Sandia LabNews

US Strategic Petroleum Reserve expansion project gets technical assist from Sandia researchers

The clock ticks toward a deadline in June as a group of Sandia scientists and engineers are hard at work on an important project to help the DOE make the right choices at the US Strategic Petroleum Reserve.

The multidisciplinary group, centered around David Borns’ Geotechnology and Engineering Dept. 6113, is helping DOE meet its goal of adding 273 million barrels in capacity to the reserve, which is contained in natural salt domes deep in the earth along the US Gulf Coast. The Energy Policy Act of 2005 directed the Secretary of Energy to fill the SPR to its authorized one billion barrel capacity.

At a typical 10 million barrels per salt cavern, this means another 27 caverns need to be added to the 62 existing ones, explains project lead Brian Ehgartner (6113). Some of these will be created within existing domes used by SPR (see “SPR makes use of natural geologic features” on page 5), and some will be created at a new location along the coast. Five new sites are under technical review, following an environmental impact process. The new site candidates are Stratton Ridge, Texas, Chacahoula and Clovelly, La., and Richton and Bruinsburg, Miss.

Selection input

Working with a $2.5 million budget, about a dozen Sandia researchers and a few consultants are providing input on a number of issues connected with site selection, says David. These include the geomechanics and engineering integrity, access to petroleum infrastructure, existing or historical problems that would make expansion difficult, the geometry of additional salt caverns in presently used domes, and other factors. Major pipelines from the region head northwest into the Midwest, north to the Great Lakes Seaway area and Chicago, and northeast to the Atlantic states, creating the ability to move SPR inventory to most US refineries.

With Sandia consultation, DOE is choosing to add additional storage capacity to its Big Hill, Texas, and its Bayou Choctaw and West Hackberry, La., storage sites, Brian says. This capitalizes on existing infrastructure and operations, shortens development time, and minimizes costs.

Late last year Clovelly, La., was selected as a candidate site for new SPR caverns. “Our work load kept growing. All this happened . . . with a realization that we needed to finish by May or June,” says Brian. The Clovelly site is a part of the Louisiana Offshore Oil Port (LOOP) system, a deepwater port in the Gulf of Mexico providing tanker offloading for crude oil transported on some of the largest tankers in the world. LOOP handles 13 percent of the nation’s imported oil — about 1.2 million barrels a day — and connects by pipeline to 35 percent of US refining capacity.

At Clovelly, the team turned to Lupe Arguello (1525), Jonathan Rath, and Jim Beam (both 1524) to look at the idea of putting up to 16 SPR caverns deeper in the salt dome, below nine existing caverns used by LOOP. “Salt is notorious for creeping,” explains David. “So there are questions about the integrity of the existing caverns and subsidence [sinking] at the site. It’s really an interesting challenge.

“If the concept proves feasible, it can be applied at existing sites throughout the Gulf Coast for storage of natural gas and other products,” says David.

Subsidence is critical at most of the SPR sites. Some of the domes are only five or six feet above sea level and researchers must know how they will behave with increased drilling and cavern excavation. This is especially important for the double-tiered cavern concept being considered at Clovelly. Chris Clutz (6141) is providing subsidence modeling input for the project.

Among the things that will have to be worked out are the optimal shapes and separation distances between caverns in the salt domes. Byoung Yoon (6821), an experienced WIPP researcher, is looking at issues related to salt creep and placing new caverns in particularly tight locations at Bayou Choctaw. Steve Sobolik (6117) is studying novel cavern shapes, while anticipated changes of shapes during operations are being simulated by Bruce Levin (6113).

Original design life for the caverns was defined as five complete drawdowns (full-empty cycles) of all the oil inside. But future usage may be different, with partial drawdowns at a more frequent rate. “The question becomes can we design caverns to be less vulnerable to these changes,” says Brian.

Chris Rautman and Anna Snider Lord (both 6113) are looking at seismic and well logs to delineate actual boundaries of the salt domes and existing caverns. They are using modeling software to construct images of the caverns and better define the real estate, where there is currently a lot of uncertainty.

Allan Sattler (6113) is studying the drilling history of the domes to gauge what events may impact future operations. In one case, for example, an oilfield logging tool was lost in a cavern. This kind of information also will be folded into the final decision-making.

Tight schedule

Sandia’s work at SPR will be far from finished with the current effort. Once the sites are selected, DOE will look to Sandia to be involved in site characterization, drill holes, and the actual leaching and operations of the caverns. But getting to that point has meant a tough, tight schedule.

“All this would normally take a year, but we need answers by mid-June,” Brian says. “We have already provided input for a draft Environmental Impact Statement. Secretary Bodman has already written the president recommending we go ahead. Now we must provide analysis to back that up and help guide the expansion plan, starting with site selection.”

“We had a short turnaround and a lot of people had to step to the plate in a nearly impossible time frame,” says David. “People have stepped up and accepted this challenge.”

SPR: Do we really need it?

Why is the Strategic Petroleum Reserve expanding? Is it worth a $30 billion investment that includes $3 billion in infrastructure and $27 billion in oil? At 5.5 million barrels a day, can SPR production really help the US in a crisis?

Economic and strategic experts say it can help and it’s worth the effort.

Brian Ehgartner, one of the Sandia project leads, notes that an economic study from Oak Ridge National Laboratory recently showed that there is a greater than 90 percent chance over the next decade that an event will occur somewhere in the world that will cost the US up to 5 million barrels per day of production. “The reserve is now being sized to make up that difference,” he says.

Although the US daily consumption of 20.7 million barrels a day is much higher, the critical difference is typically in product at risk, Brian explains. About 12 million barrels a day are imported to the US, with about five million of that coming from relatively stable resources in Canada and Mexico.

The SPR is designed to cover the balance of higher-risk sources, says David Borns. “The probabalistic situation is that you will lose production from the Persian Gulf, or Venezuela, or some other area for a certain amount of time. SPR is designed to absorb the difference.” As recently as Hurricane Katrina, this concept was illustrated when SPR production allowed a number of critical refineries to stay in normal operation until supply disruptions could be repaired.

Given the potential for terrorist disruption, increased global competition for oil, and dwindling supplies, reserves are much more valuable today, says Daniel Yergin, American author and economic researcher. While the standard way of thinking about economic security has been in terms of diversity of supply, Yergin now suggests the concept of “resilience of supply” as a new factor. This includes adequate storage.

In the future, the integration of infrastructure will play an increasing role, says David. Researchers in Sandia organizations 6200 and 5000 are examining these issues.

SPR uses natural geologic features

America’s emergency crude oil is stored in salt caverns, created deep within the massive salt domes that underlie much of the Texas and Louisiana coastline. These caverns offer a secure and affordable means of storage, costing up to 10 times less than aboveground tanks and 20 times less than hard rock mines.

Storage locations along the Gulf Coast were selected because they provide a flexible means for connecting to the nation’s commercial oil transport network. SPR oil can be distributed through interstate pipelines to nearly half of the US oil refineries or loaded into ships or barges for transport to other refineries.

A typical SPR cavern holds 10 million barrels and is cylindrical in shape with a diameter of 200 feet and a height of 2,000 feet. One storage cavern is large enough for Chicago’s Sears Tower to fit inside with room to spare. The Reserve contains 62 huge underground caverns, ranging from 6 to 35 million barrels capacity.

The federal government acquired previously created salt caverns to store the first 250 million barrels of crude oil in the mid-1970s. This was the most rapid way to secure an emergency supply of crude oil following the oil shocks of the 1970s. To stockpile oil beyond the first 250 million barrels, DOE created additional caverns, with scientific and engineering assistance from Sandia.

Salt caverns are dissolved out of underground salt domes by drilling a well into a salt formation, then injecting fresh water. The water dissolves the salt and creates the SPR caverns. The dissolved salt is removed and re-injected into disposal wells or piped several miles offshore into the Gulf of Mexico. Through careful control of the freshwater injection process, salt caverns of specific dimensions can be created.

The nature of the salt, a material Sandia engineers are very familiar with thanks to the Labs long-standing work at WIPP, makes the caverns mechanically and environmentally secure. At depths ranging from 2,000 to 4,000 feet, the salt walls of the storage caverns are somewhat plastic and self-healing. Should any cracks develop in the walls, they would be almost instantly closed under normal conditions.

A natural temperature difference between the top of the caverns and the bottom keeps the crude oil continuously circulating in the caverns, maintaining the oil at a consistent quality. As the caverns have aged, the thermal gradient has decreased, resulting in less circulation and in some cases stratification of oil, another topic of research at Sandia. The fact that oil floats on water is the underlying mechanism used to move oil in and out of the SPR. To withdraw the crude, water is pumped into the bottom of a cavern. The water displaces the crude oil to the surface. Each withdrawal affects the geometry and size of the caverns, enlarging and changing them slightly.

SPR timeline

Here’s a brief history of the Strategic Petroleum Reserve, world’s largest emergency supply of crude oil.

  • 1944: Secretary of the Interior Harold Ickes advocated the stockpiling of emergency crude oil.
  • 1952: President Truman’s Minerals Policy Commission proposed a strategic oil supply.
  • 1956: President Eisenhower suggested an oil reserve after the Suez Canal crisis.
  • 1970: A Cabinet Task Force on Oil Import Control recommended a similar reserve.
  • 1973-74: The cutoff of oil flowing into the US from many Arab nations sent economic shockwaves throughout the nation.
  • 1975: President Ford signed the Energy Policy and Conservation Act on December 22, establishing a reserve of up to one billion barrels of petroleum.
  • 1977: The government acquired several existing caverns in salt domes to serve as the first storage sites. Sandia’s involvement in the reserve begins.
  • 1977: On July 21 the first oil — approximately 412,000 barrels of Saudi Arabian light crude — was delivered to the reserve.
  • 1991: On January 16, coinciding with the international effort to counter the Iraqi invasion of Kuwait, President George H.W. Bush ordered the first-ever emergency drawdown.
  • 1995: Officials suspended filling the reserve to devote budget resources to refurbishing equipment and extending the life of the complex.
  • 1999: Filling resumed with royalty oil from federal offshore tracts.
  • 2001: In November, President George W. Bush ordered the SPR to be filled to approximately 700 million barrels by producers, who operate leases on the federally owned outer continental shelf.
  • 2005: On August 8, President Bush signed the Energy Policy Act of 2005 directing the Secretary of Energy to fill the reserve to its authorized one billion barrel capacity.
  • 2005: In late August, the SPR’s second emergency drawdown occurred after Hurricane Katrina caused massive damage to the oil production facilities, terminals, pipelines, and refineries along the Gulf regions of Mississippi and Louisiana.

SPR by the numbers

  • Current storage capacity — 727 million barrels
  • Current days of import protection in SPR — 59 days
  • Average price paid for oil in the reserve — $27.73 per barrel
  • Maximum drawdown capability — 4.4 million barrels per day
  • Time for oil to enter US market — 13 days from presidential decision
  • Investment to date — $22 billion ($5 billion in facilities; $17 billion for crude oil)
  • Number of people employed by SPR — about 1,050 including contractors
  • Number of years of Sandia involvement — 29
  • Number of digits in original Sandia case number — 3

Past emergency sales

  • 2005 Hurricane Katrina sale — 11 million barrels
  • 1991 Desert Shield — 17 million barrels