Good morning, this is the Oil Patch. We're the freshly ground, freshly brewed, oil and gas news...just for you.

Here's what the Oilman has for you today:

• Fill 'Er Up Please: The SPR That Is

• Credit Where Credit is Due: Why Nuclear Energy is Key

• Big Oil, Energy Innovation, and Geopolitical Tensions: What to Expect at CERAWeek 2023

• Tweet of the Day

Fill 'Er Up Please: The SPR That Is

After selling 180MM barrels of oil in the last year, the US Department of Energy is thinking about maybe starting to refill the Strategic Petroleum Reserve (SPR).

The department plans to start buying crude oil soon...

...Depending on the market situation.

It might just be the Oilman, but...it doesn't sound like they are really ready to pull the trigger on this refill.

Sweet & Sour

Christopher Roark, a senior crude oil marketing analyst at the department, said the government could respond – promptly even – if prices dipped in the market.

And how would the DOE act quickly and promptly? By acquiring oil through a competitive solicitation process.

Sounds like that process might take some time.

The purchase amount of 40MM-60MM bbls of crude will be determined by the approximately $4.5B from the previous SPR sale. The department aims to limit the purchase of light, sweet crude to about 20MM bbls and sour supply for the rest.

But It Could Be A Logistical Nightmare

Refilling the reserve requires scheduling plans around ongoing maintenance at the underground storage facilities in Texas and Louisiana. Roark expressed caution about possible slippage due to maintenance work. And, the SPR has a continued drawdown rate of 4.2MM bbls per day, while the fill rate is about 685M bbls/day.

Wait, the SPR is Still Drawing Down?

Yes. The DOE is completing previous, congressionally-mandated crude drawdowns before refilling the SPR. The last mandatory crude sale ends in April and June for the Big Hill and West Hackberry SPR facilities in Texas, respectively.

The department's strategic plan aims to get the best value for taxpayers while avoiding market impact. Promptly. Quickly...

Maybe.

Credit Where Credit is Due: Why Nuclear Energy is Key

In a surprising move, the Biden administration has announced that it will offer $1.2 billion in aid to distressed nuclear power plants.

The funding, which comes from the Civil Nuclear Credit program, will be distributed by the Department of Energy (DOE) and is available to plants at risk of closure within a few years.

Nuclear Power Has Got A Bad Reputation

However, nuclear power plants are actually a reliable and efficient source of energy that emit virtually no air pollutants. They are designed and operated with multiple safety systems in place to ensure that the risk of accidents is minimized.

Additionally, nuclear power plants are capable of generating electricity around the clock, unlike solar and wind power plants that rely on weather conditions.

This means that nuclear energy can provide a consistent source of electricity to communities, even during peak demand periods.

First Time That Funding is Available to A Closed Plant

The Palisades plant in Michigan can apply, which closed in May 2022. Although Holtec International, the current owner of the plant, had applied for the first round of funding and was rejected, it has recently applied for a different source of funding to reopen the plant.

Though the Biden administration has been somewhat indifferent to maintaining nuclear energy, as they say, it's never too late to change your mind.

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Big Oil, Energy Innovation, and Geopolitical Tensions: What to Expect at CERAWeek 2023

Top energy executives and officials from around the world will convene at CERAWeek in Houston next week. The event will address long-term energy security and the "low-carbon" industry of the future.

The Oilman votes for carbon-rich future. You know you're made of carbon, right?

The invasion of Ukraine by Russia last year has led to distortions in global oil supply lines, and governments worldwide have energy security at the forefront of their minds. Record numbers of attendees, with over 7,000 people registered, will discuss fossil fuels, clean energy, and advanced energy storage.

But Not Everyone is Attending

The clashes between the OPEC, Europe, and the U.S. over supply and demand have led to visible vacancies.

There will be fewer OPEC participants, and Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates will be absent from the agenda. Despite becoming less of a factor in global markets, executives from Big Oil and shale will attend, even if they're not in the direct limelight.

The Event Will Feature Technological Innovation

...both in oil and liquefied natural gas (LNG) and focus on "low-carbon" industry, hydrogen, carbon capture, and electric power. The event will also feature 225 start-ups, 60% more than last year, with a focus on "low-carbon" and clean energy technology.

The need for hydrocarbons from an energy reliability and security standpoint is recognized, but lip-service will still be paid to the "low-carbon" industry and "decarbonization."

Around the Digital Patch

🐂 TX Railroad Commission challenges EPA.💲 Record profits for Canadian oil sands. 💨 Exxon admits emissions error.

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