Financial experts and energy gurus are collectively biting their nails right now alongside those suffering most from Hurricane Harvey. The reason? An estimated one-fourth of the nation’s oil refineries are located in the state of Texas or in the Gulf of Mexico area and could be imperiled by the recent floods afflicting Texas.
Texas citizens affected most heavily by the hurricane are in immediate need of shelter, food, and water. Fuel is also a concern. Gasoline shortages have transcended the theoretical to become a daily reality for many impacted by Hurricane Harvey. Fortunately, though, the Trump administration and the U.S. Department of Energy spearheaded by former Texas Governor Rick Perry have numerous ways of combating the shortfall in oil refineries and subsequent fuel shortages.
The United States has what’s known as a strategic petroleum reserve, a rainy-day cache of fuel designed to cover just these kinds of calamities. President Trump received bipartisan nods of approval as he authorized one million gallons of oil from this stockpile to go to Hurricane Harvey helpers and victims.
The larger markets, of course, still respond to the law of supply and demand, so even though oil prices are at a relative low point right now a dearth of oil could mean rising prices. Trump could respond to these broader challenges by saturating the market temporarily with oil from the strategic petroleum reserve.
Energy experts are still worried that the available oil in the strategic petroleum reserve is too scant to deal with the knocked-out refineries’ impact on oil prices over the long term. Those experts are probably right. In this emergency situation Trump could try doing what Obama did after Hurricane Sandy and permitting oil-carrying ships the chance to operate without a full crew. This alone would mean more ships could operate more economically.
In a more ethically dubious direction President Trump could decide to purposely flout the Environmental Protection Agency’s rules on using lower volatility oil in the late summer months. By doing so President Trump could bring more oil refineries into play and increase the supply of available oil, thus lowering the price of fuel.
Others hope for a spate of large oil tankers promised to be on their way from Europe in response to the devastation of Hurricane Harvey. The final solution will likely come from all of these solutions together: culling oil from the reserve, easing restrictions, and European intervention.