The Energy Department is loaning Marathon Petroleum Co., a refining company, one million barrels of crude oil from the nation’s Strategic Petroleum Reserve after Hurricane Isaac forced the suspension of Gulf of Mexico oil production.
“Today’s announcement is part of the broader federal effort to respond to those impacted by Hurricane Isaac,” Energy Secretary Steven Chu said in a statement. “This emergency loan from the Strategic Petroleum Reserve will help ensure Marathon’s refining operations have the crude oil they need to continue operating.”
The storm, which was a Category 1 hurricane at its peak, forced the temporary shut-in of most Gulf of Mexico oil output, and also disrupted Gulf Coast ports and terminals.
The Energy Department emphasized that the loan of sweet crude oil does not constitute a release of oil from the SPR, but noted that remains an option.
“The administration continues to keep all options on the table to address additional or sustained supply issues,” DOE said, echoing comments by White House spokesman Jay Carney in recent days.
The last release of oil from the SPR occurred in June of 2011. President Obama announced the release of 30 million barrels at a time when the conflict in Libya had removed supplies from the market, part of a larger coordinated release with other International Energy Agency member nations.
The oil provided to Marathon Petroleum marks the ninth time DOE has used its loan authority. The last time was in response to 2008’s Hurricane Gustav.
Under the agreement, Marathon must return an equal amount of oil of similar quality within three months, and provide “premium barrels” that amount to a form of interest, DOE noted.
