The US government is providing 6 million barrels of oil to Exxon Mobil Corp. from the Strategic Petroleum Reserve (SPR) to replace supplies lost by Hurricane Katrina, the Energy Department announced Thursday.
"With the Reserve fully operational, we will be able to start delivering this oil as soon as tomorrow," Energy Secretary Samuel Bodman said in a press release.
The department are reviewing other companies' requests for emergency oil loan, Bodman said. "We are committed to doing everything in our power to meet the immediate needs of those directly affected by Hurricane Katrina."
The 6-million-barrel oil will go to Exxon Mobil Corp. for its Baton Rouge, Louisiana, refinery. The refinery has continued to operate, but scaled back production because of a shortage of crude oil.
It was reported on the same day that the government had approved requests by two other companies for oil loan. Valero, which reduced production from its Krotz Springs refinery in Louisiana, borrowed 1.5 million barrels. And Placid Refining Co. LLC got a loan of one million barrels.
According to the Energy Department, eight refineries in Louisiana and Mississippi, accounting for a total of 1.8 million barrels a day of capacity, have been shut down because of Hurricane Katrina. Another 12 US refineries have been forced to cut production.
The SPR currently holds oil of more than 700 million barrels. Following Hurricane Ivan in September 2004, the Bush administration released 5.4 million barrels of crude oil from the reserve to a number of refineries to ensure smooth supplies.
The country does not have a similar emergency stockpile for gasoline. Government data showed that commercial gasoline inventories are below normal levels.
The government is giving refineries a temporary supply of crude oil to take the place of interrupted shipments from tankers or offshore oil platforms affected by the storm. The refineries are required to return the same amount, plus a premium, to the SPR at a future date.