President Bush on Tuesday
ordered the nation's emergency stockpile of oil boosted to its capacity of
700 million barrels to provide a bigger cushion against a disruption in crude
supplies, especially imports from the volatile Middle East. The announcement
came as OPEC oil ministers are scheduled to meet Wednesday to decide how much
the cartel should cut from its current production to prop up crude prices
that have plummeted about 25 percent since Sept. 11.
The White House plan
would boost new supplies in the Strategic Petroleum Reserve by 108 million
barrels, on top of 47 million barrels already scheduled for delivery to the
reserve by energy firms over the next 14 months. The stockpile currently holds
about 545 million barrels.
The United States imports
about 60 percent of its oil to meet daily consumption of about 20 million
barrels. One out of every four imported barrels comes from the Middle East.
However, the White House plan does not call for the U.S. government to purchase
oil in the open market, which would fill up the reserve at a much faster rate.
Instead, the government will reportedly boost the stockpile with so-called
royalty-in-kind oil from energy companies that will turn over a portion of
the crude they drill on federal leases.
The Energy and Interior
departments will work out the procedures for adding new oil to the reserve,
which will start in April at a rate of about 60,000 barrels per day (bpd).
That rate will double to about 130,000 bpd by October 2002, filling the reserve