The U.S. Department of Energy (DOE) is looking to test the oil market by purchasing one million barrels of sweet crude oil for the Strategic Petroleum Reserve (SPR). They will be accepting applications from small and mid-sized U.S. oil producers only. The bids must be in by 5/27 with contracts to be awarded hopefully by 5/29 with deliveries of the oil occurring as soon as June or July.
Oil Storage Sites
Depending on who wins the contracts and their preferences, deliveries will go to one or more of the following SPR storage sites:
- Big Hill (TX) Located in Jefferson County, Texas, approximately 26 miles southwest of Beaumont, Texas, it has 14 storage caverns, an authorized storage capacity of 170.0 million barrels and a cavern inventory of 143.3 million barrels.
- Bryan Mound (TX) Located in Brazoria County, Texas, approximately three miles southwest of Freeport, Texas, it has 19 storage caverns, an authorized storage capacity of 247.1 million barrels and a cavern inventory of 230.2 million barrels.
- Bayou Choctaw (LA) Located in Iberville Parish, Louisiana, approximately 12 miles southwest of Baton Rouge, Louisiana, it has six storage caverns, an authorized storage capacity of 76.0 million barrels and a cavern inventory of 71.8 million barrels.
These websites are accepting bids and will have all the information required:
Crude Oil Storage for Rent
In addition to this purchase, the DOE is opening up around 53 million barrels of storage in the SPR for small and mid-sized U.S. producers to “rent.”
“We’ve opened up the storage for use by the private industry and we’re charging rent, essentially, for using the strategic reserve. So rather than going out and buying oil or charging people rent and having them paying cash, they pay in oil. So as a result, we’re filling the SPRO strategic reserve, and we’re doing it at the best price available. For the taxpayer that’s a really, really good deal, because we’re going to fill it up at some point in the future—not for free, but essentially for free at a very low price.” Secretary of Energy Dan Brouillette explained in his CERAWeek Conversation interview.