OT ?? Background on SPR

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

From the Houston Chronicle back in June-99

"The government is collecting the oil for the reserve in three rounds, each drawing a larger amount of crude. In the first round, which began in February, it took in 3 .9 million barrels from four major oil companies; in the second, the companies will put up 9.4 million barrels.

The third round will open in the fall with a goal of attracting 14 million barrels. The Department of Energy plans to have all of that crude in the reserve by March 2000. Oil can be withdrawn from the preserve at 4.1 million barrels per day. So the 28 million barrels added represents seven days' worth of supply.

The quality of the crude oil the companies are offering varies widely. Since the reserve wants to add only lighter grades of crude, it is trading the heavier grades for higher oil.

Ultimately, the government is only injecting light, sweet or light, sour crude into the reserve .

The reserve as a whole can hold up to 700 million barrels of oil, but currently holds roughly 565 million barrels. A Department of Energy spokesman was reluctant to say if the government will go beyond that level of purchases.

"We're completing a study on what the ultimate size of the Strategic Petroleum Reserve should be," said the Energy Department spokesman. "We will make further decisions about the fill pending completion of the study this fall."

Filling the reserve had been on the Energy Department's agenda for "quite a while," Shages said."

Loooong link:

http://www.chron.com/content/archive/search.hts?operation=getdoc&database=2000;1999;1998;1997;1996;1995;1994;1993;1992;1991;1990;1989;1988;1987;1986;1985;&databases=2000;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;1999;&docid=74508&docids=3765;64493;63923;63758;60519;51926;49208;49094;48740;33029;31589;21948;18688;17185;14178;11745;9206;8447;8233;7309;7070;6125;5872;4518;1655;&query=strategic+petroleum+reserve+NOT+3:RSEC&pos=9&numhits=25&start=&type=&user=houston&sview=1&hview=2&dview=1

-- John Galt (still@doom.er), January 27, 2000

Answers

"Filling the reserve had been on the Energy Department's agenda for "quite a while," Shages said."

Good for them. That's only prudent.

And, while we may threaten to use the SPR to drive prices lower, this tneds to illustrate that it has been filled with reason in mind.

-- rocky (rknolls@no.spam), January 27, 2000.


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