Peak Oil Crisis: Minimum Operating Levels Redux

Last spring, when U.S. gasoline stockpiles were falling like a brick, there was much concern about shortages during the summer driving season. The average price for gasoline in the U.S. rose to $3.22 per gallon and in some parts of the country over $4. Our aged refineries were huffing and puffing to increase gasoline output enough to meet demand which was approaching record highs.

But then something wonderful happened. Great ships appeared on the horizon, attracted by the record high U.S. gasoline prices, and soon there was enough gasoline so that we could all have a mobile summer. Those of us who worry about the possibility of oil and gasoline shortages forgot about U.S. stockpiles for awhile and went back to puzzling over OPEC pronouncements, Venezuela, Nigeria, Mexico and a dozen other topics that affect our oil supplies.


Late in May, however, before the gasoline bearing tankers started arriving in larger numbers, I wrote a column about the minimum operating level (MOL) for gasoline in the U.S. You may recall that the MOL is the amount of gasoline we have in inventory that is in transit and not readily available. It may be in a pipeline coming up from Louisiana, on a barge being towed along the coast or still at the refinery waiting to be shipped.

You may even recall that the U.S. Department of Energy used to publish a number for the minimum operating level, but then stopped on the grounds they were not sure exactly what the correct number was. There certainly was no need to scare people by suggesting we were getting close to the bottom of our national gasoline tank. Last May, however, an inveterate researcher discovered the number in a musty old DOE publication from 2004 and it turned out to be 185 million barrels.

Falls Church News-Press