Posted on 08/31/2005 4:33:08 AM PDT by BulletBobCo
WASHINGTON - Energy Secretary Samuel W. Bodman said Wednesday the Bush administration will release oil from petroleum reserves to help refiners affected by Hurricane Katrina. An announcement was expected later in the day.
The move is designed to give refineries in the Gulf Coast area a temporary supply of crude oil to take the place of interrupted shipments from tankers or offshore oil platforms affected by the storm.
(Excerpt) Read more at msnbc.msn.com ...
The main excuse you hear time and again is that this country does not have the refining capacity. And you will hear time and again that oil companies are not willing to build billion dollar refineries - YET their profits are up 30% to 40% over the last two years? What's up with that? Are they waiting for the taxpayers to build them?
Good point. I remember that well.License plates ending in an odd number or letter could fill up one day, and the next would be even numbers. I was 17 back then & had 2 license plates....an odd & even. It's something that I've always been rather ashamed of.
If there are refineries that have capacity and no oil to process, then this is a good move. Gas prices have gone up $.50 in the past two days here. The reason is that supplies are tight and only getting tighter. The only way to curb consumption and avoid running out is to jack prices up. I would suggest we can all do something to help by curtailing our driving as much as possible.
My guess is that with so many off shore platforms out of production it will be used by operating refineries to make up for the drop of production from the Gulf.
When it comes right down to it, this is a matter of national security.
4 day work weeks would help alot if your company will allow it.4,10 hour days instead of 5,8 hour days.
you are correct. The oil companies apply for crude from the SPR, and then they have to pay it back by a certain time.
Boy do I remember the 1979 gasoline shortage! Long lines, high prices, short tempers, and Jimmy Carter as our Tnediserp. But it had its silver lining: I told my girlfriend that trips to the beach, restaurants, or anything requiring the use of motor fuel had to be ruled out for the sake of conservation.
There was nothing left to do but vastly increase the amount of time spent in the bedroom. Don't start the car, start the ol' whoopee machine!
Unfortunately, the problem (high gas prices) is now WAY BEYOND what can be remedied through ANWAR.
These price levels are here to stay, and will KEEP GOING UP as long as the CURRENT DEMAND level is CONTINUING. Everyone has got to get this into their heads.
Worldwide consumption of oil is way UP, with no forseeable decrease outside of worlwide recession.
The high gas prices are not due to any 'SHORTAGES'. Why is that? - - Because you don't see long gas lines at the pump.
OPEC is producing to meet DEMAND and will continue to do so, but because of this HIGH DEMAND, the markets will continue to BID UP the price.
Look - freeing up IRAQI OIL has done not only absoluting NOTHING to alleviate price levels, but we are seeing the highest prices of all time.
The only way to STOP or reverse this situation is to develop an alternative fuel to oil - not 'find more oil'.
I am not a 'wacko', and don't perscribed to Gore's past crazy schemes. But the time has come, not only for the well-being of our future economy and standard of living, but also for our national security, that alternative fuels need to be developed to counter-act our total dependency on oil.
I do not agree with this call...
The reserves were not intended to be used to ease the cost of gasoline to the public...
Releasing any amount (from the strategic reserves) will not do anything to make that cost go any lower for any of us...
It is rather funny that when the thought originally came to the front page of the news radar late last week...That the story (they are using now), is that the release of a portion of our strategic reserve is to make up for the loss of incoming barrels from domestic drilling operations, which have obviously been hampered by the storm...
Like I have said before, something else is amiss...
I have never seen "inflation" drive a mass-use commodity like oil/gasoline, to be inflated over 200% in a 24 month period...
They key to all of this is that we can no longer "refine" the oil to gasoline products as fast as we are taking in the oil...
We got all the oil we need coming in...Its the refining of that product to what we can use that is driving up the cost...
When you have accidents (natural or mechanical) that reduce that refining potion of the process, thats what hurt the majority of us...
Remember we have not been able to build ANY new refineries in years...Thanks to the eco-freaks, and their successful efforts...
Thanks to them and the weak-kneed government, we ar now paying the price...
Expansion of existing refineries has been minimal, if not just upgrades to those facitities, no increases of refining of the oil, means a "cap" on what gets to the pumps around the corner from you...
I expect to see $3.00 per gallon of gas within the next month...
And it will not get any better till we expand the refining capability in this country...
Yeah, getting our oil from ANWR will help us eventually, but getting that supply to us to do any good to reduce the cost of this commodity will take at least a minimum of 5-8 years...
Bottom line...I think we should leave the reserves alone...We can tough this out...
Why doesnt the GOP call it what it is...a CARIBOU TAX. Are Americans willing to pay $1.50 per gallon for Alaskan Caribou to not have their view spolied by pipelines? That's all this is about.
Whatever comrade...
The Strategic Petroleum Reserve (SPR) is an emergency petroleum store maintained by the United States Department of Energy. It is the largest emergency supply in the world with the capacity to hold up to 727 million barrels (116 million m³) of crude oil.
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The reserve is stored at four sites on the Gulf of Mexico, each located near a major center of petrochemical refining and processing. Each site contains a number of artificial caverns created in salt domes below the surface. (Note: Capacity numbers may be out of date.)
Individual caverns within a site can be up to 1000 m below the surface, average dimensions are 60 m wide and 600 m deep, and capacity ranges from 6 to 30 million barrels (1 to 5 million m³). Almost $4 billion was spent on the facilities. The decision to store in caverns was taken to reduce costs; the Dept. of Energy claims it is roughly 10 times cheaper to store oil below surface with the added advantages of no leaks and a constant natural churn of the oil due to a temperature gradient in the caverns. The caverns were created by drilling down and then dissolving the salt with water.
A fifth site, Weeks Island in Iberia Parish, Louisiana, had a capacity of 72 million barrels (11,000,000 m²), but was decommissioned in 1999. Unlike the other facilities, the Weeks Island caverns were a conventional near-surface salt mine, formerly owned by Morton Salt. In 1993, a sinkhole formed on the site, allowing fresh water to intrude into the caverns.
Because of the caverns' construction in salt deposits, fresh water would erode the walls, potentially causing the structure to fail. The caverns were backfilled with salt-saturated brine. This process which allowed for recovery of 98% of the petroleum stored in the facility, reduced the risk of further freshwater intrusion, and helped prevent the remaining oil from leaking into the aquifer that is located over the salt dome.
Access to the reserve is determined by the conditions written into the 1975 Energy Policy and Conservation Act (EPCA), primarily to counter a severe supply interruption. The maximum removal rate, by physical constraints, is 4.3 million barrels per day (8 m³/s). Oil could begin entering the marketplace 13 days after a Presidential order. The Dept. of Energy says that it has about 7 to 8 weeks worth of inventory protection in the SPR. This, combined with private sector inventory protection, is estimated to total 150 days worth of emergency supply.
The SPR was created following the 1973 energy crisis. The EPCA of December 22, 1975, made it policy for the U.S. to establish a billion barrel (159 million m³) reserve. A number of existing storage sites were acquired in 1977. Construction of the first surface facilities began in June 1977. On July 21, 1977, the first oil—approximately 412,000 barrels (66,000 m³) of Saudi Arabian light crude—was delivered to the SPR. Fill was suspended in FY 1995 to devote budget resources to refurbishing the SPR equipment and extending the life of the complex. The current SPR sites are expected to be usable until around 2025. Fill was resumed in 1999.
Oil has been removed under emergency conditions only once, in 1991. However, oil has been temporarily loaned out or exchanged to private oil companies in a few circumstances. These include an ARCO pipeline disruption in April 1996; an exchange of 11 million barrels (1,800,000 m³) of Maya crude oil for 8.5 million barrels (1,400,000 m³) of higher value crude oil in 1998; a dry dock collapse in June 2000 just north of the Intracoastal Waterway near Lake Charles, Louisiana used by CITGO and Conoco refineries; and temporary loans in response to supply disruptions following Hurricane Lili in 2002 and several strong storms during the 2004 Atlantic hurricane season.
On November 13, 2001, President George W. Bush announced that the SPR would be filled, saying, "The Strategic Petroleum Reserve is an important element of our Nation's energy security. To maximize long-term protection against oil supply disruptions, I am directing...the Secretary of Energy to fill the SPR up to its 700 million barrel [111,000,000 m³] capacity." The highest prior level was reached in 1994 with 592 million barrels (94 million m³). At the time of President Bush's directive, the SPR contained about 545 million barrels (87 million m³). By redirecting a certain amount of imported crude oil to the reserve, some think this effectively raised oil prices by 28 cents per gallon (7c/L). Since the directive in 2001, the capacity of the SPR increased by 27 million barrels (4.3 million m³) due to natural corrosion of the salt caverns in which the reserves are stored.
On August 17, 2005, the SPR reached its goal of 700 million barrels (111,000,000 m³), or about 96% of its now-increased 727 million barrel capacity. Approximately 60% of the crude oil in the reserve is the less desirable sour (high sulfur content) variety. The oil delivered to the reserve is "royalty-in-kind" oil—royalties owed to the U.S. government by operators who acquire leases on the federally-owned Outer Continental Shelf in the Gulf of Mexico. These royalties were previously collected as cash, but in 1998 the government began testing the effectiveness of collecting royalties "in kind" - or in other words, acquiring the crude oil itself. This mechanism was adopted when refilling the SPR began, and once refilling is completed, future royalties will be paid into the Federal treasury.
Plans are moving forward to build a new refinery in Yuma AZ
Right on, Kitty. But, if the totalitarian Stalinist regime could build tank and aircraft factories beyond the Urals almost overnight, our free market industry can build new refineries at breakneck speed. We are in a grave emergency, vis-a-vis fuel, and the administration can and should implement this immediately, liberals and their blasted agenda be damned.
Impossible to get a permit and if that happened the legal liability if there is an accident (and they do happen) outweights any potential reward.
No, it is not. It is for any shortage.
We have an issue with refining capability, the US hasn't built a refinery in 25 years, so it is an issue. I believe drilling our own oil, in our own country would bring the price down for us. It certainly won't help in the short term, but for long term it needs to be done. On the other hand, OPEC says there is no logical reason for oil to be this high, they are meeting demand, they have sources to meet demand and it's just panic making the price $70 a barrel.
Folks, this is NOT TRUE. Whoever is peddling this rationale is spinning tales.
There is NO "SHORTAGE" of anything. If there was, you would not be able to just 'drive up' to a pump and get your tank filled. You would actually be seeing LINES of cars outside of gas stations, like I saw back in 1973.
You need to understand that what's driving the price levels is not "shortage" but "HIGH DEMAND" which is being met by OPEC's capacity to produce to that demand, and the future's markets realizing the strength of that demand by bidding prices up.
The gas retailers (your local station), seeing no let up, are actually playing the 'demand' game by raising their prices in huge jumps because they know that their inventories will move quickly due to this current, and continuing expected future demand.
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