Sep 1, 2017 - Economy
Energy Secretary tapping emergency crude reserves to ease gas prices
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Jacquelyn Martin / AP
Energy Secretary Rick Perry announced Thursday he will be releasing 500,000 barrels of crude oil from an emergency reserve to ease gas price spikes in light of disruptions to energy infrastructure due to Hurricane Harvey, per the AP.
- The EPA has also expanded emergency gasoline waivers to include 38 states and D.C. to avoid disruptions related to the storm, per the AP.
- The Department of Transportation is waiving operator qualifications to "expedite the engagement of pipeline" personnel to help with response and recovery S&P Global Platts reports.
The latest on the disruptions:
- Gas prices: So far, the national average for gas at the pump was up Thursday afternoon to $2.48, up more than 13 cents from last week's average of $2.35, per GasBuddy.com. Gasoline futures shot up 14% Thursday, which indicates gas prices will likely keep increasing.
- Refining: At least 4.3 million barrels per day of refining capacity, over 20% of U.S. capacity, are offline in Texas and Louisiana, per Reuters. There's a concern that most Texas refineries will be affected for weeks, not just days, CNN reports. The largest refinery in the U.S. in Port Arthur, Motiva's refinery, was shut down, along with Valero, Wednesday. About 15 refineries have shut down in total, accounting for about a quarter of U.S. refining capacity, per GasBuddy.com.
- Pipelines: Colonial Pipeline, which operates the largest refined petroleum network in the country, had to shut down its major pathways because it doesn't have enough product from the affected refineries. Colonial Pipeline said it expects service to resume Sunday. Explorer Pipeline system is also not operating due to reduced refiner supply, WSJ reports.
- Reduced supplies: Cities from Texas to Maryland are going to see "significantly reduced or unavailable supply," according to Mansfield Oil Co., WSJ reports. Due to fears of reduced supply, some gasoline is being shipped to the South from the North of the country, an unusual route, WSJ reports. U.S. gas exports to Mexico are also reduced, per S&P Global Platts. Prices are rising on European gasoline products, and is the most expensive it's been in two years, allowing them to profit from overseas shipping, per the WSJ.
- Fracking delays: More than half of the rigs running in Eagle Ford Shale, one of the nation's busiest oil fields, are estimated to have been suspended. It was the only shale basin of the big four to stop activity, but it's estimated the floodwaters could delay 10% of U.S. fracking, Bloomberg reports.
- Utilities in Texas and Louisiana reduced the number of customers without power to about 209,000, per Platts. The Public Utility Commission of Texas has suspended some rules to expedite the relief efforts. Centerpoint Energy, Houston's main transmission and distribution utility said about 23,000 are still inaccessible due to floodwaters as of about 10am Thursday. American Electric Power cut customer outages in Texas to 88,000 from a Sunday height of 220,000, per SeekingAlpha.
