Senate Democrat asks feds to tap emergency oil reserve

Senate Democrat asks feds to tap emergency oil reserve
© Victoria Sarno Jordan

A Democratic senator is asking federal officials to tap into emergency reserves of petroleum as a way to alleviate potential gas price spikes after Hurricane Harvey.

In a letter to President Trump on Wednesday, Sen. Edward MarkeyEdward (Ed) John MarkeySenate Democrats introduce bill to block Trump's refugee ban FCC votes to limit program funding internet access for low-income communities Two GOP senators oppose Trump’s EPA chemical safety nominee MORE (D-Mass.) said the Energy Department should release oil from the Strategic Petroleum Reserve (SPR) “to help consumers and mitigate upward pressure on refined product markets.”

“An immediate release of gasoline or crude oil, if also warranted, from the SPR would help protect consumers from price spikes at the pump and tame any market speculation that could be unduly affecting markets and harming consumers,” Markey wrote.

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The SPR serves as a backup supply of oil reserved for national energy emergencies. It contains about 678.9 million barrels of crude oil. The last time the government sold off oil from the reserve in response to a national emergency was in 2005 after Hurricane Katrina.

Harvey has knocked out oil production and refining operations in the western Gulf of Mexico since last week. As of Wednesday morning, about 18.5 percent of the Gulf’s oil production is shut-in, and 13 refineries, accounting for 20.9 percent of U.S. refining capacity, are closed.

The decline in refining capacity is considered a larger factor in driving up gasoline prices than a diminished crude oil supply. Several large Gulf Coast refineries, including the country’s largest, are offline, though some companies are in the process of restarting their facilities.

Auto group AAA reports that gas prices have increased 6 cents per gallon since last week, and industry watchers expect them to creep even further.

The oil industry asked the Energy Department to tap the SPR earlier this week but officials rejected the request, E&E News reported Monday.

—Updated at 4:57 p.m.