united states energy emergency response november 7, 2012
DESCRIPTION
Click to edit Master title style. United States Energy Emergency Response November 7, 2012. David Johnson Deputy Assistant Secretary Office of Petroleum Reserves Washington, DC. Energy Emergency Response Programs. Strategic Petroleum Reserve. Northeast Home Heating Oil Reserve. - PowerPoint PPT PresentationTRANSCRIPT
Click to edit Master title style
United States Energy Emergency Response
November 7, 2012
Click to edit Master title style
David JohnsonDeputy Assistant Secretary
Office of Petroleum ReservesWashington, DC
Click to edit Master title styleEnergy Emergency Response
Programs
Strategic Petroleum Reserve Northeast HomeHeating Oil Reserve
Established in 1975727 Million Barrels Reserve
Crude Oil
Established in 20001 Million Barrel Reserve
Heating Oil (ULSD)
2
Click to edit Master title style
3
United States Strategic Petroleum Reserve
Established by U.S. Law:Energy Policy & Conservation Act (EPCA)December 1975
Mission:To ensure U.S. Energy Security:− To reduce the impacts of potential
disruptions in U.S. petroleum supplies.− To carry out U.S. obligations under
International Energy Program (IEA).
● National Energy Policy (2001):“the United States also counts on the Strategic Petroleum Reserve as a national defense fuel reserve”
1973 Arab Oil Embargo
International Energy Program
Click to edit Master title styleStrategic Petroleum Reserve
Implementation
● U.S. Government Ownership
● Centralized in U.S. Gulf Coast– Major U.S. Refining Centers– Entry Point for 70% of U.S. Imports– Flexibility in Response
● Underground Storage in Salt Dome Formations
‒ Maximum Safety and Security‒ Low Environmental Impacts‒ Lowest Storage Cost
● Crude Oil Storage Only‒ Light Low-Sulfur Crude (S<0.5%)‒ Light Med-Sulfur Crude (S<2.0%)
4
Click to edit Master title style
5
Strategic Petroleum Reserve Storage Facilities
Storage Facility Capacity Inventory DD RateBryan Mound 254 Million 241 Million 1.35
MMB/d*Big Hill 170 Million 165 Million 1.1
MMB/dWest Hackberry 227 Million 216 Million 1.3 MMB/dBayou Choctaw 76 Million 73 Million 0.5 MMB/dTotal 727 Million 695 Million 4.25
MMB/d
Bayou ChoctawBig HillBryan Mound West Hackberry
____________* Bryan Mound Drawdown Rate - Reduced from 1.5 Million B/D to 1.35 Million B/D due to a storage tank out-of-service
Click to edit Master title style
6
Strategic Petroleum Reserve Oil Drawdown Capability
3.6
2.0
3.8
4.4
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1 - 30 30 - 60 60 - 90 91 - 120 121 - 150 151 - 180Days
Mill
ions
of B
arre
ls p
er D
ay
695 Million Barrel Crude Oil Inventory
• Maximum Sustained Drawdown : 4.4 Million B/D for 90 Days • Full Drawdown of Inventory in 180 Days
Click to edit Master title style
7
Strategic Petroleum Reserve Oil Distribution Capability
Puerto Rico/Virgin Islands
PADD VPADD I
Hawaii
SPR
PADD III
PADD IV PADD II
Puerto Rico/Virgin Islands
PADD VPADD I
Hawaii
SPR
PADD III
PADD IV PADD II
Pipeline Capabilities - 23 Gulf Refineries (Imports of 3.6 MMB/D) Marine Capabilities - 5 Terminals (Capacity of 2.5 MMB/D)
Click to edit Master title style
0
20
40
60
80
100
120
140
0%
10%
20%
30%
40%
50%
60%
70%
1975 1980 1985 1990 1995 2000 2005 2010 2015
Equi
vale
nt D
ays
of N
et P
etro
leum
Impo
rts
Cru
de O
il Im
port
Dep
ende
nce
(%)
Historical Projected (STEO) SPR Protection
United StatesCrude Oil Import Protection
*STEO: EIA Short-Term Energy Outlook (October 2012)8
Click to edit Master title styleSPR Drawdown Policies
● Energy Policy & Conservation Act:‒ Release Authority: President of the U.S.‒ Conditions for Release:
• “Severe Petroleum Supply Interruption”• To meet U.S. obligations in an IEA Action
‒ Other Authorities: Test Sales & Exchanges‒ Release Method: Public Sale Offering‒ Exports: Restrictions‒ SPR Oil Account for Repurchase
● U.S. Administration Policy on SPR:‒ To be used in coordination with IEA‒ To be used to mitigate economic damage resulting from supply
shortages, not to control oil prices
9
Click to edit Master title style
10
Prior SPR Oil Releases
● SPR Drawdowns (IEA Actions): ‒ 1991 Iraq War: 17.3 MMB ‒ 2005 Hurricane Katrina: 11.0 MMB‒ 2011 Libya Situation: 30.6 MMB
● SPR Test Sales: ‒ 1985 Test Sale: 1.0 MMB‒ 1990 Test Sale: 3.9 MMB
● Emergency Exchanges (Loans):‒ Seaway Emergency (1996): 1.0 MMB‒ Ship Channel Closure (2000): 1.0 MMB‒ Time Exchange 2000: 30.0 MMB‒ Hurricane Ivan (2004): 5.4 MMB‒ Hurricane Katrina (2005): 9.8 MMB‒ Ship Channel Closures (2006): 1.6 MMB‒ Hurricane Gustav/Ike (2008): 5.4 MMB‒ Hurricane Isaac (2011): 1.0 MMB
1991 Iraq War
2005 Hurricane Katrina
Click to edit Master title styleUnited States
Northeast Home Heating Oil Reserve
Established by Law:• President Clinton directed the Reserve
establishment in July 2000.
Mission: • To protect the Northeast against high
vulnerability of winter-related supply shortages.
• To protect the safety and health of the Northeast Residents.
Implementation Policy:• Size: 1 Million Barrels • Stocks: Ultra Low Sulfur Distillate (ULSD)• Storage Location: New England (CT & MA)• Protection: 5-6 days of Consumption
11
Click to edit Master title style
SPR3324.ppt
PADD V & PADD IV< 2%
35.9%(41,852)
49.5%(57,697)
5.6%(6,568)1.6%
(1,881)
5.7%(6,663)
SPR3324.ppt
PADD 1A
PADD 1CPADD III
PADD IIPADD 1B
Petroleum Allocation Defense Districts (PADD)(Thousand Barrels)
United StatesHeating Oil Consumption
12
Click to edit Master title styleStrategic Petroleum Reserve
Drawdown 2011
IEA Collective Action:• On 6/23/11, the IEA announced the planned release
of 60 million barrels to address the oil shortages created by the disruption in Libyan oil supplies.
• IEA Allocation: 50% from N. America, 30% from Europe & 20% from Asia.
• U.S. Share of the Collective Action: 30.237 million barrels.
U.S. Response Action:• On 6/23/11, the President directed the Secretary of
Energy to draw down the SPR to meet U.S. obligations under the International Energy Program.
• On 6/24/11, the SPR issued a Notice of Sale for:– 30 million barrels of light sweet crude– Delivery in July and August 2011
13
Click to edit Master title styleStrategic Petroleum Reserve
Oil Sale & Drawdown ActivitiesIEA
Announces Oil Release
Bid PeriodJun 24-292PM EDT
PostSPR Notice
of Sale
Notification SuccessfulOfferors
SubmissionFinancial
Guarantees
Certify LOC & Award Contracts
Commence Early Oil
Deliveries
CommenceLast Oil
Deliveries
Scheduling Of Oil
Deliveries
14
Click to edit Master title style
15
SPR Drawdown 2011
U.S. IEA Obligation 30.237 Million BarrelsU.S. SPR Response 30.640 Million Barrels
Click to edit Master title style
16
SPR Drawdown 2011
Click to edit Master title styleU.S. Hurricane Vulnerability
• Approx. 50% of the U.S. petroleum refining capacity is located along the U.S. Gulf of Mexico coastline.
• The Gulf Coast has been impacted by 14 Hurricanes since 1998, including 5 major ones (Cat 3-5).
• The annual probability of having one or more hurricanes hitting the Gulf Coast is 56.4% (NOAA).
• Hurricanes cause disruption to U.S. oil production, refining operations and product supplies.
Year Name Category at Landfall
Landfall Date
1998 George Cat 2 9/28/1998
1999 Bret Cat 3 8/23/1999
2002 Lili Cat 1 10/3/2002
2003 Claudette Cat 1 7/15/2003
2004 Ivan Cat 3 9/16/2004
2005 Cindy Cat 1 7/6/2005
2005 Dennis Cat 3 7/10/2005
2005 Katrina Cat 4 8/29/2005
2005 Rita Cat 3 9/24/2005
2007 Humberto Cat 1 9/13/2007
2008 Dolly Cat 1 7/23/2008
2008 Gustav Cat 2 9/1/2008
2008 Ike Cat 2 9/13/2008
2012 Isaac Cat 1 8/28/2012
17
Click to edit Master title styleHurricane Vulnerability
of Gulf Coast Refining Centers
Petronius
Blind FaithThunder Hawk
Thunder HorseDevil’s Tower
URSAMars
Droshky
SS 332
Neptune
AtlantisShenzi
Mad Dog
PoseidonConstitution
Ticonderoga
Tahiti
CascadeChinook
JackSt. Malo
LOOP
Auger
Perdido
HOOPS
Cameron
Highway
Poseidon
Auge
r
Pose
idon
Ambe
rjack
Alleghen
yCaesar
Eugene Island
Mars
Mardi
Gras
Odyssey
Mountaineer
Locap
Cap
line
Shell
U.S Department of EnergyStrategic Petroleum Reserve Program
Washington, D.C. 20585
Platform
Offshore Port
Refinery
Major Pipeline
SPR Site
Gulf of Mexico
11 Refiners Capacity
2,347 MBD
9 Refiners Capacity
2,325 MBD
7 Refiners Capacity
1,817 MBD
4 Refiners Capacity688 MBD
2 Refiners Capacity410 MBD
HOUSTON PASCAGOULA
CORPUS CHRISTI
FREEPORT
TEXAS CITY
PORT ARTHUR
LAKE CHARLES
BATON ROUGE
NEW ORLEANS
Bryan Mound
Big Hill
West Hackberry
Bayou Choctaw
SPR3315.PPT
Hurricane LandfallVulnerabilities
Highest
Moderate
Lowest
18
Click to edit Master title styleGulf Coast Hurricane Impacts
2005 and 2008
Hurricanes Katrina & Rita Impacts in 2005 • Category 3 & 4 Hurricanes• 26 refineries were shutdown• Recovery time 18 weeks
– 2 refiners required 8-9 months• Refined Product Losses - 180 million barrels
– Katrina – 113 million barrels– Rita – 67 million barrels
Hurricanes Gustav & Ike Impacts in 2008 • Both Category 2 Hurricanes • 26 refineries were shutdown• Recovery time 14 weeks• Refined Product Losses - 103 million barrels
– Gustav – 39 million barrels– Ike – 64 million barrels
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
8/29 9/59/12
9/199/26
10/310/1
010/1
710/2
410/31
11/711/1
411/2
111/2
8
Shut
dow
n Re
finer
y Ca
paci
ty (B
/D)
Hurricane Katrina Hurricane Rita
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
8/30 9/1 9/3 9/5 9/7 9/99/11
9/139/15
9/179/19
9/219/23
9/259/27
9/2910/1 10/3 10/5 10/7 10/9
Shut
dow
n Re
finer
y Ca
paci
ty (B
/D)
Hurricane Gustav Hurricane Ike
19
Click to edit Master title styleStrategic Petroleum Reserve
Hurricane Responses
Year Hurricane EmergencyOil Exchanges
DrawdownOil Sale
2002 Hurricane Lili 100,000 Bbl(1 contract)
-
2004 Hurricane Ivan 5,400,000 Bbl(6 contracts)
-
2005 Hurricane Katrina/Rita 9,800,000 Bbl(6 contracts)
11.0 MMB
2008 Hurricane Gustav/Ike 5,200,000 Bbl(16 contracts)
-
2012 Hurricane Isaac 1,000,000 Bbl(1 contract)
20
Click to edit Master title styleHurricane Isaac 2012
21
Hurricane Isaac• Category 1 Hurricane• 5 Refineries Shutdown• 6 Refineries Reduced Output• Recovery time:
– 4 Refineries in 7-10 days– 1 Refinery - 3 weeks
U.S. Oil Supply Impacts• Crude Production – 12 Million Bbl• Refined Products – 13 Million Bbl
U.S. SPR Release -1 Million Bbl
Click to edit Master title styleHurricane Sandy 2012
FEMA coordinated Federal emergency assistance responses of Federal Agencies.
DOE released ULSD from NE Reserve to DLA for emergency generators & responder needs.
DHS waivered US Coastwise Shipping Law (Jones Act) for movement of oil products from Gulf to East Coast by Foreign vessels.
EPA issued waivers of EPA restrictions on conventional fuels, ULSD and vapor emissions for states and terminals.
DOT issued waivers for truckers hours-of-service, fuel truck size and weight, ULSD usage, interstate tolls, vehicle registration requirements and fuel tax.
22
Click to edit Master title styleU.S. Strategic Petroleum Reserve
Energy Security Role
• A National Insurance Policy against interruption in critical petroleum supplies (International crises, Terrorism, & Hurricanes).
• Provides a Deterrent to oil-based threats from oil producing nations and provides time for Diplomacy.
• Avails U.S. worldwide Emergency Assistance through IEA Alliance.
• Supports National Security for Military Fuel in the event of war.
23