TAMPA — Energy Secretary Rick Perry and President Trump have decided to put hundreds of thousands of gallons of petroleum into the U.S. oil supply. Where is it all coming from?
You might not know this, but the U.S. has a ton of crude oil - 679 million barrels right now.
That works out to about five months of oil that we would need to keep everything running just like normal in the country, sitting in man-made salt caverns 2,000 to 4,000 feet underground at four sites all along the Gulf Coast.
They have to pump fresh water under the oil so it rises to the top to get it out.
We started stockpiling oil back in the 1970s when OPEC wouldn't sell us any.
But it's not 1974 anymore. We have plenty of oil in the country, so why tap into our emergency reserves?
“The refineries in the Gulf Coast region that are still open are having issues actually getting crude oil supplies from their normal routes - from the Houston and Texas area down there – so this reserve in Louisiana kind of helps get some of those gasoline products refined,” said AAA’s Josh Carrasco.
So the issue isn't how much oil is available, it's converting that oil to gas and diesel in the Gulf Coast region.
The refineries in Texas can't do their jobs right now, so the gas you are getting at the pump is coming from the New York area and European refineries.
The longer the distance gas has to travel to you, the more pain you see at the pump.
And since the supply chain along the Gulf Coast is so disrupted, you're seeing prices go up.
The oil President Trump put into play is going to working refineries in Louisiana that aren't able to get crude oil from their Texas supply line.
Still it's going to take a few days for new Gulf Coast gas from Louisiana to get to you, and a week or more before Texas refineries are up and running.
AAA expects prices at the pump to go up at least through Labor Day.
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