Question

The U.S. Strategic Petroleum Reserve was established in 1975 for the purpose of:

(A) To reduce the impact of oil price shocks on the U.S. economy.
(B) To provide a source of emergency oil in the event of a supply disruption.
(C) To promote the development of alternative energy sources.
(D) All of the above.

Answer 1

The U.S. Strategic Petroleum Reserve was created to reduce the impact of oil price shocks and to provide a source of emergency oil in case of a supply disruption, addressing parts (A) and (B) of the listed options.

Step-by-step explanation:

The U.S. Strategic Petroleum Reserve (SPR) was established in 1977 following the Arab Oil Embargo of 1973-74, which highlighted the nation's vulnerability to oil supply disruptions. The primary purpose of the SPR is to serve as an emergency stockpile that can be tapped to alleviate the effects of potential future supply disruptions.

The SPR serves multiple purposes:

• Reduce the impact of oil price shocks on the U.S. economy by providing supplementary oil during significant disruptions in supply.
• Provide a source of emergency oil in the event of a supply disruption, ensuring economic and national security.
• Promote the development of alternative energy sources, although this is not a direct purpose of the SPR itself but more a broader energy policy goal.

The correct option, considering the SPR's primary objectives, would be: (A) To reduce the impact of oil price shocks on the U.S. economy and (B) To provide a source of emergency oil in the event of a supply disruption.