By Timothy Gardner
WASHINGTON (Reuters) - The U.S. Energy Department said on Thursday it would release a second batch of oil from the Strategic Petroleum Reserve totaling 1 million barrels as Tropical Storm Harvey's disruption of the petroleum industry has spiked motor fuel prices.
The oil will be delivered to the Phillips 66 refinery in Lake Charles, Louisiana, a department statement said. That refinery has not been affected by the storm, which has hammered the Gulf Coast for several days.
In the first tapping of the reserve for an emergency since 2012, 400,000 barrels of sweet crude and 600,000 barrels of sour crude oil will be sent via pipeline to the refinery.
The releases, the first of which was announced on Thursday morning, were exchange agreements, meaning the government will loan crude to Phillips 66, which is required to replace the oil at a later date.
The SPR, established in the early 1970s after the Arab oil embargo caused panics over fuel supply, currently contains 679 million barrels of oil. It is a small release of crude for a country that uses nearly 20 million barrels of petroleum daily.
Harvey shut down about a quarter of the country's refining output after it lashed Houston with record floods before it spread to the Louisiana coast, another refining hub.
U.S. gasoline prices surged anew in morning trade after the Colonial Pipeline Co, which operates the biggest U.S. fuel transport system, said it would shut its main lines to the Northeast amid outages at pumping points and lack of supply from refiners.
The Energy Department "will continue to provide assistance as deemed necessary, and will continue to review incoming requests for SPR crude oil," spokeswoman Jess Szymanski said.
Senator Edward Markey, a Democrat, urged the department this week to also release gasoline from the country's emergency gasoline reserve, which holds a total of 1 million barrels of oil in three locations in the Northeast: New York Harbor, Boston and Maine.
(Editing by Bernadette Baum)
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