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Posted: 9/23/2004 11:21:07 PM EST
Oil is to partially offset production cutbacks from Gulf of Mexico oil fields that stopped pumping as a precaution against hurricane damage.

U.S. to Provide Limited Oil to Refineries From Reserve
By TOM RAUM, AP

WASHINGTON (Sept. 23) - The Bush administration announced Thursday it would provide U.S. refineries with ''limited quantities'' of crude oil from the nation's emergency stockpile to help offset supply disruptions along the Gulf Coast from Hurricane Ivan.
The move could help ease rising fuel prices and carries political implications less than six weeks from the presidential election.

The oil will be provided with the understanding that a like amount of crude, plus a bonus amount, will be returned to the Strategic Petroleum Reserve ''once supply conditions return to normal,'' the Energy Department said. It said terms of the deal were being negotiated.

While Democrat John Kerry has long urged Bush to use the reserve to ease oil costs, Bush in the past has resisted doing so. Bush criticized President Clinton for tapping into the reserve in 2000, suggesting it was a political gesture to help Democrat Al Gore, Bush's opponent in that year's election.

The oil would be in the form of a loan, or swap.

''I have authorized these negotiations in response to the physical destruction of offshore oil production and imports in the Gulf region caused by Hurricane Ivan's destruction,'' Energy Secretary Spencer Abraham said in a statement.

Administration officials said that several U.S. refiners had asked to borrow crude oil from the reserve, but did not say which ones or how much they sought.

Created in the 1970s after the Mideast oil embargo, the reserve now holds roughly 670 million barrels of crude oil in underground caverns in Texas and Louisiana - close to its capacity of about 700 million barrels. There are 42 gallons in each barrel.

White House spokesman Scott McClellan earlier told a White House briefing, ''We've always said the Strategic Petroleum Reserve was set up to protect against physical disruptions of oil supplies such as national emergencies or natural disasters, and not to manipulate prices or for political purposes. ''

And Hurricane Ivan, which shut down oil refineries in the Gulf Coast and kept tankers from port, qualifies as such a physical disruption, McClellan suggested.

''It has limited some refiners' access to crude oil supplies,'' McClellan said. He said it was important ''to make sure that our system continues to operate until production and imports resume.''

Meanwhile, Ivan, reconstituted as a tropical storm, on Thursday was again threatening the Gulf Coast, headed toward Texas and Louisiana.

Kerry spokesman Phil Singer noted that Kerry had been calling on Bush ''to use the SPR to ease oil costs for months,'' and last March had urged the administration to ''stop filling the SPR while record high prices and supply crunches squeezed American families.''

Singer accused Bush of acting only when ''a few oil refineries weigh in ... and just a few weeks before the election.'' Democrats have accused Bush and Vice President Dick Cheney, both former oil-industry executives in Texas, of being overly cozy with the industry.

Administration officials shrugged off such accusations and said there was a precedent for the loans: the Bush administration's approval of such loans of oil in October 2002 when Hurricane Lili disrupted Gulf Coast shipments.

Then, the Energy Department loaned refiners 300,000 barrels.

Senate Democratic leader Tom Daschle of South Dakota welcomed the move but suggested Bush should have used his authority months ago to tap into the reserve. He said high gas prices hit rural areas like his state particularly hard ''where people often have no choice but to drive long distances.''

The drop in supplies from the Gulf - which accounts for a third of domestic oil production - helped push up oil prices. Temporary loans of oil could help ease crude oil prices.

However, oil prices climbed toward $49 per barrel Thursday despite advance word that the administration was considering the assistance.

Analysts said the impact would ultimately depend on the amount of oil made available, though they expected the size of any loans - and the effect on prices - to be small.

Light crude for November delivery rose 30 cents to $48.65 per barrel in afternoon trading on the New York Mercantile Exchange, retreating from an intraday high of $49.

Fadel Gheit, senior oil and gas analyst at Oppenheimer & Co., said lending the oil is ''too little, too late'' and blamed the Bush administration for contributing to soaring prices with its policy of continuing to fill the stockpile.

The action drew approval from Sen. Charles Schumer, D-N.Y., a proponent of using oil from the reserve. ''This is the first crack in the armor,'' Schumer said. ''They should realize this is the best way to bring down fuel costs in short term.''

AP-NY-09-23-04 2349EDT


Link Posted: 9/23/2004 11:24:34 PM EST
WHY?

This is a stupid idea!


Gas prices are already low!


SGtar15
Link Posted: 9/23/2004 11:25:52 PM EST
Um...My disappointment at Bush opening up the SPR is exceeded only by John Effing Kerry's insistance that we should have done so long ago.

Christ. Let's see, who cares LESS about this country's ability to go to war?
Link Posted: 9/23/2004 11:28:48 PM EST
Im somewhat glad to see that happen, I quess.

Are/were they still filling the SPR, if they get it to capacity I expect that would free up a decent amount of demand also since we wouldnt be buying anymore to fill it.
Link Posted: 9/23/2004 11:33:14 PM EST

Originally Posted By sgtar15:

Why? ... Gas prices are already low!



... One of the few times I agree with the "G" man!
Link Posted: 9/24/2004 3:44:44 AM EST
Up
Link Posted: 9/24/2004 3:48:34 AM EST
Low? I'm paying $1.89 a gallon here. I don't consider that LOW!
Link Posted: 9/24/2004 3:50:12 AM EST

Originally Posted By sgtar15:
WHY?
This is a stupid idea!
Gas prices are already low!
SGtar15



Duh ! Presidential election. Bush is running for President.
Glad to see you up on current events.
Link Posted: 9/24/2004 3:51:38 AM EST

Originally Posted By cwd10:
Low? I'm paying $1.89 a gallon here. I don't consider that LOW!



Hey, thats what we are paying here.

I spend 200 dollars on fuel that I could be spending on something else at these price levels. That has to hurt the economy as a whole.
Link Posted: 9/24/2004 3:52:50 AM EST

Originally Posted By cwd10:
Low? I'm paying $1.89 a gallon here. I don't consider that LOW!



Compared to gasoline prices in the UK, France, Germany and Japan, that's VERY low. Around $5.00 a gallon is what they pay there, if not more.
Link Posted: 9/24/2004 3:55:29 AM EST

Originally Posted By 95thFoot:

Originally Posted By cwd10:
Low? I'm paying $1.89 a gallon here. I don't consider that LOW!



Compared to gasoline prices in the UK, France, Germany and Japan, that's VERY low. Around $5.00 a gallon is what they pay there, if not more.



That price has been driven up artificially through different taxes
Link Posted: 9/24/2004 3:58:43 AM EST
[Last Edit: 9/24/2004 3:58:59 AM EST by sherrick13]
Link Posted: 9/24/2004 4:07:32 AM EST
"Compared to gasoline prices in the UK, France, Germany and Japan, that's VERY low. Around $5.00 a gallon is what they pay there, if not more" Well, we don't live if fucking Europe, do we?
Link Posted: 9/24/2004 4:12:14 AM EST
Gas was $.10 higher here this morning.

Link Posted: 9/24/2004 4:14:35 AM EST
670,000,000 barrels, that is a shitload of gasoline
Link Posted: 9/24/2004 4:15:18 AM EST

Originally Posted By VTHOKIESHOOTER:

Originally Posted By 95thFoot:

Originally Posted By cwd10:
Low? I'm paying $1.89 a gallon here. I don't consider that LOW!



Compared to gasoline prices in the UK, France, Germany and Japan, that's VERY low. Around $5.00 a gallon is what they pay there, if not more.



That price has been driven up artificially through different taxes



No flame intended, but belay that tired old leftist crap about Japan, France, Germany, etc. Their own taxes have artificially raised the price of their gasoline AND the countries named here have NO petroleum reserves whatsoever and have to import ALL of their fuel.
Link Posted: 9/24/2004 4:17:30 AM EST
Right now Gulf Coast refineries are starved for oil. Releasing oil directly to them will keep their production up and prevent any price spikes in important electoral regions of Florida and Louisiana.

GunLvr
Link Posted: 9/24/2004 4:20:04 AM EST

Originally Posted By sherrick13:
He is using it exactly for what it is intended.





No, he's not.

It's called the Strategic Petroleum Reserve - not the "I'm whining about high prices reserve."

The SPR should be used for legitimate disruptions in the oil flow, not because of high prices. I'm going to disagree with W on this one.

CMOS
Link Posted: 9/24/2004 4:29:12 AM EST

Originally Posted By CMOS:

Originally Posted By sherrick13:
He is using it exactly for what it is intended.





No, he's not.

It's called the Strategic Petroleum Reserve - not the "I'm whining about high prices reserve."

The SPR should be used for legitimate disruptions in the oil flow, not because of high prices. I'm going to disagree with W on this one.

CMOS



so the effects of a hurricane are not included in your definition of "legitimate disruptions"?
Link Posted: 9/24/2004 4:31:22 AM EST

Originally Posted By cwd10:
"Compared to gasoline prices in the UK, France, Germany and Japan, that's VERY low. Around $5.00 a gallon is what they pay there, if not more" Well, we don't live if fucking Europe, do we?




Then compoare it to gas prices against milk price in the 1970's.

Back then gas was .85 centsa gallon....30 years ago!


PRICES ARE LOW!!


SGatr15
Link Posted: 9/24/2004 4:47:50 AM EST

Originally Posted By CMOS:

Originally Posted By sherrick13:
He is using it exactly for what it is intended.





No, he's not.

It's called the Strategic Petroleum Reserve - not the "I'm whining about high prices reserve."

The SPR should be used for legitimate disruptions in the oil flow, not because of high prices. I'm going to disagree with W on this one.

CMOS



A Cat 4 (sometimes 5) hurricane wrecking gulf-of-mexico oil platforms would be a 'legitimate disruption' IMHO...
Link Posted: 9/24/2004 5:04:49 AM EST
Link Posted: 9/24/2004 5:10:03 AM EST

Originally Posted By CMOS:

It's called the Strategic Petroleum Reserve - not the "I'm whining about high prices reserve."

The SPR should be used for legitimate disruptions in the oil flow, not because of high prices. I'm going to disagree with W on this one.

CMOS





+1
Link Posted: 9/24/2004 5:14:45 AM EST
Everything I've read says he pulled the oil because of the declared natural disaster (aka hurricanes). This is an "emergency". Gas prices were higher a couple of months ago. He's not doing it just to keep prices down, he's doing it because the oil companies said they are having problems because of the weather. I'll admit the fact that we are this close to the election couldn't have hurt, but it needs to be done.
Link Posted: 9/24/2004 5:32:37 AM EST
$2.10 a gallon here. I don't feel that prices are low.
Link Posted: 9/24/2004 5:32:41 AM EST
Let's see... Multiple natural disasters in the past 60 days have disrupted oil production in the Gulf of Mexico causing a drop in the amount of crude arriving at Gulf coast refineries.

When I have unexpected bills, I pull an appropriate amount of money from my savings account to offset the unplanned expenditure so my family and I don't HAVE to live off of raman noodles for a few weeks. I just continue to put money into the savings accont on a regular schedule and over time it returns to the same level as before, but more then likely it EXCEEDS the previous level.


I don't see where the decision to utilize a small portion of the NOR to offset an unexpected drop in outside supply in order to maintain a delicate, oil based economy from taking a down slide that could take MONTHS to recover from is a bad idea. In fact it seems like the SMART thing to do.
Link Posted: 9/24/2004 6:28:24 AM EST
[Last Edit: 9/24/2004 6:29:06 AM EST by Max_Mike]

Originally Posted By DPeacher:
Let's see... Multiple natural disasters in the past 60 days have disrupted oil production in the Gulf of Mexico causing a drop in the amount of crude arriving at Gulf coast refineries.

When I have unexpected bills, I pull an appropriate amount of money from my savings account to offset the unplanned expenditure so my family and I don't HAVE to live off of raman noodles for a few weeks. I just continue to put money into the savings accont on a regular schedule and over time it returns to the same level as before, but more then likely it EXCEEDS the previous level.


I don't see where the decision to utilize a small portion of the NOR to offset an unexpected drop in outside supply in order to maintain a delicate, oil based economy from taking a down slide that could take MONTHS to recover from is a bad idea. In fact it seems like the SMART thing to do.



They lost at least one oil rig in the gulf during Ivan.

With the drop of production in the Gulf and winter coming this seem a prudent action to me.

With oil prices as high as they are cause a sever hardship for those on a fixed income and with fuel oil deliverers beginning any price spike now will make that worse.
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