Repercussions for people outside New Orleans

"Dylan Smith" wrote in message


The Strategic Oil Reserve is crude oil. With 6 major refineries
currently shut down due to Katrina, releasing that reserve doesn't
really do much if the shortage is now in refining.

There are refineries in operation. The SPR release is to help offset the
dropping offline of nearly 25% of our domestic crude production (Gulf rigs).
My understanding is much of the SPR crude is going to midwest refineries to
keep them running.

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John T
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"John T" wrote in message
...
"Dylan Smith" wrote in message


The Strategic Oil Reserve is crude oil. With 6 major refineries
currently shut down due to Katrina, releasing that reserve doesn't
really do much if the shortage is now in refining.

There are refineries in operation. The SPR release is to help offset the
dropping offline of nearly 25% of our domestic crude production (Gulf
rigs). My understanding is much of the SPR crude is going to midwest
refineries to keep them running.

--
John T
http://tknowlogy.com/TknoFlyer
http://www.pocketgear.com/products_s...veloperid=4415
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There is more refining capacity offline that production capacity. Releasing
crude from the SPR will do nothing.

Mike
MU-2

Mike Rapoport wrote:

There is more refining capacity offline that production capacity.
Releasing crude from the SPR will do nothing.

Percentage-wise, that is correct. However, the SPR oil will go to
refineries (mostly in the Midwest as I understand it) that are streamlining
gasoline production (thanks to the EPA relaxing regional formula
restrictions). This will help reduce or eliminate shortages.

Even if that's not the case, releasing the SPR signaled the market the
government will Do Something to settle oil futures prices.

Even if the effect of SPR oil on actual short-term fuel supplies ends up
being minimal, releasing the oil is the right thing to do. This is the very
type of emergency it should be used for (even if it was a different type of
emergency that spawned its creation).

--
John T
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"John T" wrote in message
...
Mike Rapoport wrote:

There is more refining capacity offline that production capacity.
Releasing crude from the SPR will do nothing.

Percentage-wise, that is correct. However, the SPR oil will go to
refineries (mostly in the Midwest as I understand it) that are
streamlining gasoline production (thanks to the EPA relaxing regional
formula restrictions). This will help reduce or eliminate shortages.

Even if that's not the case, releasing the SPR signaled the market the
government will Do Something to settle oil futures prices.

Even if the effect of SPR oil on actual short-term fuel supplies ends up
being minimal, releasing the oil is the right thing to do. This is the
very type of emergency it should be used for (even if it was a different
type of emergency that spawned its creation).

--
John T
http://tknowlogy.com/TknoFlyer
http://www.pocketgear.com/products_s...veloperid=4415
Reduce spam. Use Sender Policy Framework: http://spf.pobox.com
____________________



If the SPR oil goes to refineries in the midwest (where the supply of crude
is unaffected) how will that really help? I agree that announcing the
availiiblity of SPR oil has some marginal calming effect on the markets in
the immediate term, but it is not going to affect the supply of gasoline in
any meaningful way.

Mike
MU-2

Mike Rapoport wrote:

If the SPR oil goes to refineries in the midwest (where the supply of
crude is unaffected) how will that really help?

It will help ensure the supply of crude (that may have been coming from Gulf
sources/locations) is not interrupted.

--
John T
http://tknowlogy.com/TknoFlyer
http://www.pocketgear.com/products_s...veloperid=4415
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____________________

Mike Rapoport wrote:
If the SPR oil goes to refineries in the midwest (where the supply of crude
is unaffected) how will that really help? I agree that announcing the
availiiblity of SPR oil has some marginal calming effect on the markets in
the immediate term, but it is not going to affect the supply of gasoline in
any meaningful way.

Any thoughts as to how the SPR oil will be allocated?
Auction?

john smith wrote:

Any thoughts as to how the SPR oil will be allocated?
Auction?

Can't say, but we built a metering skid for the one in the Sulphur, La.
area (West Hackberry). That was after the salt dome got penetrated by a
well digger and set on fire. They had no idea how much was in there nor
how much was lost. So they used the skid to meter what was pumped out
and from then on, what was pumped back into it... Badly twisted my ankle
on that b*tch when I jumped off of it from making final adjustments, a
steel toed boot got hung between the fins on the explosion proof box. 3
days later I put down my crutches and limped down the isle that weekend
to marry my wife, 25 years ago come January...

"john smith" wrote in message
. ..
Mike Rapoport wrote:
If the SPR oil goes to refineries in the midwest (where the supply of
crude is unaffected) how will that really help? I agree that announcing
the availiiblity of SPR oil has some marginal calming effect on the
markets in the immediate term, but it is not going to affect the supply
of gasoline in any meaningful way.

Any thoughts as to how the SPR oil will be allocated?
Auction?

No. The SPR "lends" the crude to the refiner and the refiner than replaces
it at a later date.

Mike
MU-2

John T wrote:


Percentage-wise, that is correct. However, the SPR oil will go to
refineries (mostly in the Midwest as I understand it) that are streamlining
gasoline production (thanks to the EPA relaxing regional formula
restrictions). This will help reduce or eliminate shortages.

Exactly. Abolishing the EPA requirements of all of those different blends
will do far more to make gasoline available than any amount of crude oil
from the SPR.