Some time back the Clinton-Gore administration announced it expected a heating oil shortage this winter. They now tell us that heating oil supplies are extremely low in the tank farms of oil suppliers in the northeast U.S. The next step was the plan to release oil from the strategic reserve in November at a rate that only increases oil availability by about 5.5 percent of daily usage for one month.
Now when told heating oil would be in short supply, prudent people and companies had their tanks filled up ... creating an unusually low supply in the tank farms, but not necessarily a shortage of heating oil. The root concern about heating oil was not availability, but cost.
Some Organization of Petroleum Exporting Countries have agreed to increase production to reduce the price. Other OPEC nations are concerned about a rapid fall in price that will not cover the costs of production.
What we are not told is how fast can OPEC countries produce oil and ship it to world markets. The pumping rate at oil fields has always produced enough oil in the past.
Next, how rapidly can oil be shipped to world markets? Shipments have kept up with demand in the past, but how soon could increased production be seen in world market supplies and reduce the price?
How fast can refineries refine the oil into the various products they produce, heating oil and gasoline being the two most prominent. Heating oil prices are low in the summer because demand is low, but then it goes up in the winter. The refineries have kept up with demand in the past, has anything changed?
Some say the Clinton-Gore administration had no energy policy the past seven years. Others point out they have restricted drilling for oil in the U.S., impeded increases in oil shipping capacity, and regulated against increased refinery production.
The national press could serve the public interest by providing the facts about the present oil situation.
Gene England, Aiken
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