WASHINGTON, DC– The Department of Energy announced today that it intends to enter into negotiations to make available a limited quantity of crude oil from the Strategic Petroleum Reserve (SPR), to help relieve physical shortages of crude oil supplies in the Gulf of Mexico following recent hurricanes.
The negotiations are for crude oil to be loaned under short-term contractual agreements from the SPR, and to be returned to the Reserve once supply conditions return to normal. Similar to the October, 2002 response to Hurricane Lili, these negotiations are being conducted following specific requests from refineries that have been affected by recent hurricanes.
"I have authorized these negotiations in response to the physical disruption of offshore oil production and imports in the Gulf Region caused by Hurricane Ivan's destruction," Secretary Abraham said. “As this Administration has stated consistently, the SPR was designed to protect American consumers against supply disruptions, including natural disasters,” Secretary Abraham said.
When Hurricane Lili disrupted normal commercial oil shipments into Gulf Coast distribution hubs in October 2002, a similar loan of oil from the SPR was carried out.
At that time the SPR temporarily loaned nearly 300,000 barrels to refineries that relied on the Gulf for supply. When commercial oil deliveries returned to normal, the crude was returned to the SPR.
DOE’s Energy Information Administration (EIA) statistics as of September 17, 2004 show a crude inventory drawdown of approximately 11 million barrels in the Gulf region over the past three weeks.
Results of the negotiations will be announced in the near future.
Note: Additional information concerning the Strategic Petroleum Reserve can be found at: http://fossil.energy.gov/programs/reserves/index.html.
Media contacts:
Jeanne Lopatto, 202/586-4940
Drew Malcomb, 202/586-5806
