They can also prevent refiners located along the Gulf Coast from being able to distribute gasoline, diesel and other refined products throughout the eastern half of the country.
In the event that a hurricane disrupts oil production or deliveries to refineries, the U.S. Department of Energy’s Strategic Petroleum Reserve (SPR) plays a key role in securing our energy supplies during hurricane season.
The U.S. government created the SPR in 1975 in response to the oil embargo of 1973 and 1974, as part of the Energy Policy and Conservation Act. The International Energy Agency set requirements for countries to have 90 days of crude oil import protection, and the SPR has helped the United States to meet these requirements. Currently, the SPR has an authorized storage capacity of 713.5 million barrels, with an inventory level of 653.7 million barrels as of June 19, 2020.
Since 2002, the SPR has helped the Nation avoid higher oil prices from oil supply disruptions by providing emergency crude oil to refiners affected by major hurricanes through SPR crude oil exchange agreements. Private companies that require assistance during supply disruptions can contact the SPR, and, if there is no other source of supply, they can enter into an emergency exchange agreement with the SPR. In these agreements the SPR lends companies small quantities of crude oil which the recipients must return to the SPR by a set date, plus a premium paid in barrels to compensate the SPR for operating costs associated with the exchange.
Over the last two decades, the SPR approved oil exchange agreements in response to seven emergency supply disruptions. Most recently, the SPR provided crude oil to refiners affected by Hurricane Harvey in 2017. The SPR provided a total of 5.2 million barrels of crude oil to affected refiners along the Gulf Coast following the hurricane; this oil allowed refiners to continue operations and to prevent any further disruptions of refined products, such as gasoline.
Without the oil from the SPR, many Americans would have likely faced much larger hikes in gasoline prices following the hurricane. The SPR also approved oil exchange agreements during Hurricane Lilli in 2002, Hurricane Ivan in 2004, Hurricane Katrina in 2005, Hurricanes Gustav and Ike in 2008, and Hurricane Isaac in 2012.
To learn more about the SPR and its contributions during past hurricanes, visit our SPR website.