White House to release oil from reserves

[sabra]

http://www.newsobserver.com/24hour/business/story/2675187p-11202048c.html

White House to release oil from reserves

WASHINGTON (AP) - Energy Secretary Samuel W. Bodman said Wednesday the Bush administration has decided to release oil from federal petroleum reserves to help refiners affected by Hurricane Katrina.
The move, which was expected later in the day, 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.

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 dipped quickly 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.

[calico1]

1. Correction...

"Energy Secretary Samuel W. Bodman said Wednesday the Bush administration has decided to release oil from federal petroleum reserves to help refiners affected by Hurricane Katrina."


Its to help sagging poll numbers.

[Bob3]

2. and where are they going to refine this stuff

Huh?
Jesus what a putz.
Time to get whatever runs and floats down there.

[etherealtruth]

3. No where!

There is not adequate refining capacity:
http://www.washingtonpost.com/wp-dyn/content/article/2005/06/15/AR2005061502252.html

[LynzM]

6. Exactly

Well and good to give them the oil, but what are they going to do with it??

[hatrack]

10. Thank you!

And with about, oh, 10-15% of the nation's refining capacity out because of the hurricane, just where the HELL are they going to work the stuff?

Pathetic photo-op eyewash.

[MercutioATC]

4. BAD idea.

The strategic reserve isn't meant to be used to artificially lower oil prices.

What we're seeing is an issue of supply and demand. The situation will never correct itself if we do things like this.

[Terry in Austin]

19. The good part

The oil reserve is strategic -- i.e., military. If they draw it down just to maintain business as usual, there'll be that much less for antisocial uses, such as fueling armored cars to maintain control in restless American neighborhoods (ok, not yet, but soon enough!)

[MercutioATC]

23. Always looking on the bright side, aren't you?

Best funny observation I've seen yet.

:hi:

[Roland99]

5. NPR reported that Port Fouchon to be reopened today.

That should alleviate some fear.

[Earth_First]

7. Aren't there more pressing matters involved along the Louisiana Gulf Coast

...figures that oil takes precedence over a humanitarian crisis.

[RPM_BU]

9. Well it does take fuel

to run the generators, trucks, boats, power plants, and the like that will be required in the evacuation and cleanup process.

[Atman]

8. Purely self-serving. 100%.

He thinks (or KKKarl does) that this will boost his poll numbers. It won't. But also, remember, Bush is an oilman, as is his boss, Cheney. Sell high, buy higher. They'll drain the reserves, then proceed to top it off with today's newer, MUCH higher priced petroleum (read: your tax dollars) which will go directly to the already over-bloated profits of his oil exec friends.

What a sweet deal for BushCo, which will actually help nobody. Generosity is wonderful when it doesn't cost you anything.

[Ready4Change]

11. Bushs first official Katrina action: Save the Money! n/t

[Walt Starr]

12. WOW, using disaster to line his cronies pockets!

Since there is no place to refine the reserves, it does no good to release them, at least for the general populace.

what it does is allow Bush's oily cronies to have access to cheap crude that they don't even have to pay to store, you and I are picking up the storage tab on this one.

:mad:

[WildClarySage]

13. So they'll have to buy oil at $70 a barrel or more to replace the

reserves that were originally purchased for $40-ish? Great. Always good to see my tax dollars are working hard for Bush. :eyes:

[geckosfeet]

14. Excellent timing GW, $70 a barrel - cost basis was only $50 a barrel!

Thanks GW! We got to get you re-elected in '08. How can we fix that constitution thing everyone keeps yapping about?

[Spike from MN]

15. Hmmm....things aren't always what they seem.

From the link the OP provided:

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."

"Plus some interest?" OK, so that means they take out xxx barrels and add back in xxxxxxx barrels. So, by tapping the reserve, they plan to increase the reserve later on? Figures. And who do you suppose will foot the bill for that?

[Weembo]

16. It is a good move

The market was reacting hysterically. Before the storm, the problem was not too little oil, but too little refining capacity. The storm caused damage, but most of the refining capacity was intact. What the storm did disrupt (temporarily) was the supply from the Gulf of Mexico. When the market assessed this yesterday, along with the horrific scenes from New Orleans, it gave a knee-jerk reaction not really based on facts and shot the price of oil skyward. So, although I am the furthest thing from a fan of Bodman or stretch-pants, this is the best thing to do to settle down the market in the short term. If indeed prices need to rise, they will over the longer term -- the SOR was never designed to, and practically cannot, have a significant, long-term impact on oil prices.

In addition, my understanding is that the oil will not be sold, but loaned. I don't know what effect that has, but the government won't make money on it except for the "interest." Now, is it beyond comprehension that the companies "borrowing" the oil might get to buy the replacement oil for a lesser price and thereby make some cash? :)

[DoYouEverWonder]

17. Notice the wording

they are releasing the oil to help the 'refiners'. They are not doing this to help the people.

[Endangered Specie]

22. Wow, that is telling

:crazy:

[Whoa_Nelly]

18. Government site re:: previous releases-Important Historical Content

Historical releases:
http://www.fe.doe.gov/programs/reserves/spr/spr-drawdown.html

Main Gov't. site
http://www.fe.doe.gov/programs/reserves/

An interesting Dec. 2004 NYT article re: reserves, gas prices and US vulnerability:
(Had to get it from the google cache file)
http://64.233.161.104/search?q=cache:OC5oKyMSzvgJ:cryptome.org/spr/spr-eyeball.htm+oil+reserves+spr&hl=en&ie=UTF-8

And one more article--Cato Institute re: Reserves and Politics:
http://www.cato.org/dailys/04-08-04.html

All of the above is very interesting reading. I didn't post excerpts because I know that if you're interested, you'll go to the sites. When I see a post that has too much info in it, I tend to scroll past.

However, I do think it's important to understand the pros/cons of tapping into the reserves and know more about the history, as well as the vulnerable position into which this places our nation, and us, as average citizens.

[sarcasmo]

20. When will we hear that all of this oil mess is Clinton's fault.

[Spider Jerusalem]

21. This will do some good...for about a week or so.

700 million barrels = nine days' supply.

[OKNancy]

24. kick

[Beaverhausen]

Bush Releases Oil Reserves

http://www.cnn.com/2005/POLITICS/08/31/bush.oilreserve.ap/index.html

WASHINGTON (AP) -- The Bush administration will release oil from federal petroleum reserve 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.

[napi21]

25. Yea, but where are they going to refine it?

I understand it's the refineries that have been shut down. Raw crude doesn't do much for ya if you can't make it into gas, huh?

[LiberalEsto]

27. New Jersey, where else? n/t

[ugarte]

26. "...right into the water..."

nt

[Neocondriac]

28. Better known as ....

...me and Daddy's private kitty.

[MGKrebs]

29. Strategic reserve

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.)

* Bryan Mound - located near Freeport, Texas. Has a capacity of 226 million barrels (36,000,000 m²).
* Big Hill - located near Winnie, Texas. Has a capacity of 160 million barrels (25,000,000 m²).
* West Hackberry - located near Lake Charles, Louisiana. Has a capacity of 219 million barrels (35,000,000 m²).
* Bayou Choctaw - located near Baton Rouge, Louisiana. Has a capacity of 72 million barrels (11,000,000 m²).

http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve

So presumably it's all going to have to come from Texas. Do they have the additional capacity to make a difference?

[napi21]

30. I doubt it! At least they've been saying every refinery has been

working at max capacity already. Now, I guess we'll see. If they produce this extra now, we'll know they were lying before!!!

[LincolnMcGrath]

31. Another Bush Flip Flop

It was also nice to see API President/CEO Red Cavaney flip flopping on the benefit of releasing oil now that Bill Clinton is no longer in office. Not only that, tonight on Newshour (pbs) he was blaming mom and pop gas stations for the increased prices, saying 'big oil' had little to do with it. :mad: Thank Goodness the interviewer on 'the uber liberal pbs' called him on his past comments (flip flops) and lies about gas prices! .......Oh wait, he didn't!! :mad: