for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Environment

U.S. oil reserve site sustains 'considerable' damage from hurricane

WASHINGTON (Reuters) - The U.S. Energy Department said on Monday that a Strategic Petroleum Reserve site in Louisiana “sustained considerable damage” from Hurricane Laura and that detailed estimates of the harm done should be out later this week.

The department shut two of the four crude oil SPR sites ahead of Laura that made landfall early Thursday. The West Hackberry site in Louisiana is without access to commercial power, but there is “no threat to the integrity of the geologically sealed underground caverns, and no danger of contamination or concern for spills,” a department official said.

The other site that was shut, which is located in Big Hill, Texas, is back up and fully operational, and made a previously scheduled delivery of oil over the weekend, it said.

Nine oil companies this spring, including Exxon Mobil Corp Chevron Corp and Alon USA Inc [ALJON.UL], rented space to store more than 20 million barrels of oil at the reserve to help them deal with a dearth of storage as the coronavirus pandemic slammed fuel demand.

West Hackberry has 21 caverns and a storage capacity of 220 million barrels of crude. The SPR currently holds nearly 650 million barrels of mostly sour crude, well over the level required by international agreements.

The SPR is ready to support any emergency exchanges requests from refineries due to Laura through its Big Hill, Bryan Mound and Bayou Choctaw sites, it said, though the reserve has not received any requests for such deliveries.

Washington built the SPR in the 1970s, after the Arab oil embargo spiked gasoline prices and damaged the U.S. economy. It has occasionally held emergency sales and loans of oil to energy companies in the wake of storms. Most recently, the department loaned 5.2 million barrels of oil after Hurricane Harvey inundated Texas in 2017.

Reporting by Timothy Gardner; Editing by Marguerita Choy

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up