It never ceases to amaze me how the price of gasoline at the pump jumps up by 5 to 10 cents before there is any actual shortage but it takes a week or so for the prices to slowly move back down after the crises (real or imagined) has passed.
And, by the way, Im not blaming the gas station owners. These independent businessmen are told what to charge by the suppliers. The BIG OIL companies run the show and we pay through the nose then Congress continues to give the oil companies all kinds of incentives and tax breaks. So we pay through the nose again with our taxes being given away to multi-billion dollar companies making outrageous profits.
Re: Closing refineries on the Gulf because of the storm. That was one of the arguments against piping the tar-sands goop all the way to Texas for processing. If it was processed on our side of the Canadian border then distributed within the U.S. wed be talking thousands of new jobs in a part of our country where there arent many jobs to begin with, and less likelihood of the gasoline and other products being shipped out of our country to places like China and India. But, Noooo! The politicians we hired to work for us have again helped the BIG OIL interests.
Hurricane Isaac has forced oil and gas operators to shut in more than 93 percent of production in the Gulf of Mexico and energy companies to close at least five refineries, developments that are fueling speculation the White House will release oil from the Strategic Petroleum Reserve.
Isaac made landfall in southeastern Louisiana late Tuesday as a Category 1 storm with maximum sustained winds of 80 miles per hour.
Press secretary Jay Carney told reporters earlier Tuesday that releasing oil from the SPR, which currently holds about 696 million barrels, is an option that remains on the table, according to a transcript of the gathering provided by the White House. Carney did not provide further detail.
Debate over whether the Obama Administration will release oil from the SPR has escalated as gasoline prices have risen and oil production in the Gulf has shut down due to the storm. Tight oil supplies have been compounded by an explosion at Venezuela’s largest refinery.
Some energy analysts have predicted the government will announce a release from the SPR by next week, Bloomberg reported. More than a few, including an editorial by Bloomberg, have speculated the oil release would be more of an election tactic, not because it’s a true emergency.
The Obama Administration has drawn down the reserve once before. During July and August 2011, about 30.64 million barrels were sold in response to sustained interruptions in global supplies due to civil unrest in Libya. President Obama authorized the sale as part of a larger coordinated release by the International Energy Agency countries.
The effect was minimal for consumers buying gasoline. The price at the pump declined about 2 percent. Prices rose again a week later.
Until now, operators have shut in production as a precautionary measure. Views over releasing oil from the SPR could change if oil and gas infrastructure sustains significant damage from the storm.
The infrastructure hasn’t fared well in other weather events. Katrina, the Category 3 hurricane that made landfall seven years ago, killed 1,800 people, caused billions of dollars in damage and devastated oil and gas installations taking out 4.5 million barrels a day of refining capacity.
Photo: NASA
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