Fill ‘er Back Up

By January 5, 2009Energy

News we missed during our extended solstice siesta, from the Department of Energy, a January 2 news release:

WASHINGTON, DC — The U.S. Department of Energy today announced that it plans to take advantage of the recent large decline in crude oil prices, and has issued a solicitation to purchase approximately 12 million barrels of crude oil for the nation’s Strategic Petroleum Reserve (SPR) to replenish SPR supplies sold following hurricanes Katrina and Rita in 2005.

In addition, DOE is also moving forward with three other SPR acquisition and/or fill activities in order to fill the SPR as Congress directed in the 2005 Energy Policy Act (EPAct): refiner repayments of SPR emergency oil releases following Hurricanes Gustav and Ike; the delivery of deferred royalty-in-kind (RIK) oil; and the solicitation of new RIK deliveries in the spring of 2009.

The ban on SPR purchases contained in the ‘‘Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act of 2008’’ expired December 30, allowing the renewed purchases.

The law went into effect on May 18 and the price of crude oil topped out above $140 a barrel at the end of June. Since then, down, down, down. Who would have thought an SPR moratorium would work such a powerful effect on prices?

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