Strategic Oil Reserve will be opened up
President Bush has agreed to let Oil Companies borrow from the US Strategic Oil Reserve.
Bloomberg
has the story:
U.S. Taps Emergency Oil Reserve as Prices Surge
The U.S. will tap its emergency oil reserve after Hurricane Katrina shut down rigs and refineries in the Gulf of Mexico, disrupting gasoline supplies and leading to record crude-oil prices.
U.S. Energy Secretary Samuel Bodman said in an interview today in Washington the Strategic Petroleum Reserve can deliver 5 million barrels a day, more than three times the amount that has been closed in the Gulf. That much probably isn't needed now, he said. The area represents about 30 percent of U.S. production.
President George W. Bush's administration last used the reserve, created in the 1970s after the Arab oil embargo, to respond to Hurricane Ivan and shutdowns of rigs offshore in the Gulf. Whether the release causes prices to drop may depend on how soon refineries can restart. Valero Energy Corp. yesterday said one of its refineries may need two weeks to resume operations.
The question of refinery capacity comes up again:
The government's oil "is not going to be of much help unless we get refineries running again," Adam Sieminski, global oil strategist at Deutsche Bank AG in New York, said before the announcement. "Releasing oil from the SPR right now would be actually inappropriate because there would be no place to put it."
What would it take to plan a couple of new refineries. We need them but environmental regulations have stymied all plans for new ones for the last 20 years or more...
Posted by DaveH at August 31, 2005 9:57 PM