Perry taps emergency oil reserves to combat postHarvey shortages
WASHINGTON — Energy Secretary Rick Perry has tapped the nation’s emergency oil stockpile in response to fuel shortages caused by Hurricane Harvey.
The Energy Department announced on Thursday the decision to draw down half a million barrels of crude oil from a strategic petroleum reserve site in Louisiana as part of an “emergency exchange” with Phillips 66 at the company’s refinery in Lake Charles, La.
“The department will continue to provide assistance as deemed necessary, and will continue to review incoming requests for SPR crude oil,” Energy Department spokeswoman Jess Szymanski said in a written statement, using an acronym for strategic petroleum reserve.
The release, first reported by the Houston Chronicle, comes amid an expanding fuel crunch in Harvey’s wake.
About 40 percent of the refining capacity along the Gulf Coast — or about a fifth of the nation’s entire capability — has been knocked out by flooding and other damage. The storm has also made it difficult, in some cases, for crude oil to arrive on shore.
And another blow came Thursday when Colonial Pipeline announced plans to shut down a key line that supplies nearly 40 percent of the South’s gasoline. The move is due to storm-related refinery shutdowns and Harvey’s effect on the company’s facilities west of Lake Charles, La.
Perry, the former Texas governor, told The Dallas Morning News on Wednesday that gasoline prices were sure to spike.
“They’re going to go up,” said Perry, who is traveling to Texas on Thursday with Vice President Mike Pence. “Crude prices are going to go down because they can’t deliver and they can’t refine them. And gasoline prices are going to go up. We understand economically what’s going on here.”
The tapping of the reserve represents a small fraction of the nearly 700 million barrels that sit in four sites split between Texas and Louisiana. And this kind of exchange is more common than the full-on emergency sale that was seen after Hurricane Katrina and other calamities.
But Perry’s decision to use the stockpile nonetheless stands out, given that he and President Donald Trump have proposed reducing the reserve by half.