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9/22/2017 12:11:25 AM
Posted: 8/31/2005 7:16:00 AM EDT
[Last Edit: 8/31/2005 7:17:22 AM EDT by twonami]
apnews.excite.com/article/20050831/D8CASD600.html
had to happen sooner or later


White House to Release Oil From Reserves




Aug 31, 11:02 AM (ET)

By EILEEN PUTMAN




WASHINGTON (AP) - The Bush administration will release oil from federal petroleum reserves to help refiners affected by Hurricane Katrina, Energy Secretary Samuel Bodman said Wednesday.

The move, which was expected later in the day, is designed to give refineries a temporary supply of crude oil to take the place of interrupted shipments from tankers or offshore oil platforms affected by the storm.

The U.S. Minerals Management Service said Tuesday that 95 percent of the Gulf of Mexico's oil output was out of service. Oil prices surged back above $70 in European markets on Wednesday but slipped quickly to $69.56 after disclosure of the decision involving the release of supplies from the Strategic Petroleum Reserve. Eight refineries were shut down due to Katrina - half of them producing gasoline.

The government's emergency petroleum stockpile - nearly 700 million barrels of oil stored in underground salt caverns along the Texas and Louisiana Gulf Coast - was established to cushion oil markets during energy disruptions.


The production and distribution of oil and gas remained severely disrupted by the shutdown of a key oil import terminal off the coast of Louisiana and by the Gulf region's widespread loss of electricity, which is needed to power pipelines and refineries.

The Environmental Protection Agency, seeking to avert a severe supply crunch, announced it would temporarily allow the sale of higher-polluting gasoline in Alabama, Florida, Louisiana and Mississippi because those states can't provide enough fuel to consumers that meets Clean Air Act requirements.

The agency also said those states will be allowed to use motor vehicle diesel fuel with a sulfur content higher than the 500 parts per million standard for the next two weeks through ozone season.

President Bush, meanwhile, was returning to Washington on Wednesday to oversee the federal response to Katrina. He planned to chair a meeting of a White House task force set up to coordinate federal efforts, across more than a dozen agencies, to assist hurricane victims.

Bush also was expected to visit the ravaged region by week's end, but details on that trip were in flux as the White House worked to make sure a presidential tour would not disrupt the relief and response efforts.

Bodman, speaking on CNBC, said the decision to release reserves was made late Tuesday.

"In a word. It is going to be done," Bodman said. "Last evening it was approved and I think you'll be seeing an announcement about it later in the day. So we are doing everything we can to be responsive."

He said the reserve was contained in five sites, four of which are operative. The site in New Orleans is not.

Bodman said it was too early to say how much oil would be released.

He said his department was dealing with inquiries from three companies about getting oil from the reserve. On Monday, Citgo Petroleum Corp. asked for 250,000 to 500,000 barrels to ensure that its Lake Charles, La., refinery doesn't run out.

"There is an issue with respect to getting electrical power so that we can operate the various pipe lines that supply fuel to the rest of the country," he said, noting that these facilities "deliver finished products, diesel and gasoline, to the Northeast and to the Southeast."

"Our job is to get the infrastructure going again," Bodman said. "To the extent that we have delays in getting these pipelines functioning, then were are going to have the potential for gasoline shortages." Bodman said the administration will "do everything we can do to get fuel available to the rest of the country."

Of tapping the SPR, Bodman said: "Technically it's called an exchange of oil that we deliver today and that we will get oil back plus some interest, if you will, in the future. We will be tapping that today."

Interviewed on the Fox News'"Fox and Friends First," Bodman was asked if price gouging is taking place.

"I would like to believe that in this time of crisis that all of us are going to pull together to try to deal with this very difficult circumstance and situation that's confronting not just this region, but this country," he replied. "We're hopeful of that, but if we have some bad actors, we have a mechanism to deal with it."

Link Posted: 8/31/2005 7:17:13 AM EDT
wont do much good seeing how we have no way to refine it.
Link Posted: 8/31/2005 7:17:17 AM EDT
[Last Edit: 8/31/2005 7:20:38 AM EDT by glockguy40]
well I'll be damned. That means things are way beyond fucked.

ETA: You know how much it is going to cost to replenish the strategic reserve at these oil prices.
Link Posted: 8/31/2005 7:18:30 AM EDT

Originally Posted By Stormtrooper:
wont do much good seeing how we have no way to refine it.


+1.

Maybe Chavez will refine it for us.
Link Posted: 8/31/2005 7:19:44 AM EDT
[Last Edit: 8/31/2005 7:25:01 AM EDT by Grunteled]

Originally Posted By Stormtrooper:
wont do much good seeing how we have no way to refine it.



Ummmm we are down a million barrels of crude from the shutdown in the Gulf. That means there is refining capacity not being used. This seems to fill the bill for a crisis situation.

ETA: That figure came from the radio. Still the rise in cost is was attributed to crude shortages not to refinery shutdowns. I'm not sure which is true.
Link Posted: 8/31/2005 7:20:02 AM EDT

Originally Posted By Wobblin-Goblin:

Originally Posted By Stormtrooper:
wont do much good seeing how we have no way to refine it.


+1.

Maybe Chavez will refine it for us.



Link Posted: 8/31/2005 7:20:49 AM EDT

Originally Posted By glockguy40:

ETA: You know how much it is going to cost to replenish the strategic reserve at these oil prices.



THAT is going to SUCK.
Link Posted: 8/31/2005 7:40:51 AM EDT

Originally Posted By Grunteled:

Originally Posted By Stormtrooper:
wont do much good seeing how we have no way to refine it.



Ummmm we are down a million barrels of crude from the shutdown in the Gulf. That means there is refining capacity not being used. This seems to fill the bill for a crisis situation.

ETA: That figure came from the radio. Still the rise in cost is was attributed to crude shortages not to refinery shutdowns. I'm not sure which is true.



+1 on this.

The reserve should be saved for a national emergency. Clinton drained it for what? $40 a Bbl oil? At $70 with a CRUDE shortage due to a hurricane, I'd say we have ourselves an emergency.
Link Posted: 8/31/2005 7:59:14 AM EDT
Just heard the refineries are knocked down. Several of them. That's BAD news. That means the Oil Reserve release will likely be a feel good event.
Link Posted: 8/31/2005 8:25:56 AM EDT
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