Global strategic petroleum reserves ("GSPR") refer to crude oil inventories (or stockpiles) held by the government of a particular country, as well as private industry, for the purpose of providing economic and national security during an energy crisis. According to the United States Energy Information Administration, approximately 4.1 billion barrels (650,000,000 m3) of oil are held in strategic reserves, of which 1.4 billion is government-controlled. The remainder is held by private industry. At the moment the US Strategic Petroleum Reserve is one of the largest strategic reserves, with much of the remainder held by the other 26 members of the International Energy Agency.[1] Recently, other non-IEA countries have begun creating their own strategic petroleum reserves, with China being the largest of these new reserves. Since current consumption levels are neighboring 0.1 billion barrels/day, in the case of a dramatic worldwide drop in oil field output as suggested by some peak oil analysts, the strategic petroleum reserves are unlikely to last for more than a few months.
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International Energy Agency reserves
According to a March 2001 agreement, all 28 members of the International Energy Agency must have a strategic petroleum reserve equal to 90 days of prior year's net oil imports for their respective country.[2][3] Only net-exporter members of the IEA are exempt from the reserve requirement. The exempt countries are Canada, Denmark, Norway, and the United Kingdom. However, Denmark and the UK have both recently created strategic reserves due to their requirements as European Union members.
Emergency oil sharing agreements
In addition to maintaining a domestic stockpile of petroleum, several countries also have agreements to share their stockpiles in the event of an emergency.
The Japan, New Zealand and South Korea agreement
In mid-2007 Japan announced a program to share its strategic reserve with other countries in its region. Negotiations are currently underway with New Zealand on an emergency oil-sharing program whereby Japan would make available for purchase its strategic reserves. In an emergency New Zealand would pay the market price plus negotiated option fees for the amount of oil previously held for them by Japan.[4]
South Korea and Japan have also agreed to share their oil reserves in case of an emergency. [5]
The United States and Israel agreement
According to the 1975 Second Sinai withdrawal document signed by the United States and Israel, in an emergency the U.S. is obligated to make oil available for sale to Israel for up to 5 years.[6]
The France, Germany, and Italy agreement
France, Germany and Italy have an oil-sharing agreement to allow each other to purchase their strategic reserves in the event of an emergency.[4]
Africa
South Africa has an SPR. It is managed by PetroSA and the primary facility is the Saldanha Bay oil storage facility, which is a major transit point for oil shipping.[7] Saldanha Bay's six in-ground concrete storage tanks give the facility a storage capacity of 45 million barrels.[8]
Malawi is considering creating a 21-day reserve of fuel, which is an expansion from the current five day reserve. The government has begun planning for storage facilities in the provinces of Chipoka and Mchinji as well as Kamuzu International Airport.[9]
Kenya is setting up a Strategic Fuel Reserve, similar to that of cereals. The strategic stocks would be procured by the National Oil Corporation of Kenya and stored by the Kenya Pipeline Company Limited [10].
Asia
China
In 2007 China announced an expansion of their crude reserves into a two part system. Chinese reserves would consist of a government-controlled strategic reserve complemented by mandated commercial reserves.[11] The government-controlled reserves are being completed in three phases. Phase one consisted of a 101.9 million barrel reserve, mostly completed by the end of 2008. The second phase of the government-controlled reserves, for an additional 170 million barrels is in the construction and planning phase.[12] Recently, Zhang Guobao the head of the National Energy Administration also stated that there will be a third phase of reserves with the goal of increasing China's SPR to 90 days of supply (700 million barrels) by 2020.[13]
China's reserve structure
- Government Reserves; 271.9 million barrels (101.9 million barrels completed, 170 million barrel expansion planned)
- Central government, National Development and Reform Commission(NDRC)[14]
- First phase facilities:
- Dalian, Liaoning Province. Capacity of 19 million barrels (3,000,000 m³), filled as of September 2009.[15]
- Qingdao, Shandong Province. Capacity of 19 million barrels (3,000,000 m³), filled as of September 2009.[16][17]
- Zhenhai, Zhejiang Province. 52 storage tanks with a capacity of 33 million barrels (5,200,000 m³), filled as of December 2007. [18][19][20]
- Zhoushan, Zhejiang Province. Capacity of 33 million barrels (5,200,000 m³), 7.6 million barrels (1,210,000 m3) filled as of June 2007.[21]
- Second phase facilities:
- Dushanzi, Karamay City, Xinjiang Uygur Autonomous Region. Planned capacity of 34 million barrels (5,400,000 m³).[22]
- Seven other facilities, location and size to be determined.[23]
- First phase facilities:
- Local government reserves
- Guangdong Province has begun plans for an expanded reserve, with two separate storage facilities. Their current reserve is equal to 20 days of supply with the expansion upgrading that reserve to 90 days.[24]
- Hainan Province has begun plans for a reserve.[25]
- Shanshan, Xinjiang Uygur Autonomous Region has begun plans for a reserve.
- Caofeidian, Hebei province has begun plans for a reserve.
- Wanzhou, Chongqing municipality has begun plans for a reserve.
- Central government, National Development and Reform Commission(NDRC)[14]
- Enterprise Reserves; 209.44 million barrel strategic reserve
- Commercial oil reserves by major Chinese oil companies, PetroChina, Sinopec and CNOOC
- PetroChina facility, Shanshan County, Xinjiang Uygur Autonomous Region. Completed with a capacity of 6.3 million barrels (1,000,000 m3).[26]
- PetroChina facility, Tieling, Liaoning Province. 8 storage tanks with a capacity of 5.03 million barrels (800,000 m3), completion October 2008[27]
- Sinopec facility, Shanghai, under construction
- Sinopec facility, Ningbo, Zhejiang Province. Completed with a capacity of 24 million barrels (3,800,000 m3).[28]
- Sinopec facility, Zhanjiang, under construction
- Sinopec facility, Caofeidian, under construction[29]
- Sinochem facility, under construction
- Unknown company, Heilongjiang Province
- CNOOC facility, Gansu Province. This will have a capacity of 11.3 million barrels (1,800,000 m3). Under construction.[30]
- Oil storage reserves by medium and small Chinese oil companies
- Commercial oil reserves by major Chinese oil companies, PetroChina, Sinopec and CNOOC
The planned state reserves equals about 35 days of consumption and the planned enterprise reserves equal another 27 days of consumption for a total of 62 days or 481 million barrels.[31]
India
India has begun the development of a strategic crude oil reserve sized at 37.4 million barrels, enough for two weeks of consumption.[32] Petroleum stocks have been transferred from the Indian Oil Corporation (IndianOil) to the Oil Industry Development Board (OIDB).[33] The OIDB then created the Indian Strategic Petroleum Reserves Ltd (ISPRL) to serve as the controlling government agency for the strategic reserve.[34]
The facilities are:
- Mangalore, State of Karnataka. Capacity of 11.22 million barrels (1,784,000 m3).
- Padur village, Udipi in the state of Karnataka. Capacity of 18.7 million barrels (2,970,000 m3).[35]
- Visakhapatnam, State of Andhra Pradesh. Capacity of 7.48 million barrels (1,189,000 m3).
Japan
As of 2003 Japan has an SPR composed of the following three types of stockpiles:
- State controlled reserves of petroleum at ten different locations totaling 320 million barrels. All storage numbers, unless otherwise cited, come from p.177 of this document: [1]
- Tomakomai Eastern Oil Reserve Storage Base, 55 storage tanks, total capacity 34 million barrels (5,400,000 m3).
- Mutsu-Ogawara Storage Base, 53 storage tanks, total capacity 31 million barrels (4,900,000 m3).
- Kuji Storage Base, 3 storage tanks, total capacity 10.5 million barrels (1,670,000 m3).
- Akita Storage Base, 15 storage tanks, total capacity 23.4 million barrels (3,720,000 m3).
- Fukui Storage Base, 27 storage tanks, total capacity 17.9 million barrels (2,850,000 m3).
- Kikuma Underground Petroleum Storage Facility, 8 storage tanks, total capacity 8.9 million barrels (1,410,000 m3).
- Shirashima Storage Facility, 8 tankers (4.4 million barrels each), total capacity 35.2 million barrels (5,600,000 m3).[36]
- Kamigotou Storage Base, 7 storage tanks, total capacity 21.45 million barrels (3,410,000 m3).
- Kushikino Storage Base, 3 storage tanks, total capacity 10.5 million barrels (1,670,000 m3).
- Shibushi Storage Base, 40 storage tanks, total capacity 27.6 million barrels (4,390,000 m3).
- Privately held reserves of petroleum held "in accordance with the Petroleum Stockpiling Law" of 129 million barrels.[37]
- Privately held reserves of petroleum products for another 130 million barrels.
The state stockpile equals about 92 days of consumption and the privately held stockpiles equal another 77 days of consumption for a total of 169 days or 579 million barrels.[38][39] The Japanese SPR is run by the Japan Oil, Gas and Metals National Corporation [40]
South Korea
As part of the government’s energy security efforts, South Korea holds strategic oil reserves to protect against oil supply disruptions. The country’s strategic oil reserve program is managed by the Korea National Oil Corporation, which reports that its system has the capacity to store 116 million barrels of oil. As of April 2007, KNOC held 76 million barrels of oil in its strategic stockpiles[41], 64 million barrels of crude oil and 12 million barrels of petroleum products.
This total amounts to approximately 34 days of net import cover, according to 2006 estimates of demand. KNOC has plans to expand the country’s strategic storage capacity from 116 to 146 million barrels by 2009, and to fill the emergency reserves to 141 million barrels by 2010.
Others
The Philippines has begun plans for a National Petroleum Strategic Reserve by 2010 with an approximate size of 30 million barrels.[42]
Russia has begun plans for a strategic petroleum reserve. Analysts estimate the size of the Russian SPR would be around 78 million barrels.[43][44]
Singapore has an SPR composed of 31.8 million barrels (5,060,000 m3) of crude oil with an additional 64.5 million barrels (10,250,000 m3) of oil products for a total of 96.3 million barrels.[45]
Taiwan has an SPR with a 1999 reported size of 13 million barrels.[46] Taiwan's refiners (Kaohsiung 270,000 bbl/d; Ta-Lin 300,000 bbl/d; Tao-Yuan 200,000 bbl/d; Mailiao 150,000 bbl/d) are also required to store at least 30 days of petroleum stocks.[47] As of 2005, these mandated commercial reserves total 27.6 million barrels of strategic petroleum stocks.
Thailand has increased the size of its SPR from 60 days to 70 days of consumption in 2006.[48]
Europe
In the European Union, according to Council Directive 68/414/EEC of 20 December 1968, all 27 members must have a strategic petroleum reserve within the territory of the E.U. equal to at least 90 days average daily internal consumption.[49]
Czech Republic
The Czech Republic has a four tank SPR facility in Nelahozeves run by the company CR Mero.[50] The Czech SPR is equal to 100 days of consumption or 20.3 million barrels.[51]
Denmark
Denmark has a reserve of 81 days of consumption, equal to about 1,4 million tonnes of oil products [52]. Not counting reserves held by the military defence.
Finland
Finland has an SPR with an approximate size of 62.4 million barrels.[53]
France
France has an SPR with an approximate size of 65 million barrels.[54] As of 2000 jet fuel stocks were required for at least 55 days of consumption, with half of those stocks controlled by the Société Anonyme de Gestion des Stocks de Sécurité (SAGESS) and the other half controlled by producers.[55]
Germany
Germany created the Federal Oil Reserve in 1970, stored in the Etzel salt caverns near Wilhelmshaven in northern Germany, with an initial size of 70 million barrels (11,000,000 m3).[56] The current German Federal Oil Reserve and the Erdölbevorratungsverband (EBV) (the German stockholding company) mandates that refiners must keep 90 days of stock on hand, giving Germany an approximate reserve size of 250 million barrels as of 1997.[57] The German SPR is the largest in Europe.
Hungary
Hungary has an SPR with approximately 90 days of consumption or 11.88 million barrels.[58]
Ireland
Ireland has approximately 31 days of oil stocks in Ireland and another 9 days of oil stocks held in fellow EU members states. Additionally, they have stock tickets (contracts with a 3rd party where the government has the option to purchase in the event of an emergency) and stocks held by large industry or large consumers. On average Ireland has approximately 100 days of oil available.[59][60]
Poland
Poland has an SPR with approximately 70 days of consumption.[61] Another facility holding 20 additional days of consumption is scheduled to be completed in 2008.[50] Poland also requires oil companies to maintain reserves sufficient for 73 days of production. [62]
Portugal
Portugal has an SPR with an approximate size of 22.44 million barrels.[63]
Slovakia
Slovakia has an SPR with an approximate size of 748,000 barrels.[51]
Spain
Spain has an SPR with an approximate size of 120 million barrels.[64]
Sweden
Sweden has an SPR with an approximate size of 13.29 million barrels.[65]
Switzerland
Switzerland has SPRs consisting of gas, diesel, jet fuel and heating oil for 4.5 months of consumption. The reserves were created in the 1940s and were used for the first time in 2005 following Hurricane Katrina. [55]
United Kingdom
The United Kingdom has recently created a strategic reserve, the size is unknown.
Middle East
Iran
In April 2006 the Fars News Agency reported that Iran has begun plans to create an SPR. The National Iranian Oil Company (NIOC) has begun construction of 15 crude oil storage tanks with a planned capacity of 10 million barrels.[66] In August 2008, Iran announced plans to expand their SPR with a new facility on Kharg Island containing 4 tanks holding 1 million barrels each.[67] Iran's SPR facilities are:
- Ahwaz. 4 storage tanks, total capacity 2 million barrels (320,000 m3).
- Omidiyeh. 3 storage tanks, total capacity 3 million barrels (480,000 m3).
- Goureh. 6 storage tanks, total capacity 4 million barrels (640,000 m3).
- Sirri Island. 1 storage tank, total capacity 500,000 barrels (79,000 m3).
- Bahregansar. 1 storage tank, total capacity 500,000 barrels (79,000 m3).
- Kharg Island. 4 storage tanks, total capacity 4 million barrels (640,000 m3). Planned facility, not operational yet.
Kuwait
Kuwait has a joint stockpile held in South Korea. The deal gives South Korea first rights to purchase the oil. The current size of the stockpile is 2 million barrels (320,000 m3).[68]
Others
As of 1975 Israel is believed to have a strategic oil reserve equal to 270 days of consumption.
Jordan has strategic oil reserves equal to 60 days of consumption or 6.24 million barrels.[69]
North America
United States
The United States has the largest reported Strategic Petroleum Reserve with a total capacity of 727 million barrels. If completely filled, the US SPR could theoretically replace about 60 days of oil imports as the US is estimated to import approximately 12 million barrels/day of crude oil.[70] According to the US Department of Energy the facilities maximum flow rate is limited to approximately 4.4 million barrels/day when filled to maximum, with flow rate declining as the reserve is drawn down.[71] The U.S. facilities are in salt caverns with locations in:
- Bryan Mound - located near Freeport, Texas. Capacity of 226 million barrels (36,000,000 m³).
- Big Hill - located near Winnie, Texas. Capacity of 160 million barrels (25,000,000 m³).
- West Hackberry - located near Lake Charles, Louisiana. Capacity of 219 million barrels (35,000,000 m³).
- Bayou Choctaw - located near Baton Rouge, Louisiana. Capacity of 72 million barrels (11,000,000 m³).
- Richton, Mississippi. A new facility the capacity is unknown.
The US has also organized the 2-million-barrel (320,000 m3) Northeast Home Heating Oil Reserve to supply northeast homeowners during shortages.
California
There is a report to create a California Strategic Fuels Reserve [72] [73].
Oceania
Australia has a strategic reserve with both petroleum and petroleum products equal to 10 days of consumption or 8.77 million barrels.[74]
New Zealand has a strategic reserve with a 2008 size of 170,000 tons or 1.2 million barrels. Much of this reserve is based on ticketed option contracts with Australia, Japan, the United Kingdom and the Netherlands, which allow for guaranteed purchases of petroleum in the event of an emergency.[75]
See also
References
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- ^ a b North Central Europe
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- ^ Nippon Oil sells emergency oil reserves option to NZ | Markets | Reuters
External links
For more on APEC strategic reserves:
- http://pzl1.ed.ornl.gov/APECSizeIAEEPaperFinal_Proceedings.pdf
- http://www.ieej.or.jp/aperc/2002pdf/OilStocks2002.pdf
For more info on the IEA reserves:
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