U.S. Energy Secretary Jennifer Granholm on Thursday authorized the nation’s emergency oil reserve to loan 1.5 million barrels of crude to an Exxon Mobil refinery in Louisiana to ease fuel disruptions in the aftermath Hurricane Ida.
Previously, President Joe Biden ordered Granholm to use all tools, including the Strategic Petroleum Reserve (SPR), to keep gasoline flowing after the storm.
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“It is important to know that the affected region (Ida) is a key center of our country’s oil production and refining infrastructure… that’s why we are not waiting to assess the full impact of the storm” , Biden said.
The Baton Rouge refinery loan aims to “alleviate any logistical problems associated with transporting crude oil to areas affected by Hurricane Ida to ensure that the region has access to fuel as quickly as possible,” said the Minister. Department of Energy.
Several refineries, including Baton Rouge, remained cut off from supplies of crude and southern products by boat and barge after portions of the Mississippi River were closed by several sunken ships.
The Energy Ministry said it was encouraging refiners to prioritize products refined for the affected region.
GAS PRICES STABLE AS IDA CLOSES TO CAP COD
SPR has four major storage facilities, two in Texas and two in Louisiana, to deliver crude to neighboring refineries for fuel production. It was developed in the 1970s after the Arab oil embargo pushed up gasoline prices, but has been in operation recently after unusual fuel disruptions like hurricanes.
Ida passed through several parts of the United States, devastating parts of Louisiana. The rains on Wednesday caused massive flooding in the northeastern United States.
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About 1.5 million barrels of daily offshore crude production is currently stranded, federal data showed Wednesday. US energy companies, spread along the Gulf Coast, were struggling to get their operations back on track amid persistent loss of power and other issues related to storm damage.
IDA RESULTS: INFLATED RIVERS THREAT OF FURTHER FLOODING IN PARTS OF THE NORTHEAST AS STORMS KILL DOZENS
Biden noted that the Environmental Protection Agency had approved emergency fuel waivers for Louisiana and Mississippi to increase gasoline availability. The EPA issued the waivers this week, allowing the sale of winter-grade fuel out of season to avoid shortages.
The SPR had 621.3 million barrels of crude in storage last week, according to the Energy Department, the lowest since August 2003, data showed.
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The oil will have to be repaid later to the SPR with interest.
(Reporting by Steve Holland and Nandita Bose and Timothy Gardner in Washington; additional reporting by Stephanie Kelly; Editing by David Gregorio)