The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“THE HEATING OIL RESERVE” mentioning the U.S. Dept. of Energy was published in the Senate section on pages S9917-S9918 on Oct. 5, 2000.
The publication is reproduced in full below:
THE HEATING OIL RESERVE
Mr. MURKOWSKI. Mr. President, I think Senator Domenici will be seeking recognition. First, I want to take 2 minutes to alert my colleagues to what I think is a very significant issue.
Much has been made of late about the status of the Strategic Petroleum Reserve and the recommendation by Vice President Gore that we withdraw 30 million barrels out of the SPR so we can build up our heating oil reserve. Let me tell you what is happening to that.
The administration forgot a very important detail when they put that oil up to bid for the refiners. They didn't mandate that the crude oil be refined into heating oil or that it be used to build inventories here in the United States for the benefit of the Northeast States that need that heating oil inventories built up.
What will happen to the crude oil or refined product? It will go into the marketplace, and it is going to Europe because Europe is paying a higher price for heating oil than the United States. Currently, 167,000 barrels a day of distillate is exported.
Let me tell you what came out of the Houston Chronicle, and I quote:
The buyers can do what they wish with the oil, such as sell or swap it, said Department of Energy spokesperson Drew Malcomb, although whoever ends up with the oil has to get it out of storage by the end of November.
The extra crude won't result in any additional heating oil because all the heating oil facilities already are operating at maximum capacity, Brown said.
There you have it. You have an administration that said we had an emergency, we had to go into SPR, address our heating oil situation, while sending a message to the Mideast that we are reducing our savings account. Then we find we may not build up our domestic heating oil inventories at all with this oil, it is going up for sale into the market and ending up in Europe because the administration didn't mandate that if you bought the oil, you had to keep it here in the United States.
Senator Stevens and I have experienced some demands relative to our inability to move our oil out of our State.
It is inconsistent to me that the administration could make such a poor business deal. We have not accomplished anything with SPR. We have simply increased our exports of heating oil. I think it is a charade.
I thank my colleague from New Mexico. But I did want to call that to your attention.
Mr. President, I ask unanimous consent to have printed in the Record an article from the Houston Chronicle entitled ``Oil from Reserve in High Demand'' and two tables on distillate exports.
There being no objection, the material was ordered to be printed in the Record, as follows:
Oil From Reserve in High Demand--Bidders Grab 30 Million Barrels
(By Nelson Antosh)
Trading companies and refiners looking for a good deal on crude have snapped up all 30 million barrels that the federal government is releasing from the Strategic Petroleum Reserve.
The Energy Department announced Wednesday that 11 companies, some of them with names little known even within the industry, had submitted the best bids for the oil being held underground in Louisiana and Texas.
The buyers in effect promised to return to storage 31.56 million barrels between August and November of next year, thus paying a premium of about 5 percent.
But by using the futures market, the successful bidders will be able to pay back with oil cheaper than what it is today, even if the real market price for crude may be higher by then.
``A good transaction for value,'' said Mary Rose Brown of Valero, a San Antonio-based company that will be refining its federal crude. The difference between Wednesday's futures and the payback cost is $3.25 per barrel, she said.
The futures price for next October is $28.53, said Kyle Cooper of Salomon Smith Barney in Houston, who reasons that all the reserve sale does is ``move around crude.''
In contrast to next October, the sweet crude contract for next month settled Wednesday on the New York Mercantile Exchange for $31.43 per barrel.
The buyers can do what they wish with the oil, such as sell or swap it, said DOE spokesman Drew Malcomb, although whoever ends up with the oil has to get it out of storage by the end of November.
Valero will be taking 1 million barrels of sour crude from the Bryan Mound storage site near Freeport and splitting it between its refineries in Texas City and Freeport.
That crude will be co-mingled with other supplies and be made into a full range of products, including gasoline.
The extra crude won't result in any additional heating oil because all the heating oil facilities already are operating at maximum capacity, Brown said. Valero even shifted some of its distillate output at a New Jersey refinery from premium-priced jet fuel into home heating oil.
``The product will go where the market is,'' said Malcomb, although he said his agency would prefer that it be refined into heating oil and be shipped to the Northeast.
Vitol, a trading company in Houston that also owns a refinery in Canada, will get 1.05 million barrels of sweet crude out of a storage site in Louisiana and 550,000 sour barrels out of Bryan Mound.
The company will apply for an export license, but logically it is a better value if sold along the Gulf Coast, said a Vitol employee who preferred not to be identified.
Marathon Ashland Petroleum LLC, a Houston-based venture that is a major refiner, was the high bidder on 2.4 million barrels of sour crude and 1.5 million barrels of sweet crude.
The DOE did not release the amounts that individual companies promised to return to the reserve, because that could influence any future sales.
Morgan Stanley Dean Witter of New York was the high bidder on 2 million barrels.
Lesser known names were Euell Energy of Aurora, Colo., which was the high bidder on 3 million barrels, Burhany Energy Enterprises of Tallahassee, Fla., also with 3 million barrels, and Lance Stroud Enterprises of New York with 4 million barrels.
Equiva Trading, which is a Houston-based alliance between Shell and Texaco, will get 2.5 million barrels. A spokesman could not be reached late Wednesday.
Elf Trading, also based in Houston, is getting 1 million barrels.
The largest quantity, 6 million barrels, was won by BP Oil Supply Co., in Warrenville, Ill.
``Every barrel we can get into the market in the next few weeks reduces the risk of a shortage of heating oil and diesel fuel this winter,'' said Secretary of Energy Bill Richardson in a news release. ``This is good for consumers and good for our nation's long-term security,''
Some have criticized releasing oil from the Strategic Petroleum Reserve as a political ploy to get more votes in the Northeast, where heating oil is widely used.
TABLE 5. U.S. YEAR-TO-DATE DAILY AVERAGE SUPPLY AND DISPOSITION OF CRUDE OIL AND PETROLEUM PRODUCTS, JANUARY-JUNE 2000
[Energy Information Administration/Petroleum Supply Monthly, August 2000; in thousand barrels per day]
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Supply Disposition
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Commodity Unaccounted
Field Refinery Imports for crude Stock Crude Refinery Exports Products
production production oil a change b losses inputs supplied c
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Crude Oil.......................... E 5,851 ........... 8,655 432 64 0 14,787 87 0
Natural Gas Liquids and LRGs....... 1,956 754 204 ........... 59 ........... 357 83 2,414
Pentanes Plus.................. 307 ........... 28 ........... 6 ........... 133 4 192
Liquefied Petroleum Gases...... 1,649 754 176 ........... 53 ........... 225 79 2,222
Ethane/Ethylene............ 746 29 23 ........... 6 ........... 0 0 791
Propane/Propylene.......... 549 597 124 ........... 8 ........... 0 60 1,201
Normal Butane/Butylene..... 163 121 13 ........... 34 ........... 120 19 125
Isobutane/Isobutylene...... 191 7 17 ........... 6 ........... 105 0 105
Other Liquids...................... 177 ........... 642 ........... 63 ........... 807 47 -98
Other Hydrocarbons/Oxygenates.. 339 ........... 62 ........... 4 ........... 367 30 0
Unfinished Oils................ ........... ........... 348 ........... 23 ........... 427 0 -102
Motor Gasoline Blend. Comp..... -162 ........... 231 ........... 37 ........... 16 16 0
Aviation Gasoline Blend. Comp.. ........... ........... 0 ........... -1 ........... -3 0 3
Finished Petroleum Products........ 218 16,146 1,282 ........... 70 ........... ........... 775 16,801
Finished Motor Gasoline............ 218 7,842 347 ........... 76 ........... ........... 109 8,223
Reformulated............... ........... 2,533 176 ........... 5 ........... ........... 1 2,703
Oxygenated................. 561 107 1 ........... -1 ........... ........... 1 669
Other...................... -343 5,202 170 ........... 71 ........... ........... 107 4,851
Finished Aviation Gasoline..... ........... 17 (s) ........... -1 ........... ........... 0 19
Jet Fuel....................... ........... 1,570 129 ........... 22 ........... ........... 27 1,650
Naphtha-Type............... ........... (s) 2 ........... (s) ........... ........... (s) 2
Kerosene-Type.............. ........... 1,570 127 ........... 22 ........... ........... 27 1,648
Kerosene....................... ........... 58 3 ........... -10 ........... ........... 1 70
Average exports per day:
Distillate Fuel Oil............ ........... 3,414 274 ........... -97 ........... ........... 152 3,634
0.05 percent sulfur and ........... 2,364 139 ........... -1 ........... ........... 35 2,469
under.....................
Greater than 0.05 percent ........... 1,049 136 ........... -96 ........... ........... 117 1,164
sulfur (Heating oil only).
Residual Fuel Oil.............. ........... 657 212 ........... 7 ........... ........... 141 721
Naphtha For Petro. Feed Use.... ........... 164 104 ........... (s) ........... ........... 0 268
Other Oils For Petro. Feed use. ........... 203 154 ........... (s) ........... ........... 0 357
Special Naphthas............... ........... 102 11 ........... -1 ........... ........... 21 94
Lubricants..................... ........... 187 14 ........... -1 ........... ........... 27 174
Waxes.......................... ........... 15 2 ........... (s) ........... ........... 3 14
Petroleum Coke................. ........... 704 1 ........... 1 ........... ........... 289 416
Asphalt and Road Oil........... ........... 508 29 ........... 75 ........... ........... 4 458
Still Gas...................... ........... 652 0 ........... 0 ........... ........... 0 652
Miscellaneous Products......... ........... 53 (s) ........... (s) ........... ........... (s) 53
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Total...................... 8,201 16,900 10,783 432 256 0 15,952 992 19,117
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a Unaccounted for crude oil represents the difference between the supply and disposition of crude oil. Preliminary estimates of crude oil imports at the
National level have historically understated final values by approximately 50,000 barrels per day. This causes the preliminary values of unaccounted
for crude oil to overstate the final values by the same amount.
b A negative number indicates a decrease in stocks and a positive number indicates an increase in stocks.
c Products supplied is equal to field production, plus refinery production, plus imports, plus unaccounted for crude oil, minus stock change, minus
crude losses, minus refinery inputs, minus exports.
(s) = Less than 500 barrels per day.
E = Estimated.
LRG = Liquefied Refinery Gas.
-- = Not Applicable.
Note: Totals may not equal sum of components due to independent rounding.
Sources: Energy Information Administration (EIA) Forms EIA-810, ``Monthly Refinery Report,'' EIA-811, ``Monthly Bulk Terminal Report,'' EIA-812,
``Monthly Product Pipeline Report,'' EIA-813, ``Monthly Crude Oil Report,'' EIA-814, ``Monthly Imports Report,'' EIA-816, ``Monthly Natural Gas
Liquids Report,'' EIA-817, ``Monthly Tanker and Barge Movement Report,'' and EIA-819M, ``Monthly Oxygenate Telephone Report''. Domestic crude oil
production estimates based on historical statistics from State conservation agencies and the Minerals Management Service of the U.S. Department of the
Interior. Export data from the Bureau of the Census and Form EIA-810, ``Monthly Refinery Report.''
THESE ARE B-B EXPORTED--AMERICAN PETROLEUM INSTITUTE, ENERGY INFORMATION
ADMINISTRATION
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Date Distillate
----------------------------------------------------------------\1\-----
January 1998............................................. 133
February 1998............................................ 79
March 1998............................................... 129
April 1998............................................... 186
May 1998................................................. 121
June 1998................................................ 149
July 1998................................................ 161
August 1998.............................................. 150
September 1998........................................... 107
October 1998............................................. 75
November 1998............................................ 54
December 1998............................................ 145
January 1999............................................. 117
February 1999............................................ 116
March 1999............................................... 159
April 1999............................................... 191
May 1999................................................. 187
June 1999................................................ 180
July 1999................................................ 123
August 1999.............................................. 130
September 1999........................................... 162
October 1999............................................. 192
November 1999............................................ 170
December 1999............................................ 212
January 2000............................................. 132
February 2000............................................ 112
March 2000............................................... 211
April 2000............................................... 178
May 2000................................................. 127
June 2000................................................ 149
July 2000................................................ 132
August 2000.............................................. 168
------------------------------------------------------------------------
\1\ Distillate fuel exports (Mbld), heating oil and diesel.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I understand I have up to 20 minutes as if in morning business.
The PRESIDING OFFICER. Ten minutes.
Mr. DOMENICI. I ask unanimous consent for up to 20 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DOMENICI. I understand Senator Sessions would like to follow me with 5 minutes, if there is no objection.
Mr. REID. Mr. President, reserving the right to object, the Senator from New Mexico wishes to speak for how long?
Mr. DOMENICI. Up to 20 minutes.
Mr. REID. We have the Senator from Alabama, and we have Senator Bryan who wishes 10 minutes. I ask that, using normal procedure, we have a Republican and a Democrat. I ask that Senator Bryan be the last speaker for up to 10 minutes.
Mr. DOMENICI. Mr. President, I assume we need Senator Sessions' concurrence.
Mr. SESSIONS. That is all right with me. I respect that. Senator Bryan will be the last. I defer to him.
Will the Senator restate the agreement? The Senator from New Mexico has 20 minutes, Senator Bryan has 10 minutes, and I have 5 minutes.
Mr. REID. That is correct.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
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