WASHINGTON – The federal government is releasing thousands of barrels of oil from the nation's emergency reserve as refineries and pipelines work to get back online after Hurricane Ike battered the Gulf Coast and sent gas prices over $5 per gallon in some areas.
The Department of Energy on Sunday was delivering 500,000 barrels of oil to Marathon petroleum Company from the Strategic Petroleum Reserve, 200,000 barrels to ConocoPhillips and 239,000 barrels to Placid Oil/Shell refineries. The department announced that deliveries were approved because of the impact of Hurricanes Gustav and Ike.
Ike shut down 14 Texas refineries with a total capacity of 3.8 million barrels of crude a day. President Bush said the Plantation pipeline coming out of the Gulf Coast is running and a second pipeline is being worked on so that it can return to use as soon as possible.
Texas Sen. Kay Bailey Hutchison said refineries "are pretty much down" in her state and the country is likely looking at "another week or maybe eight or nine days" before oil and gas refineries are up and running.
"The refined gasoline is going to be in a shortage situation because of the power outages and the flooding," Hutchison told CBS' "Face the Nation." "So I think it is going to be felt for the next week, that we will have gasoline shortages. And people need to be prepared for that."
More than 1.2 million people evacuated the Texas coast before Ike hit land on Saturday. Tens of thousands of homes were flooded in Louisiana. The storm surge crawled 30 miles inland in some parts of that state. .
Four deaths were reported in Louisiana and Texas. Ike had turned into a tropical storm by late Saturday, but rescue crews still searched neighborhoods in Galveston, Texas, where 140,000 residents stayed behind to watch their homes flattened, power out and debris strewn. More than 160 people were rescued near Port Charles, La.
Bush said the Federal Emergency Management Agency was providing 1.5 million liters of water and 1 million meals a day to help those who got out of the storm's path and were in shelters across Texas.
Ike was the first major storm to directly hit a major U.S. metropolitan area since Hurricane Katrina devastated New Orleans in 2005. Reports from Tallahassee, Fla., say that gas prices had reached as much as $5.50 per gallon. In Knoxville, Tenn., gas prices reached $4.99 per gallon. Geoff Sundstrom, AAA's fuel price analyst in Orlando, Fla., said Ike has disrupted supply at the wholesale level in the Gulf Coast, where prices struck $4.85 a gallon Friday.
Elsewhere in parts of the country untouched by the storm, prices had also skyrocketed. In Cleveland's suburbs, prices jumped 24 cents within the week to $3.79. Chicago area stations were charging $4.50.
Gasoline prices on the open market had dropped briefly below $100 per barrel before closing higher on Friday. That drop had been the lowest prices reached since April. But analysts warned that prices domestically will probably spike nationwide to its all-time high of more than $4-per-gallon, reached over the summer when oil prices neared $150 a barrel.
Bush repeated Sunday his pledge of a day earlier that the federal government will do all it can to prevent consumers from being abused by unscrupulous producers.
"The federal government, along with state governments, will be monitoring very carefully as to whether or not consumers are being mistreated at the pump -- in other words, gouged. It's very important for our fellow citizens during the period of temporary disruption to be treated fairly," Bush said.
The president said that as a result of the storms, the Environmental Protection Agency and department of Energy agreed to suspend reformulated gasoline rules to make it easier to accept gas imports from abroad "so as to take pressure off of our consumers."
Locally, the utilities companies were working to restore power to more than 3 million homes, a task that could take weeks. Bush said he was impressed that some parts of Houston had already seen their power returned by late Saturday.
"I do want to thank the utility companies for working hard to get electricity up. And to the extent that you need help stringing lines, I'm confident other utility companies from around the country will help provide manpower," he said.
The Associated Press contributed to this report.