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| Petroleum reserves tapped, EPA rules eased | ||
| 2005-08-31 | ||
| 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.
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." | ||
| Posted by:Steve |
| #8 Double what Ship said, Glenmore. I actually work at the EPA office in Atlanta which covers the SE up to Mississippi (Louisiana is covered by our Dallas office). I don't even work in the Air division, but this makes sense to me, if the loan is stopped when the offshore rigs are back on line. And, on the EPA air front (granted, I'm not an expert on the rules, never have even worked air stuff), I'm ready to tell the greenies to stuff it. I would note to you all that these "higher-polluting" gasoline is already sold in the rural areas of those states, and my guess is the only cities that get the cleaner fuel blend are Jackson, MS and Birmingham, AL (maybe Montgomery, AL too). Most of the coastal areas meet standards b/c of wind conditions. I wouldn't even venture to guess any cities in Florida don't meet standards, except maybe inland cities (Orlando?). Also, note that the sulfur content relaxation is on diesel. Not many diesel powered cars in the metro areas (areas where cleaner fuel is required). I guess the trucking industry is thankful, but overall, this isn't really gonna make a huge impact on air quality in those States. Louisiana could be a different matter, but they've got BIGGER issues to worry about. I just discussed this today, and everyone at work (EPA) went into moonbat status...."Oh, Bush is using this as an excuse to relax air standards nationwide...oh no, dirty fuel....oh, gas won't go over $3/gallon here, blah, blah, blah." I tried to explain that it was only those 4 states and only for a set period of time, but even the sensible people lashed out at me. THEN, this afternoon, they tried to drive home & fill up and found gas at $3.29/gallon+ (was $2.69 just yesterday) and long lines at all the stations around Atlanta (one station even had gas at $5.89/gal in metro Atlanta today)! I'm laughing all the way to the bank, because a buddy of mine owns a building where a new gas station just went in and gave me a "heads up" last night that they expected 30 cents/gal jump today and another 40-50 cents/gal tomorrow. I should be able to ride this storm (gas prices) out in a week or two. Should make for interesting discussions tomorrow. |
| Posted by: BA 2005-08-31 23:18 |
| #7 What Glenmore said. And glad you are safe and vandalizing your neighbors wifi. :> |
| Posted by: Shipman 2005-08-31 18:56 |
| #6 This strikes me as exactly the sort of thing the SPR was designed for. Not to lower prices. What is happening is the limited number of refineries in the US cannot get crude to refine because of loss of Gulf of Mexico production and loss of ports through which to import crude, so the SPR will 'loan' these refineries crude to allow them to continue to supply gasoline & diesel, etc. If production & import capacity is restored, they will (in theory) replace the crude they 'borrowed'. However, if the production/import shortfall continues too long (& it very well may), the SPR loans should be stopped so the supply can be made available for emergency military use. I'm evacuated from New Orleans area indefinitely but just got power back here in Baton Rouge (had 'poached' on a drive-by wi-fi earlier today). Still waiting for the apartment to drop below 93 deg. |
| Posted by: Glenmore 2005-08-31 18:37 |
| #5 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. But... I thought Hugo Chavez said he was going to donate fuel to the relief effort. Now we find out they're borrowing oil from the SPR here? |
| Posted by: Abdominal_Snowman 2005-08-31 18:14 |
| #4 Appearently what goes out of the reserve is a loan, which implies that the companies have to put it back in later. Its being released upon request from the refineries to the refineries. |
| Posted by: Slereger Slitle6846 2005-08-31 16:17 |
| #3 Boamb, the release of petroleum reserves will only replace that lost from Gulf of Mexico drilling rigs that are out of action. as soon as they are back on line the petroleum reserve release will end. |
| Posted by: Deacon Blues 2005-08-31 16:14 |
| #2 The Bush administration will release oil from federal petroleum reserves to help refiners affected by Hurricane Katrina, Energy Secretary Samuel Bodman said Wednesday. What the hell for? I seem to recall reading somewhere that what we're actually lacking is refinery capacity, and if that's true, providing more raw crude isn't going to make one damn bit of difference. As for refiners "affected" by the hurricane, aren't those largely OUT OF COMMISSION? How does a non-operating refinery make product??? |
| Posted by: Bomb-a-rama 2005-08-31 16:06 |
| #1 The relaxing of the EPA rules is already getting maximum covewrage on the Lefty blogs a s another indication that the President is hellbent on destroying the environment. No matter what he does he will be serverely criticised. Because of his war, money was diverted from New Orleans, even though the problem has been known about since the early '60s and nothing was done. Because of his war the National Guard is unable to provide enough people even thoug out of several million National Guardsmen only 118,000 are on active duty. Two people even called for his impeachment pecause "The National Guard is never supposed to leave the US. It is here to help in times of emergency." Buch of absolute idiots. |
| Posted by: Deacon Blues 2005-08-31 15:25 |