Posted on 08/06/2004 3:23:27 PM PDT by ambrose
Aug. 6, 2004, 11:49AM
Bush adding more oil to U.S. petroleum reserve
Reuters News Service
WASHINGTON - The Bush administration said today it was adding more oil to the U.S. emergency petroleum reserve, despite record high crude prices and strong oil demand.
The Interior Department said it awarded contracts to ChevronTexaco Corp. and Royal Dutch/Shell Group's Shell Oil to deliver more than 100,000 barrels of crude a day to the nation's Strategic Petroleum Reserve.
The oil will be delivered over a six-month period beginning on Oct. 1.
The administration is not buying the oil going into the reserve. The crude is coming from energy companies that turn over to the government a portion of the oil they drill on federal leases as royalties, instead of paying cash royalties.
The Bush administration has been criticized by energy experts and some politicians for taking oil off the market to put in the reserve at a time of high fuel prices and strong petroleum demand.
The campaign of Democratic presidential challenger John Kerry said on Friday it supports temporarily stopping oil shipments to the reserve while oil and gasoline prices are high.
"We believe we should suspend the fill of the reserve" at current prices, a Kerry spokeswoman said.
U.S. oil prices topped a record $44 a barrel this week at the New York Mercantile Exchange.
Higher energy costs raise expenses for U.S. businesses and cut into the money consumers have to buy goods and services that help the economy grow.
The Bush administration said it was better to have a large stockpile of oil on hand to respond to any major supply disruption and the amount of crude going into the reserve will not have a big effect on prices anyway.
"Filling the reserve to ensure that America has a ready supply of crude to prepare for any major supply disruption is vitally important," said an Energy Department spokeswoman.
"Current deliveries to the SPR are a tiny fraction, only 0.15 percent, of global oil demand, and have very little impact on oil prices," she said.
The Interior Department said it was on track to fill the emergency reserve to its 700-million-barrel capacity by the middle of next year.
The stockpile, created by Congress in the mid 1970s after the Arab oil embargo, currently holds 665 million barrels of crude in underground caverns at four sites in Texas and Louisiana.
It could be sold, or saved for a rainy day.
I very much like the idea of saving it.
Color me skeptical.
I don't think any action will come about from our own initiation.
If this were September, I'd share your concerns. However, the fact that it's only the first week in August means that distillate stocks will be in fine shape come wintertime (barring, of course, some exogenous event, but I rather doubt the jihadis will have any success at all trying to take out US refineries). Conversion from emphasis on cracking to emphasis on distilling is not a lengthy process. At this time of year, the refiners can probably get in a couple of weeks' maintenance and still be on schedule with distillate production.
I agree.
Key statement:
"Filling the reserve to ensure that America has a ready supply of crude to prepare for any major supply disruption is vitally important," said an Energy Department spokeswoman.
It is rather obvious that something must happen soon to stop Iran from developing atomic/nuclear weapons. The existence of Israel depends on it. Have we crossed the tipping point on war with Iran? Will Israel strike first? Or the US? Or Iran? What will the response of Pakistan and India be? Let alone NK, China and Russia.
Unfortunately, this could get alot uglier than a major disruption to our oil supply.
well if necessary he'll be able to sell off some of the oil before the election, and still quip that he hasn't "emptied" the oil reserves a la Clinton.
I am betting on an embargo of Iranian oil, with the approval of the IAEA, unless they give up the nuclear program. that may be coupled with some kind of internal revolt, helped by the CIA.
Yes, and people should know that each release from SPR damages it. Physically. Permanently. You can't do it for political purposes.
A completely stupid move.
fine, supplies are good.
what's the heating oil price going to be with crude at $45 a barrel?
Yeah, he did. And IIRC, it had zero affect on the pump prices.
This isn't just about Pres. Bush.
What about his obligations to every Republican in the country? If Bush loses, we are all besmirched. He's running an unfocused and foolish campaign. IMO
He needs to get his act together.
It still makes sense to fill the reserve when prices are low and selling oil when prices are high instead of putting it into the reserve. At $42/bbl, the federal government could decrease this year's deficit by selling the oil royalties it receives in-kind. I do not support pumping anything out of the ground if there is not an emergency.
TheDon...it must be interesting for the intel's to keep all these balls in the air.
Markets fluctuate. If we want to fill SPR, then BUY THE DAMNED DIPS! Geez, what's so difficult about that, eh? Too tricky a strategy for these Beltway bozos, evidently. If I traded in such a silly fashion, I'd be **very** broke.
Concur.
100,000 barrels a day is going into SPR. This is such a tiny fraction of what this country consumes each day that it has little to no effect on prices.
hell, maybe every country in the world is adding to THEIR spr right now.
I have a feeling he is more concerned about Saudi Arabian oil supply being disrupted. If the House of Saudi is overthrown the world economy is in trouble.
he's letting john kerry destroy john kerry.
The ads really haven't started yet. He let the libs shoot their wad, and the best they could manage was to pull even in some polls.
The election isn't going to be decided now. In 45 days if bush is just sitting there doing nothing, then I'll complain. But right now he's survived 3-4 months of the media completely pounding him with all sorts of bad news, real and imagined. The convention came and went and the bounce was a thud.
Have some patience. Once the ads start after the convention and bush, the rnc, and john kerry are all working together to make john kerry less likable, you'll see the results.
we've got alot of troops in that area that could be used to secure those fields. Iran is the problem.
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