The US is working on ways to expand storage space to add several hundred million more barrels to it, Treasury Secretary Steven Mnuchin said at a White House briefing, as quoted by Reuters.
“We’re also exploring potentially having the ability to store another several hundred million barrels, so we’re looking at lots of different options,” Mnuchin said after announcing that the federal government was drafting a plan to prop up troubled local oil producers.
The federal government already leased out 23 million barrels worth of storage space in the Strategic Petroleum Reserve to nine energy companies, and oil is already flowing into the SPR. In April, over 1 million barrels were sent to the SPR.
The Strategic Petroleum Reserve could hold up to 714 million barrels of crude. Currently, its occupancy is about 636 million barrels, Reuters notes.
The Cushing, Oklahoma, hub is also filling up. The current occupancy rate of the complex is about 70 percent, but according to traders, it is actually fully booked by companies seeking storage space for their oil. Cushing’s maximum capacity is about 80 million barrels, but its working capacity is 76 million barrels, according to Reuters. As of April 17, the amount of oil stored there stood at 53 million barrels.
Oil is being stored offshore as well. Off the coast of California alone, there are tankers loaded with some 20 million barrels of crude, idled offshore with the oil nowhere to go.
“It’s unbelievable. It’s prices that are so low, and in some cases we’re storing oil and getting paid for storage because we have a tremendous capacity for it,” President Trump said. “So what’s happened with these strategic reserves is incredible.”
Trump also told the media that he will be announcing his plan for helping the oil industry soon without providing any details. According to reports, the plan will boil down to a loan lifeline, although Mnuchin told reporters, “This is not going to be a bailout.”