“There is evidence that experience reduced the scope and se­verity of earlier errors [with the Strategic Petroleum Reserve]–that the 1981–84 perfor­mance was superior to the 1977–79 performance. But new facets of the pro­gram have brought new problems.”

“Combined with the $5 per barrel handling and storing expense [as of 1984], the overall market value of SPR oil is billions of dollars less than its embedded average cost of over $35 per barrel.”

A sacred cow of U.S. energy policy is the Strategic Petroleum Reserve. The case for the reserve assumes that another energy crisis lies around the corner, the reserve will be efficiently managed during the crisis to alleviate the emergency, and private inventories and entrepreneurship alone would be inadequate. The reserve is seen by proponents as the nation’s insurance policy against the inherent instability of the world oil market.…

The Strategic Petroleum Reserve (SPR) is in play. The 695 million barrel inventory, stored in four storage locations in Texas and Louisiana with a capacity of 713.5 million barrels, never found its purpose; it is still waiting for the third oil crisis (after the 1973/74 Arab Embargo and the 1979 Iranian Revolution). Not surprisingly, the SPR is on the verge of becoming a piggy-bank offset for lawmakers. At $50 per barrel, SPR inventory is worth about $35 billion.

This week, MasterResource reviews the history of state and federal oil (and natural gas) storage regulation and ownership. Part I today is early (pre-SPR) regulation. Part II tomorrow will review the prehistory and beginnings of the SPR.

Part III will examine early problems with the federal storage program; Part IV early fill and financing controversies.…

The Alliance for Wise Energy Decisions (AWED) is an informal coalition of individuals and organizations interested in improving national, state, and local energy and environmental policies. Our premise is that technical matters like these should be addressed by using Real Science (please consult WiseEnergy.org for more information).

A key element of AWED’s efforts is public education. Towards that end, every three weeks we put together a newsletter to balance what is found in the mainstream media about energy and the environment. We appreciate MasterResource for their assistance in publishing this information.

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Some particularly good articles in this issue are:

Wind Energy More Expensive and Pointless Than You Thought

Electricity from New Wind is Four Times More Costly than Existing Nuclear

Bill Gates: Cost of switching to renewables is “beyond astronomical”

Radio interview: Living with Wind Turbines

German Energy Plan Based on Unexamined Green Movement Beliefs

Powerless in Dubai

Fossil Fuels and Mankind

Nobel Prize-Winning Scientist Says Obama Is ‘Dead Wrong’ On Global Warming

Whatever Happened to Common Sense Regarding Climate Change?…

“The time has come to end the long debate over national energy policy in the United States and to put ourselves solidly on the road to energy independence. … This bill is only the beginning.”

– President Gerald Ford, December 22, 1975, upon signing the Energy Policy and Conservation Act of 1975 into law.

With oil shortages in the 1970s, exports of domestic oil became of acute political interest. Regulation was accomplished under two laws: the Export Administration Act of 1973 and the Energy Policy and Conservation Act of 1975. The rise of Alaskan North Slope Oil, in addition, inspired specific export regulation that not only reflected concerns about domestic supply but special privilege for United States shipping interests. [1]

Export Administration Act

With first sales of crude and product transactions in U.S. …