OUR DETERMINATION to fill up the Strategic Petroleum Reserve makes as much sense today as adding a few million more bricks to the Great Wall of China. Both were great ideas at the time, and it makes us feel better knowing each is still there. But in today's world, an oil-cartel embargo is as threatening to Americans as hordes of invading Mongolians on horseback would be to the Chinese.
In 1974, an ominous danger loomed over our national economy, military defense and personal well- being. The Arab nation portion of OPEC had cut off its crude exports to the United States, and threatened to paralyze the nation. We were in real trouble, and we needed a sound, long-range defense.
We saw as the solution a national petroleum reserve that would hold enough oil to reduce our vulnerability -- a reserve that would give us enough lead time to find other sources if another embargo was attempted. Our goal was to put away 750 million barrels which -- given our sources, consumption rates and import rates in 1975 -- would last us 180 days.
The years have passed since then, and our friends and foes have changed. Who is the biggest threat to our national oil supplies in 1985? The Arab portion of OPEC nations? Not by a long shot. Only 19 percent of our supply comes from Arab OPEC nations, and over half of that is supplied by Saudi Arabia, the bulwark of freedom and stability in the Middle East today.
Who, then, is our largest foreign crude supplier from whom we must protect ourselves? We must be talking about those dreaded infidels intent on paralyzing our nation from the south -- the Mexicans. Twenty percent of our foreign crude oil supply -- more than from any other source -- comes from Mexico.
If not the Mexicans, then we must be living in fear of our second largest foreign crude supplier, those infamous barbarians to the north -- the Canadians.
If indeed we do not fear being held hostage by the Mexicans or the Canadians -- who share not only our hemisphere, our continent and our borders, but virtually all of our economic interests -- then what is the reason for our insecurity today?
Certainly, we don't fear the sudden disappearance of a single geographic supply source. For most of the refineries in this country, and within certain limitations throughout the world, oil is oil, regardless of where it comes from, whether it is heavy or light, or what sulphur properties it may contain. If one source can't supply it, another one will.
Nor do we still count on importing large amounts of petroleum products from sources in the Caribbean. Much of the crude used in those products came from Arab OPEC nations. However, with the closing of many Caribbean refineries, our reliance on Arab OPEC nations for refined products also has declined.
So why, then, why do we continue with such blind determination to fill the Strategic Petroleum Reserve to the brim with 750 million barrels of crude oil? Simply because we have not adjusted our long-range storage goal to fit the real world oil supply situation. By stopping now, the administration could reduce the federal deficit by as much as $8 billion over the next five years. If the House decides to turn down the 1986 appropriation for the reserve later this month, there would be the bonus of cutting demand for imported oil by 58 million barrels a year, creating additional downward pressure on the world price of oil which would contribute our continued economic growth.
Through the end of 1984, the United States had imported about 3.2 million barrels per day of refined products, such as gasoline. If all imports were cut off, this country would have about 85 days of supply in storage.
In reality, however, all of these imports would not be cut off, no matter what conditions prevailed. Mexico in the south, Canada in the north and Western Europe together supply 45 percent of all our imports. Non-Arab OPEC nations supply over 25 percent. Thus, the worst possible situation we might sustain today is that our imports would be reduced to 1.5 million barrels per day of crude, and 500,000 barrels per day of refined products. And even that amount is highly unlikely, considering the interchangeable nature of crude oil sources.
That's an aggregate potential maximum loss of 2 million barrels per day. With 450 million barrels of crude in the Strategic Petroleum Reserve today, the United States thus has at least a 220-day supply. If we assume a loss of only Arab OPEC crude and products refined from Arab OPEC crude, our SPR reserve supply is really more than 500 days.
In Washington, Energy Secretary John Herrington has said that a David Stockman-proposed moratorium on filling the SPR is only a temporary measure brought about by federal budget constraints. The original 750-million barrel goal total remains unchanged. His opinion has been echoed throughout the halls of Congress, albeit by those who represent the areas of Texas and Louisiana where existing or proposed storage sites are located.
I would have to disagree. We've already invested more than $15 billion in the Strategic Petroleum Reserve, and present plans call for spending an additional $2 billion per year over just the next three years for more oil and further construction. In my opinion, enough is enough.
Let's stop filling the Strategic Petroleum Reserve past the point of all reasonable and prudent protection. Let's call a moratorium on any further expansion of facilities. Only by doing this can we begin putting an end to our outdated fears.