The US Northeast Home Heating Oil Reserve (NHHOR), a 2 million bbl reserve of government-owned heating oil for emergencies, has been created.
US Energy Sec. Spencer Abraham on Mar. 6 signed letters to Congress that formally established the reserve.
Sec. Abraham said, "The reserve was established as an insurance policy against supply, inventory, and delivery problems in the wake of last winter's extreme weather that pounded the Northeast."
The reserve will help families and small business owners in times of crisis that affect heating oil supply and distribution, he added.
President George W. Bush supports creation of the reserve, and he has proposed $8 million in funding for NHHOR. Under Abraham's plan, Bush has authority over the use of the reserve.
How it works
Like the Strategic Petroleum Reserve, specific requirements and rules govern use of NHHOR. The SPR was established in the 1970s to provide crude supplies for use in emergencies.
An equivalent of 1 million bbl of heating oil is stored in New York Harbor, and 1 million bbl is stored in New Haven, Conn.
Amerada Hess Corp., Morgan Stanley Capital Group, and Equiva Trading Co. have agreed to store the oil at their terminals and manage delivery in case of an approved use of the reserve.
States falling under the heating oil reserve's coverage are New York, Connecticut, Maine, New Hampshire, Rhode Island, Vermont, Massachusetts, Pennsylvania, and New Jersey.
