Key Facts
Presidential and congressional drawdowns drained the Strategic Petroleum Reserve, created to guard against supply shocks, to its lowest level since 1984.
The Congressional Budget Office estimates that Congress raised $18.3B in “offsets” through 2025 by including SPR drawdowns in spending laws. However, the Energy Department projects costs of $20B plus $100M in repairs to restore it.
Lawmakers could pair refilling with reforms—limiting non-emergency drawdowns, enacting permitting reform, and repealing the Jones Act—to ease taxpayer costs and keep the SPR ready for real emergencies.
Introduction
The Strategic Petroleum Reserve (SPR) was born out of crisis. After the 1973 oil embargo caused severe fuel shortages, Congress created the SPR in 1975 to ensure the nation would be prepared for future supply emergencies. The reserve, designed to store hundreds of millions of barrels of crude oil in massive salt caverns along the Gulf Coast, was meant to provide a buffer in times of genuine national need.
But over the years, the SPR’s purpose has drifted. Instead of being reserved for emergencies, it has too often become a tool of political expediency. Presidents have occasionally ordered drawdowns for short-term political gain, and Congress has repeatedly tapped the reserve as a budget gimmick—mandating sales to “offset” new spending while leaving taxpayers responsible for refilling it. Those offsets totaled $18.3 billion through 2025, but the Department of Energy now estimates it will cost more than that—about $20 billion plus $100 million in repairs—to restore the reserve over several years.
The SPR today stands at 403 million barrels and is set to fall further to 238 million barrels by 2028, a 66% drop from the 695 million barrels it held in 2017. On top of this, the SPR Petroleum Account, used to finance the purchase and transport of fuel, is significantly depleted after years of treating the SPR like a fiscal piggy bank. With the SPR reaching its lowest point since 1984, taxpayers once again are on the hook to rebuild a reserve that should have never been depleted for political convenience.
Yet, a potential silver lining remains: if current oil prices stay low and domestic production continues to rise, the refill could happen at a relative discount. Moreover, there are reforms that Congress and the president could initiate to ease the costs of refilling the SPR.
The Strategic Role and Infrastructure of the SPR
The Strategic Petroleum Reserve was created in 1975 after the Organization of Petroleum Exporting Countries (OPEC)’s 1973 oil embargo caused fuel shortages and economic disruption. Congress passed the Energy Policy and Conservation Act to safeguard U.S. energy security and meet international obligations by maintaining a large emergency crude oil reserve.
Through the SPR, the U.S. fulfilled its obligations as a member of the International Energy Agency to maintain a 90-day stockpile of net petroleum import coverage. Initially, the SPR was envisioned to hold up to 1 billion barrels of crude oil, though it has never exceeded the 727 million barrels held in 2009. Located in massive salt caverns along the Gulf Coast of Texas and Louisiana, the SPR was designed as a strategic way to store large volumes of oil for long periods of time. These underground facilities were built for decades-long oil containment, and are capable of drawing down over 4 million barrels per day.
Under current law, the president may authorize an emergency drawdown when a “severe energy supply interruption” threatens national security or the economy, giving the executive broad discretion to release oil in times of crisis, such as in response to a hurricane.
However, presidents have, on occasion, tapped into the SPR for political purposes. For example, from July to October 2000, President Bill Clinton ordered a 30-million-barrel release shortly before the election. While the reason given was to thwart potential heating oil price spikes in New England, the release likely served more as a political gesture since the DOE’s own analysis showed the release would have little impact on heating oil prices.
Depleting the Reserve: Mandated Sales and Emergency Drawdowns
Over the last decade, Congress has increasingly used the SPR not as a strategic asset, but as a type of budget gimmick to “pay for” higher spending. The revenues from these sales are recorded in the federal budget as “offsetting receipts,” essentially treated as negative spending to make new outlays appear deficit-neutral. Since 2015, more than 350 million barrels have been authorized for sale by Congress from FY2017 to FY2031. These include:
- 58 million barrels under the Bipartisan Budget Act of 2015
- 66 million barrels under the Fixing America’s Surface Transportation Act (FAST) Act (2016)
- 35 million barrels under the 21st Century Cures Act (2016)
- 7 million barrels under the Tax Cuts and Jobs Act (2017)
- 100 million barrels under the Bipartisan Budget Act of 2018
- 15 million barrels under the America’s Water Infrastructure Act (2018)
Rather than reflecting strategic energy goals, Congress implemented these drawdowns in the above laws for the purposes of achieving budgetary offsets for new spending.
| CBO Estimates of Offsetting Receipts from Congressionally Mandated SPR Sales (in millions) | ||||||||||||
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | Total |
-$350 | -$400 | -$400 | -$400 | -$700 | -$900 | -$950 | -$950 |
|
|
| -$5,050 | |
|
|
|
|
| -$1,450 | -$2,350 | -$2,400 |
|
|
| -$6,200 | |
-$600 | -$600 | -$650 | -$650 | -$700 | -$700 | -$750 | -$750 |
|
|
| -$5,400 | |
|
|
|
|
|
|
|
| -$217 | -$224 |
| -$441 | |
|
|
|
| -$1,130 | -$510 | $0 | $0 | -$2,330 | -$2,390 |
| -$6,360 | |
|
|
|
|
|
|
|
|
|
| -$340 | -$340 | |
Total | -$950 | -$1,000 | -$1,050 | -$1,050 | -$2,530 | -$3,560 | -$4,050 | -$4,100 | -$2,547 | -$2,614 | -$340 | -$23,791 |
| * As enacted, the Tax Cuts and Jobs Act mandates a drawdown of 7 million barrels in 2026 and 2027. A breakout of that amount is not available in CBO’s cost estimates, the figure is extrapolated from CBO’s score of the Senate’s proposal at the time to drawdown the SPR by 5 million barrels. | ||||||||||||
While these sales generated billions in offsetting receipts, including $18.3 billion through FY 2025 and $3.5 billion projected through FY 2028, they undermine the SPR’s emergency readiness. In the last ten years, SPR reserves fell from 695 million barrels to 403 million barrels today. Under current law, they will fall further to 238 million barrels by 2028, a 66%reduction since 2017.
This period does include a drawdown triggered in response to a global emergency. In 2022, President Joe Biden ordered the release of 180 million barrels, the largest SPR release in history, to curb rising gas prices after Russia’s invasion of Ukraine. In total, the Biden Administration released close to 300 million barrels between 2021 and 2024 through both the emergency drawdown and congressionally-mandated sales. This has brought the SPR to its lowest level in four decades.
The emergency drawdown was sold at an average price of $95 per barrel, generating nearly $17 billion in offsetting receipts. Congress directed just over $2 billion of that toward deficit reduction. After the immediate crisis passed, those funds were also used to purchase 59 million barrels at an average price of $76 per barrel, resulting in a net profit of $3.5 billion.
Nevertheless, the cumulative effect of the drawdowns has left the SPR significantly depleted and the Reserve is at a historic low. On top of those problems, Secretary Chris Wright recently told the House Energy and Commerce Subcommittee on Energy that recent drawdowns have led to structural damage at the SPR facilities that will require $100 million to repair.
Reforming and Refilling the SPR
In January 2025, President Trump made refilling the SPR a policy priority in his inaugural address. The DOE soon estimated that refilling the reserve to near-full capacity at current prices will cost an estimated $20 billion over several years.
To restore the SPR’s intended role and avoid a repeat of past misuse, Congress should take a strategic approach to managing the SPR, starting with hearings and debate about its proper role and size. That discussion should be informed by changes in U.S. energy markets: while petroleum imports have grown from 1.5 billion barrels in 1975 to 2.4 billion barrels in 2024, the U.S. also became a net exporter of petroleum in 2020 for the first time since 1949.
With a strategic plan, lawmakers would be dissuaded from tapping the SPR on an ad hoc basis in unrelated legislation simply to secure favorable CBO scores. Congress could then come up with a long-term plan for refilling the SPR to an appropriate capacity. Complementary reforms would also help to lower the expenses of restoring the SPR.
1. Cancel Remaining Mandated Drawdowns
About 100 million barrels are still scheduled to be sold from the SPR through FY2031 under past budget laws. With the reserve already severely depleted, canceling these drawdowns would not have a significant real-world budgetary impact, but would help restore the SPR’s role as a safeguard for genuine emergencies. This is the easiest step Congress can take to end its use as a budgetary gimmick. Congress could go further by providing that drawdowns can only be mandated pursuant to an emergency, and provide for congressional review of emergency declarations by the president.
2. Streamline Permitting
Energy projects face years of costly delay under the National Environmental Policy Act (NEPA) and related reviews. Bipartisan proposals for permitting reform would spur energy development by setting firm deadlines, reducing duplicative agency processes, and limiting repetitive litigation. These reforms would accelerate pipeline, refinery, and export infrastructure, lowering the cost of moving petroleum.
3. Repeal the Jones Act
The Jones Act of 1920 requires that cargo shipped between U.S. ports use vessels built, flagged, and crewed domestically. Because Jones Act-compliant tankers are scarce and far more expensive than global alternatives, this mandate inflates the cost of transporting oil and refined products, leaving Americans with higher energy bills. Repealing or reforming the law would bring significant savings for energy logistics. The most comprehensive currently proposed reform, the Open America’s Waters Act, introduced as S. 2043 by Sen. Mike Lee (R-UT) and as H.R. 3940 by Rep. Tom McClintock (R-CA), would repeal the Jones Act’s restrictions on coastwise trade.
4. Curb Costly State and Local Lawsuits
Several state and local governments have pursued climate liability suits against energy producers under public nuisance or consumer protection laws. These lawsuits drain taxpayer resources, introduce legal uncertainty, and raise compliance costs—particularly for companies trying to grow domestic energy production. Federal preemption would ensure energy policy is decided through national statute rather than fragmented court rulings. A recent NTUF analysis shows how some governments are using legal challenges to shift costs to energy producers—and, ultimately, to taxpayers.
5. Modernize Infrastructure and SPR Management
Bottlenecks in U.S. energy infrastructure force oil and gas into higher-cost transport channels, raising prices for consumers and making it more expensive to refill the SPR. Pipeline projects in particular face unpredictable permitting processes and duplicative agency reviews, discouraging investment in critical capacity.
Several reforms in Congress would address these issues. H.R. 3062, the Promoting Cross-Border Energy Infrastructure Act by Rep. Julie Fedorchak (R-ND) would prevent politically-charged reversals of pipeline permits like the Keystone XL cancellation by requiring congressional approval to revoke cross-border projects. The bill would also establish a clear statutory framework that puts the Federal Energy Regulatory Commission (FERC) in charge of oil and gas pipeline approvals, providing investors with greater certainty.
Similarly, H.R. 3668, the Improving Interagency Coordination for Pipeline Reviews Act by Rep. Richard Hudson (R-NC) would streamline federal and state approvals by requiring coordinated schedules, simultaneous reviews, and stronger dispute resolution authority for FERC. This approach would preserve environmental safeguards while reducing costly permitting delays that drive up energy prices.
In addition, DOE could consider leasing unused SPR cavern capacity to private operators. Allowing commercial storage when the reserve is underfilled would generate revenue to cover maintenance costs and improve cavern integrity, reducing the burden on taxpayers without depleting the stockpile.
Conclusion: A Silver Lining for Taxpayers
We warned in 2021 that years of political misuse would leave taxpayers stuck with the bill to refill the Strategic Petroleum Reserve. That warning has now come true. DOE estimates it will cost $20 billion to restore the SPR plus $100 million in facility repairs—a price tag that far exceeds the $18.3 billion in “offsets” Congress booked through 2025.
Yet today’s energy landscape offers a rare opportunity: with oil prices at a 4-year low and domestic production on the rise, refilling the reserve could be done at a relative bargain. Paired with reforms that unleash energy development, reduce the costs of transporting oil, and prevent future misuse, those lower prices could translate into lasting savings for taxpayers. Lawmakers should seize this moment to restore the SPR’s integrity and ensure taxpayers are never forced to pay twice for Washington’s mistakes.