http://biz.yahoo.com/rf/991130/m2.html

-- Linkmeister (link@librarian.edu), November 30, 1999

Answers

[Fair Use: For Educational/Research Purposes Only]

Tuesday November 30, 9:42 am Eastern Time

IEA plans for emergency oil sales if Y2K crisis

By Andrew Mitchell

LONDON, Nov 30 (Reuters) - The International Energy Agency (IEA) has drawn up plans to provide emergency oil supply and introduce rationing if the Y2K computer bug plays havoc with global energy flows, a spokesman for the West's supply watchdog said on Tuesday.

The plan, to go for approval before the Paris-based group's board of governors on December 10, would kick in if computer failures feared at the dawn of the new century slash seven percent or more from industrialised countries' oil supply.

``In the documents setting up the IEA the director is given right to apply crisis mechanisms when there is turmoil in the oil markets,'' said IEA spokesman Scott Sullivan.

``These would have to involve activating our systems in ways such as allocating oil reserves and restraining demand, for example with brief oil rationing.''

Y2K would have to cause massive problems to trigger the crisis plan -- industrialised OECD countries consume around 45 million barrels per day (bpd) of oil, so around three million bpd would have to be cut to reach the seven percent watershed.

Sullivan declined to say how much oil the IEA plan would allow for release and added that the likelihood of supply chaos as a result of Y2K was low.

``We plan a response if there are major problems but we do not foresee that happening,'' he said. ``The most likely outcome is a few small problems here and there.''

This echoed a Monday declaration by OPEC powers Saudi Arabia and Venezuela as well as non-OPEC Mexico that Y2K was unlikely to affect world oil supply and that they would respond jointly to any possible glitch.

``If any problem associated with Y2K does occur in the coming months, which is highly improbable, Saudi Arabia, Mexico and Venezuela, in coordination with other oil producing countries, would respond in the appropriate way,'' they said.

IEA members have to hold strategic stocks worth around 90 days of their combined import requirements of around 27 million barrels per day, giving them some 2.4 billion barrels in reserve.

TIGHT OIL MARKETS RAISE Y2K STAKES

Yet oil stocks in industrialised countries have been depleted by deep supply curbs from leading producers that fired world benchmark Brent crude to nine year highs above $25 a barrel just last week.

Major suppliers to the huge U.S oil market such as Nigeria are considered particularly likely to suffer Y2K disruption. Another big U.S supplier, Iraq, has decided to wait and address any Y2K breakdowns after the event.

Tankers and terminals are seen as most vulnerable to Y2K problems and many oil companies have suspended oil loadings around the turn of the year.

Consumers' winter supply nerves have deepened as Iraq suspended its 2.4 million bpd of exports until at least early December in a spat over its oil-for-food deal with the United Nations.

The IEA released oil during the Gulf crisis nine years ago when it added around 15 million barrels to world flows as crude prices briefly spiked above $40 a barrel.

The new IEA plan was designed solely against Y2K and would not be affected by stoppages to Iraqi supply, Sullivan said.

Last week the U.S. government said it was prepared to sell crude oil from its enormous Strategic Petroleum Reserve if Y2K problems disrupted supply.

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-- Linkmeister (link@librarian.edu), November 30, 1999.

``These would have to involve activating our systems in ways such as allocating oil reserves and restraining demand, for example with brief oil rationing.''

See, the planned rationing will only be brief. Nothing to worry about. Oil is y2k ok!

-- Me (me@me.me), November 30, 1999.

Me Don't get your shorts in a bunch. It's just contengency planning. SHEESH!

-- Screamin' Demon (prepper@abouta4.com), November 30, 1999.

Remember, if there are oil problems, it won't be due to "voluntary restrictions" - at least not at first.

It will be because the shipping/refining/distribution systems will have failed at some point(s) - most likely due to multiple causes at multiple points in many areas - and SO THEY CAN'T DELIVER

...regardless of these promises to interfere with internal oil deliveries inside of countries that ARE compliant - any conspiracy "experts" want to spell "international control of oil" again (at last ? maybe in some people's minds) the oil, if it has troubles, will stop. And these ministers can't restore it until the problems are fixed.....

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), November 30, 1999.

Higher prices are a form of rationing. (Maintains the profit margins).

Diane

See..

Northern/Southern California, Oil Refineries, Explosions & Vulnerabilities: At The Stage Where Oil Becomes Gasoline, Competition Dries Up (Oakland Tribune)

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id= 001sIW

-- Diane J. Squire (sacredspaces@yahoo.com), November 30, 1999.

Hmmmm....Interesting.

Didn't I read somewhere Iraq planned to cut back their production/exports by about 3 million barrels? Gecko, you out there? Little help, please.

-- Hillbilly (Hillbilly@possum.creek), November 30, 1999.

Since this (IEA) is an international organization, I could see scenarios where, although the USA might be in reasonable shape (5-10% cutback, handled through higher prices), other countries could really be hurting. The IEA could ask (require, mandate, or force?) the USA to make further cutbacks...and impose mandatory rationing.

WHO ELECTED THESE PEOPLE? WHO ARE THEY AFFILIATED WITH? WHO CONTROLS THEM? I DON'T REMEMBER BEING GIVEN AN OPPORTUNITY TO SELECT THEM!

-- Mad Monk (madmonk@hawaiian.net), November 30, 1999.

The United States is in an extremely vulnerable position if there are any interruptions to our normal quantities of oil imports. This agency says we should have enough stored away for at least 90 days, and we only have enough for 30 days in our reserves, one-third of what they recommend. In addition I have to wonder how much of our reserve supply is going to have to be saved for the military.

-- Hawk (flyin@high.agian), November 30, 1999.