Newswise — The United States maintains several strategic stockpiles that the states and federal government can draw from when supply shocks occur. The most prominent among these are the Strategic National Stockpile (SNS), a reserve of essential medical supplies, and the Strategic Petroleum Reserve (SPR), a vast storage system of oil. Together, these stockpiles are intended to strengthen national security and protect U.S. foreign policy prerogatives during times of crisis.
The 2020 coronavirus pandemic has focused attention on the SNS, which many have criticized as being inadequately supplied. Meanwhile, some have questioned the need to maintain the SPR given the boom in U.S. oil production over the last decade.
What is the Strategic National Stockpile?
The SNS grew out of an earlier program, the National Pharmaceutical Stockpile, which Congress created in 1999 to serve as an emergency supply of drugs and vaccines in the wake of a terrorist attack or other crisis affecting public health. It was overseen by the Centers for Disease Control and Prevention (CDC). In 2003, amid a sweeping government reorganization prompted by the 9/11 terrorist attacks, it became the SNS, and in 2018 was placed under the authority of another body within the Department of Health and Human Services (HHS).
The SNS contains a slew of medical supplies and equipment, including antibiotics, antivirals, vaccines, ventilators, and beds, stored in secret locations across the country to supplement state and local resources. Some of the materials are organized into “twelve-hour push packages”—each contains fifty tons of medical supplies that can be rapidly deployed to another part of the country. The exact contents of the stockpile are kept secret for security reasons, but it holds about $8 billion worth of inventory, according to Greg Burel, who directed the SNS for more than twelve years. The composition of the stockpile is determined by a special interagency body that includes experts from the CDC, the Food and Drug Administration, and the National Institutes of Health.
Governors can request supplies from the SNS to respond to a health emergency in their state. The federal government can also deploy SNS resources at the discretion of executive branch leaders.
The SNS has been used to respond to a range of crises since its inception, including the 9/11 terrorist attacks; Hurricane Katrina; and outbreaks of Zika, Ebola, H1N1, and, most recently, the new coronavirus. But because the SNS was initially designed and funded to handle chemical, biological, radiological, and nuclear (CBRN) events, experts, including Burel, say it has not received the necessary funding for pandemic preparedness.
Major Uses of the Strategic National Stockpile
1999: The National Pharmaceutical Stockpile is created.
2001: The stockpile is used to respond to the 9/11 terrorist attacks and subsequent anthrax attacks.
2003: The stockpile is renamed the Strategic National Stockpile (SNS).
2005: The SNS is activated in response to Hurricanes Katrina and Rita, providing beds, medicines, vaccines and insulin to Louisiana and Mississippi.
2009: The SNS responds to the H1N1 outbreak by delivering antivirals and personal protective equipment (PPE) to health-care facilities.
2017: The SNS is tapped following Hurricanes Harvey, Irma, and Maria. It deploys federal medical stations in Texas and Puerto Rico and a ten-thousand-square-foot medical distribution center in Puerto Rico.
2020: The SNS responds to the COVID-19 pandemic, shipping more than twelve thousand tons of cargo, including PPE and other materials.
Robert Kadlec, the Donald J. Trump administration’s official in charge of public health preparedness, has acknowledged that his focus coming into his role in 2017 was readying the country for a bioterrorist attack involving smallpox, anthrax, or other deadly pathogens.
What is the Strategic Petroleum Reserve?
The SPR was created in response to the 1973 oil embargo by the Organization of Petroleum Exporting Countries (OPEC), imposed as retaliation for the United States’ support of Israel during the Fourth Arab-Israeli War. The Energy Policy and Conservation Act, signed into law by President Gerald Ford in 1975, created the SPR to shield the U.S. economy from future oil supply shocks, including those engineered by oil-producing countries attempting to gain foreign policy concessions.
The president may authorize a withdrawal from the SPR in response to a “severe energy supply interruption,” or order a more limited drawdown of up to thirty million barrels. Only three such authorizations have occurred: in 1991, during Operation Desert Storm; in 2005, in response to Hurricane Katrina; and in 2011, during the conflict in Libya. The SPR can also be used for so-called exchange agreements, under which oil is effectively loaned during a supply disruption to a refiner that then must repay it along with additional barrels. These agreements have occurred more commonly, including after Hurricane Harvey in 2017. Congress has at times mandated the sale of oil from the SPR to raise revenue.
The SPR can hold up to 714 million barrels of oil across its four storage sites—a network of underground caverns in Texas and Louisiana. At the end of 2019, it held approximately 635 million barrels, equivalent to more than one thousand days of net petroleum imports at that time. Up to 4.4 million barrels can be withdrawn per day, with the oil taking about two weeks to reach the market from the time of the president’s declaration. For comparison, the United States consumed about 20.5 million barrels of oil per day in 2019, according to the U.S. Energy Information Administration.
What else does the U.S. stockpile?
The United States maintains a few lesser-known stockpiles. The Northeast Home Heating Oil Reserve is a stockpile of one million barrels of diesel fuel kept in Connecticut, New Jersey, and Massachusetts to supply the northeastern United States, where the majority of heating oil is used. The federal government also has a stockpile of helium near Amarillo, Texas, that accounts for 27 percent of the domestic supply. While it was initially hoarded for use in military blimps, helium today is used in rockets and in superconductors. Congress, however, has ordered the reserve to be shut down by 2021. Additionally, the Defense Department reportedly stockpiles rare earth magnets, used in missiles and fighter jets, as it seeks to curb its reliance on Chinese sources. The Pentagon also maintains a National Defense Stockpile of about $1.1 billion worth of various metals.
The government has in the past stockpiled food, but these programs were mainly to support farmers hurt by low prices. For example, in the late 1970s and early 1980s, the Department of Agriculture (USDA) bought surplus dairy products, which it distributed to Americans via various welfare programs. Food stockpiling has been a point of debate in negotiations at the World Trade Organization because some critics say it distorts trade flows.
Today, the USDA still buys various commodities for both domestic and international food aid programs. It also maintains a vault in Fort Collins, CO, that houses thousands of plant species and genetic material of livestock in the event of a disaster.
The SNS does not contain food reserves, but the Federal Emergency Management Agency (FEMA) stockpiles food, water, generators, and other resources in eight distribution centers located in the United States and its territories.
Are there global stockpiles?
There aren’t many. The United States is a member of the International Energy Agency, which was created around the same time as the SPR following the oil crisis. IEA members pledge to hold at least ninety days worth of net oil imports, which can be collectively released during supply shortages. The oil released by the United States during all three emergency SPR drawdowns was part of a coordinated IEA action.
The Svalbard Global Seed Vault safeguards the world’s flora in the event of a major disaster. The vault holds nearly one million seed samples inside a mountain on a remote Norwegian island in the Arctic.
What are the debates over U.S. stockpiles?
Strategic National Stockpile. The SNS has been criticized for being chronically underfunded and ill-prepared to handle the coronavirus pandemic. President Trump has blamed the Obama administration for failing to resupply the SNS after it utilized stocks during the H1N1 outbreak. However, others point out that the Trump administration did not replenish the stockpile despite warnings from HHS.
CFR’s Tom Frieden, who led the CDC during the Barack Obama presidency (2009–2017), when the agency was responsible for the SNS, says the Trump administration failed to maintain existing ventilators, and then failed to procure new ones along with respirator masks in early 2020, when other countries around the world were doing so.
The Trump administration is now moving to update and plug holes in the stockpile. One administration official said that, as of May, the SNS only carried 28 percent of the items a patient needs to recover from the new coronavirus disease, COVID-19.
Frieden suggests returning oversight of the SNS to the CDC, saying that it was better able to coordinate with state and local officials to deploy the stockpile. He also urges greater transparency in how the SNS is managed, including the costs of different stockpiled products. “It is absolutely essential that these life-and-death decisions be insulated from any commercial or political pressures that could lead to purchases that don’t maximize saving lives,” he says.
Strategic Petroleum Reserve. Some analysts have called for an end to the SPR, contending that market forces and private stockpiles are sufficient to shield the United States from a negative supply shock. Others disagree. CFR’s Amy Myers Jaffe, an expert on energy politics, says the SPR remains an important tool for managing swings in the supply of oil, particularly heavier crude, for which the United States continues to rely on imports.
“When people tell me that we don’t need the SPR, I’m always a little nervous about that because things change,” she says. “Many past predictions about oil markets have been wrong.”
While there is an abundance of oil in the world now, a tighter market in the future is possible. In that case, the United States and its allies would need a stockpile to prevent oil producers from attempting to extort them for foreign policy gains, such as sanctions relief, Jaffe says.
Still, Jaffe says the reserve could be modernized. For instance, it could hold a greater balance of heavy crude and act as more of a market buffer, absorbing oil when prices are low and releasing it when prices are high, she says.
There is also concern about the capacity of the country’s broader oil infrastructure and the implications for the SPR. A 2016 review by the Department of Energy warned that aging surface infrastructure, such as storage tanks and pumps, if left unchecked, will begin to compromise the SPR’s capabilities. The surge in U.S. production and resulting congestion in pipelines could leave the SPR unable to effectively deliver oil without shutting off domestic suppliers, the agency also said. The report recommended investing in additional marine terminals to remedy this.
Other Link: "The State of U.S. Strategic Stockpiles", Backgrounder, CFR.org, June 15, 2020 Anshu Siripurapu