Washington, DC – U.S. Secretary of Energy Samuel W. Bodman today released the following statement regarding President Bush’s historic decision to authorize the drawdown and sale of oil from America’s Strategic Petroleum Reserve.
“We continue to work hard to aggressively address the oil and gasoline supply interruption caused by Hurricane Katrina. Over the past several days we have seen the capacity to ship gasoline by pipeline slowly return, so it is critical that our refineries remain supplied with crude oil.
“Last night, President Bush took the historic step of directing me to draw down and offer for sale petroleum from the Strategic Petroleum Reserve. The initial offer will be for about 30 million barrels of oil. However, the President’s finding does not limit the drawdown and sale to only 30 million barrels, or limit the drawdown to any particular time period. The public sale process will begin on Tuesday (September 6). While we are taking steps in the right direction, Americans should continue to be prudent in their energy usage during the course of the next few weeks.”
This Presidential directive was based on the President’s determination and finding that events in connection with Hurricane Katrina have resulted in a “severe energy supply interruption” within the terms of the Energy Policy and Conservation Act. The drawdown and sale from the Reserve also allows the United States to meet its obligations under the International Energy Agency’s initial collective response to the hurricane.
The fill of the Strategic Petroleum Reserve to 700 million barrels was completed in August, 2005.
In responding to Hurricane Katrina, the Administration has used every tool at its disposal to mitigate any disruption in fuel supply:
The Department of Energy worked quickly to approve requests of loans from the Strategic Petroleum Reserve to oil refineries. Within 48 hours of receiving requests, oil was on its way to requesting refineries. As of September 3, 2005 loans totaling 12.6 million barrels of oil from the Strategic Petroleum Reserve have been approved.
The EPA issued a nationwide waiver that allows use of “winter blend” reformulated gasoline throughout the country in place of the “summer blend” that otherwise would have been required through September 15, and that currently is in much shorter supply. This action allowed use of the considerable stock of reformulated gasoline in storage, and is already helping to increase the supply of fuels to consumers.
EPA is also allowing the use of diesel fuel which exceeds 500 ppm sulfur content, providing additional fuel for generators used by first responders, aid providers, and essential services.
The Department of Homeland Security waived the Jones Act restrictions on the transportation by ship of petroleum, gasoline and other refined petroleum products. This action will allow additional tankers and barges to transport oil and gasoline into ports around the country that may have seen supply disrupted by pipelines running at lower capacity.
The International Energy Agency (IEA) has announced that its member countries will make 60 million barrels of petroleum products available on the market (the President’s authorization to draw down oil from the Strategic Petroleum Reserve fulfills the U.S.’s part of this action)
The Treasury Department and IRS announced that "dyed diesel fuel" normally limited to off-road use would be permitted for road use. This action will bring more diesel supply into the market, enabling transport of essential relief supplies to the affected areas.
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