DOE authorizes Strategic Petroleum Reserve exchange to support Louisiana supply

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The U.S. Department of Energy has authorized an emergency exchange from the Strategic Petroleum Reserve with ExxonMobil Corporation to address "logistical challenges" impacting crude oil deliveries at its Baton Rouge refinery.

The DOE SPR emergency exchange is the latest of several in the last few decades where SPR reserves played a vital role in response to natural disasters or other incidents.

The DOE authorized up to one million barrels of crude oil to be released from the SPR to support ExxonMobil’s restoration of refinery operations that were reduced because of "an offshore supply disruption," it said. ExxonMobil will return the borrowed crude, as well as additional barrels of crude oil, to the SPR at no cost to the taxpayer, the DOE said.

ExxonMobile requested the exchange because of quality issues with Mars crude from its offshore rigs, including contaminated crude with high levels of zinc, Bloomberg News reported. Because high levels of zinc can damage refinery equipment, the refinery couldn’t use it and was attempting to resell it in the spot market, Bloomberg reported. ExxonMobile hasn’t released a statement on the exchange request, according to its website.

"An oil supply disruption has led to reduced operations at the Baton Rouge refinery, limiting production of transportation fuels," DOE said. "The exchange is intended to ensure the maximum supply of refined fuel products in the Gulf Coast region while ExxonMobil resolves logistical challenges."

One of the largest refining and petrochemical complexes in the world, Exxon Mobile’s Baton Rouge refinery processes roughly 520,000 barrels a day and manufactures roughly 300 products, including "motor gasoline, diesel, aviation gasoline, lubricating oils, waxes, petroleum coke, liquefied petroleum gas and chemical feedstock," according to its website.

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