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DOE says only one-third of emergency oil will be additional Two-thirds will replace imported oil that refineries will not buy because government oil available, DOE acknowledges H. Josef Hebert Associated Press Writer
On Sept. 22, President Clinton directed that 30 million barrels be taken from the government’s Strategic Petroleum Reserve to ease expected problems in the supply of winter heating oil. Only about a third of the 30 million barrels of oil will result in additional oil going to refineries, an Energy Department report acknowledged Oct. 6.
The rest will displace 20 million barrels of imported oil that refineries will not buy because of the availability of the government oil, said the winter fuels report issued by the department’s Energy Information Administration.
Mark Mazur, the statistical agency’s acting administrator, said the 10 million barrels in additional oil to refineries is still expected to produce 3 million to 5 million barrels of heating oil and diesel fuel, the number that administration officials have cited throughout.
While oil inventories remain low at about 290 million barrels, or 17 million barrels below levels a year ago, the EIA report said stocks are expected to increase somewhat between now and winter. Is heating oil going to Europe? Oil industry representatives, and some Republican members of Congress, have questioned whether refiners, who recently have been running at up to 96 percent capacity, will be able to absorb an additional 30 million barrels.
“How much additional crude they could actually be able to run through has always been unclear,” said John Felmy of the American Petroleum Institute, the trade group for the major oil companies.
Energy Department officials as well as some members of Congress expressed concern that refiners may be exporting heating oil to Europe, where the supply crunch is even more severe and prices are higher.
Mazur said analysts are puzzled why refineries are operating at top capacity but inventories of heating oil is remaining low, and he did not rule out that some heating oil may be being exported.
Sen. Frank Murkowski, R-Alaska, chairman of the Senate Energy Committee, said such exports may blunt the impact of oil from the government reserve.
Murkowski, who has been critical of the decision to use the emergency oil, said he was concerned that “we are going to release oil from our (reserve) to provide product for a European market.”
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