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Ask the Times: U.S. oil reserves tapped twice in history

U.S. oil reserves tapped twice

When our oil reserves are tapped, how does that work? Does the government sell the oil to local refineries?

The U.S. Department of Energy says there are 726.6 million gallons of crude oil stockpiled in the Strategic Petroleum Reserve, the highest level in its history. It was established after the 1973-74 oil embargo as a way to give the president an option to a disruption in oil supplies that might threaten the U.S. economy.

The oil is stored in a complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana gulf coasts. The area was chosen because of the presence of more than 500 salt domes, which are an inexpensive and secure way to store oil, and because of the proximity to oil refineries and to distribution points. The reserve has been tapped just twice by presidential order:

• In 1991, the government sold 17.3 million barrels of oil to 13 companies as its part of the international effort to mitigate oil flow interruptions caused by the war against Iraq.

• In 2005, 20.8 million barrels were sold to five companies to offset the lost production caused by Hurricane Katrina.

The oil can be drawn down at a rate of 4.4 million barrels a day, and it takes about two weeks from the issuing of a presidential order for the oil to enter the U.S. market.

When a presidential order to tap the reserves is issued, the oil is offered for sale. The government solicits bids and oil is sold to the highest bidders. The oil is then pumped out of storage and transferred to those companies, primarily by pipeline but also via tankers or barges.

For further details, see fossil.energy.gov/ programs/reserves/spr/spr-facts.html.

A closer look at ethanol

Is it true that the production of ethanol uses 6 gallons of water for every gallon of ethanol distilled? And that gasoline containing ethanol pollutes more than straight gasoline?

The amount of water used to produce ethanol is strongly dependent on the type of process and feedstock used and what co-products are produced, Jen Stutsman, spokeswoman for the U.S. Department of Energy, told the Atlanta Journal-Constitution.

The vast majority of ethanol in the United States is made from corn. DOE's biomass program is working with industry to develop cellulosic, nonfood feedstocks that will have many advantages over the use of corn, including using less water, she said.

Ethanol is usually added to gasoline to reduce pollution over straight gasoline. It serves as an oxygenate that the EPA says "can boost gasoline's octane quality, enhance combustion and reduce exhaust emissions."

Emissions from vehicles using pure gasoline or gasoline containing ethanol vary among different vehicles, she wrote.

Ask the Times: U.S. oil reserves tapped twice in history 03/14/11 [Last modified: Monday, March 14, 2011 11:34pm]
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