Emergency oil reserve increase is expectedgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Emergency oil reserve increase is expected
By H. Josef Hebert Associated Press
Web Posted : 10/30/2001 12:00 AM
WASHINGTON — President Bush is expected, perhaps within days, to direct that an additional 70 million barrels of oil be put into the government's emergency reserve over the next several years, according to administration and private sources.
The additional oil would be acquired at a rate of about 100,000 barrels a day and for the first time would bring the government's Strategic Petroleum Reserve to its full capacity, said the sources, who spoke on condition of anonymity.
Private economists viewed the move as additional insurance against future supply disruptions. At the same time, they said, it will help to contain the recent downward spiral in world oil prices by taking 100,000 barrels a day off the market.
While some details remained to be worked out, an Energy Department proposal sent to the White House was said to await final approval from the president. An executive order could allow purchases immediately.
The strategic reserve, a string of salt caverns along the Gulf Coast in Texas and Louisiana, currently has 543 million barrels of oil, with a capacity to hold 700 million barrels.
Another 48 million barrels is expected to be put into the reserve by the end of next year under existing royalty-in-kind contracts and from oil returned to the reserve as part of an oil "swap" arrangement last year.
-- Martin Thompson (email@example.com), October 29, 2001