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Oil Prices Subdued, But For How Long?

Oil Prices Subdued, But For How Long?

Oil prices may have closed…

U.S. Oil Production May Jump To 14 Million Bpd By 2020

U.S. Oil Production May Jump To 14 Million Bpd By 2020

Secretary of the Interior Ryan…

U.S. Announces First Superstorm-Related Oil Reserve

The U.S. Department of Energy announced on May 2 that it plans to build an oil storage facility in the northeast to prepare for future emergencies. The storage reserve will hold approximately 1 million barrels of gasoline, and DOE estimates it will cost $215 million to build.

The decision to build gasoline storage infrastructure is part of the government’s response to the widespread damage caused by 2012’s Hurricane Sandy. In the super storm’s aftermath, people in New Jersey and New York suffered through periods of blackouts and gasoline shortages. Some gas stations had no supplies for 30 days and others experienced long lines.

The new reserve, to be built in the New York Harbor area, will be tapped if another disaster disrupts regular supplies. The Obama administration said they see it as the first of several oil reserves that will be constructed around the country in order to plan for future extreme weather events, believed to caused by climate change.

Related Article: Gulf Coast Oil Stockpiles Hit Record Levels

“In addition to our mitigation and international efforts, the president’s Climate Action Plan calls on us to take measures today in order to better prepare for the effects of climate change we already see occurring here at home,” Secretary of Energy Ernest Moniz said in a statement.

DOE’s action was prompted in part by pressure from New York’s U.S. senator, Chuck Schumer (D), who urged DOE to find ways to avoid another scenario in which an extreme weather event causes fuel outages.

The U.S. has managed a national strategic petroleum reserve (SPR) since the late 1970s, after the 1973 oil embargo by Arab countries. The SPR holds around 700 million barrels of oil in salt caverns in Texas and Louisiana. Fuel from the SPR has been deployed only three times by presidents in the past – during the 1991 Persian Gulf War, during Hurricane Katrina in 2005 and during the Arab Spring in 2011.

By James Burgess of OIlprice.com


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