Strategic Petroleum Reserves

The SPR was created around 1970s after the US oil crisis during the early decade of 1970s. The current SPR capacity is 727 million barrels. The total cost for the SPR is 22 billion dollars (5 billion dollars was for facilities and 17 billion dollars was for purchasing sweet and sour petroleum). The SPR is stored in Salt caverns along the US costal areas.

The Department of Energy has plans to increase the capacity to 1 billion barrels. During the State of Union Address on 1/23/2007, President George Bush asked the Congress to double its capacity by 2027 to 1.5 billion barrels.

China has plans to build its own Strategic Petroleum Reserves. There is a three-stage development plan. The total capacity will reach 68 million tons. In first stage, the capacity is 12 million tons. The second and third stage the capacity is 28 million tons each. There is no specific time schedule to finish all the China SPR projects.

I am always confused by the petroleum volume unit of barrel. I have discovered the following basic conversions after careful research. I keep these conversion relationships for future reference. The first three relationships are exact. The last three relationships are derived numbers.

1 barrel is 42 US gallons.
1 gallon is 231 cubic-inches.
1 inch is 2.54 centimeter.
1 gallon is 3.785411784 liter.
1 barrel is 158.987294928 liter.
1 cubic-meter is 6.28981 barrels.

The petroleum specific weight (relative to water) is 0.82. Based on the above relationships, one ton of petroleum is 7.6705 barrels. The China SPR capacity of 68 million tons is equivalent to 521.594 million barrels. If the capacity was filled up at the current petroleum price of $55 per barrel, the total cost would be $286.88 million dollars. If the $5 billion cost for the US SPR facilities was used for building the Chinese counterparts, the total cost for the China SPR projects would be more than $33 billion dollars.