US Energy Secretary authorizes release of SPR crude to ExxonMobil's Baton Rouge refinery

US Energy Secretary Jennifer Granholm Sept. 2 authorized the release of 1.5 million barrels of crude from the Strategic Petroleum Reserve to exchange with ExxonMobil's Baton Rouge refinery.

The exchange was authorized "to alleviate any logistical issues of moving crude oil within areas affected by Hurricane Ida to ensure the region has access to fuel as quickly as possible as they continue their recovery," the Department of Energy said in a release.

The DOE "encourages refiners to prioritize refined products for the affected region, and remains committed to supporting those efforts through options such as the SPR," the department said.

Earlier in the day, US President Joe Biden said he directed federal agencies to use all tools to keep gasoline flowing in Louisiana and Mississippi in the aftermath of Hurricane Ida, including potentially tapping into the SPR and ordering the relaxing of truck drivers' hours to allow for more fuel deliveries.

Biden, who is traveling to Louisiana on Sept. 3, said in a press briefing that the White House is prioritizing fuel availability and expediting damage assessments and power restoration efforts after Category 4 Ida knocked out power for well more than 1 million electricity customers, mostly in southern Louisiana and near New Orleans.

With about 94% of US Gulf of Mexico crude oil still shut in from Ida as of Sept. 2, energy analysts said that supplies from the SPR may help get oil refineries running more quickly once they have their power restored.

More than 2 million b/d of oil refining capacity was shuttered ahead of Ida, and only ExxonMobil's 517,700 b/d Baton Rouge Refinery is restarting thus far.

Continued widespread power outages and damages to onshore facilities have been slowing the return process for refineries and offshore producers.

About 65% of fueling stations in the New Orleans and Baton Rouge areas were without gasoline early Sept. 2, said Patrick DeHaan, fuel analyst as GasBuddy.com.

Previously, the US Environmental Protection Agency had issued fuel standard waivers for Louisiana and Mississippi to increase supplies.

Biden also said he directed the US Department of Defense to provide satellite imagery services and the use of aerial drones to assist with damage assessments in Louisiana, including for the state's sizable energy infrastructure.