U.S. Energy Security and the Next Energy Crisis
Energy Collective | John Miller | 7.16.12
The SPR can readily supply the Mid-continent and Southeast Coast via existing pipelines/inland barges. Northern and Rocky Mountain States oil imports come from Canada and are unaffected by OPEC imports. The areas at greatest risk to lost Persian Gulf imports are the Northeast and the West Coasts. The East and West Coasts could experience immediate losses of crude and petroleum oil supply of 2% and 14% respectively. As countries around the world compete for the remaining 80% of non-Persian Gulf crude supply, the East Coast will likely experience import losses much greater than the 2% of total supplies. Unfortunately the East and West Coasts cannot be reliably supplied from the SPR. The reason for SPR supply constraints to both Coasts is due to limited availability of marine tankers. The Jones Act requires all shipments made between U.S. ports must be carried in U.S. built, owned, registered and operated tankers. The cost of Jones Act shipping is much higher than average world market foreign flagged tankers, which has caused limited availability of U.S. flagged Jones Act tankers.