Energy Dept. taps into emergency oil reserves after Harvey
The Department of Energy is releasing oil from its Strategic Petroleum Reserve (SPR) in an attempt to mitigate disruptions from Hurricane Harvey.
Energy Secretary Rick Perry authorized a release of 500,000 barrels of crude oil, to be transported via pipeline to Phillips 66’s refinery in Lake Charles, La., agency spokeswoman Jess Szymanski said Thursday morning.
“The department will continue to provide assistance as deemed necessary, and will continue to review incoming requests for SPR crude oil,” Szymanski said.
The release of 200,000 barrels of sweet crude and 300,000 of sour crude is the first emergency release from the SPR since Hurricane Isaac hit Louisiana in 2012.
The Energy Department is setting up the release as an oil exchange, so Phillips 66 must contribute back to the petroleum reserve with more oil than it received.
The Lake Charles refinery has not itself been hit by Harvey. But numerous other refineries have been shut down or damaged in Texas and Louisiana, contributing to fears that fuel prices will skyrocket.
The Gulf Coast hosts about half of the fuel-refining capacity in the United States, and about 40 percent of the area’s capacity was offline as of Wednesday morning.
Sen. Ed Markey (D-Mass.) had asked the Energy Department Wednesday to tap into the SPR.
The stockpile was established in the 1970s, in coordination with similar reserves around the world, to protect the United States from major energy-supply emergencies.
President Trump’s budget proposal earlier this year calls for the Energy Department to sell off half of the petroleum reserve.