60 days of America 2004 energy consumption... stored in the salt caverns of Louisiana and Utah.
what do you think GOPers... with the election coming up and oil over 48 a barrell... will George approve request for "sweet" crude?
[quote][b]Refineries ask to borrow oil from U.S. stockpile
23 Sep 2004 01:04:50 GMT
(Adds oil prices above $48/barrel, background)
By Tom Doggett
WASHINGTON, Sept 22 (Reuters) - Two U.S. refineries asked the Bush administration if they can borrow crude oil from the nation's emergency oil stockpile amid soaring prices and a supply disruption caused by Hurricane Ivan, a government source told Reuters on Wednesday.
U.S. crude oil futures ended above $48 a barrel in New York trading, surging more than $1.50 on a steep drop in inventories. Hurricane Ivan's path through the Gulf of Mexico last week forced companies to temporarily halt offshore production of about 8.5 million barrels of crude oil.
Bush administration officials are reviewing the requests -- one for 100,000 to 200,000 barrels from the Strategic Petroleum Reserve (SPR) and the other for 1 million to 2 million barrels -- said the source, who asked not to be identified.
The administration could announce as soon as Thursday whether it will approve the requests, the source said.
The refineries, whom the source would not name, are seeking loans of so-called "sweet" crude, because it is easier to process into petroleum products than heavier grades.
An Energy Department spokesman said he did not know if any refineries had made requests to borrow oil.
The U.S. government has made such loans before. When Hurricane Lili disrupted oil shipments into Gulf Coast distribution hubs in October 2002, the government loaned SPR oil to enable a major oil pipeline operator to continue critical crude shipments to refineries in Memphis and the Midwest.
The loan terms require refineries to return the original amount of oil borrowed plus extra barrels as interest.
Such temporary loans could help ease volatile crude oil prices, which are a politically sensitive issue with a presidential election six weeks away.
The Bush administration has repeatedly rejected calls by Democrats and some Republicans to stop filling the emergency stockpile at a time when oil prices are high.
The White House has also said it would not withdraw oil from the reserve except for a severe supply disruption. Last month, Vice President Dick Cheney defined such a disruption as the loss of 5 million to 6 million barrels per day in U.S. imports.
The United States now imports about 11 million barrels per day of crude oil, gasoline and other petroleum products.
However, a temporary loan to oil refiners from the stockpile would technically be considered an "exchange" of oil, not a withdrawal or drawdown, under the Energy Department's program. In such an exchange, the stockpile must ultimately receive more oil than it loaned.
A White House spokeswoman referred questions to the Energy Department. But she added, "Our overall policy (on the SPR) is unchanged."
Congress created the stockpile in the mid-1970s after the Middle Eastern oil embargo rocked the U.S. economy. It currently holds 670 million barrels of crude in underground salt caverns at four sites in Louisiana and Texas.
A record high of $49.40 per barrel for crude oil futures was set on the New York Mercantile Exchange on Aug. 20.
Nope, screw the Caribou. Lets drill in Alaska.