DOE eyes methods to improve Northeast US energy supplies

US Energy Sec. Bill Richardson Thursday announced 14 steps the government could take to improve energy supplies in the Northeast US. The recommendations were in a DOE study prompted by a home heating oil price jump in the region last winter.


Washington, DC�US Energy Sec. Bill Richardson Thursday announced 14 steps the government could take to improve energy supplies in the Northeast US. The recommendations were in a DOE study prompted by a home heating oil price jump in the region last winter.

The Northeast market accounts for nearly 75% of the nation�s home heating oil consumption.

Last week President Bill Clinton implemented one of the study�s recommendations�creation of a Northeast home heating oil reserve.

Richardson said, �We need to address this situation now, when the demand for heating oil is lower and we can prepare for next winter. We don�t want to find ourselves in another cold winter season with low heating oil inventories and dramatic price increases. Consumers and small business owners shouldn�t have to endure that.�

The study concluded last winter�s problems in the Northeast heating fuels market resulted from several events, including rapidly rising world oil prices, lower-than-normal distillate inventories, adverse weather, and natural gas pipeline capacity constraints. It said those factors, when added to the region�s dependence on distillate and tight worldwide oil supplies, led to price spikes and heating oil shortages.

Suggestions
DOE said the study�s recommendations would help avoid a reoccurrence, although �many of the relevant decisions affecting energy supply and consumption are the responsibilities of state and local governments.�

In addition to establishing a Northeast distillate stockpile, the report urged DOE�s Office of Energy Emergencies to coordinate emergency responses and improve communications with states and industry. It said DOE should improve seasonal supply data and forecasts for the Northeast energy market and encourage all market participants to improve supply planning. It also said the US should study the need for additional port dredging in the Northeast so petroleum products could be moved more easily.

On natural gas, it said the government should reduce permitting delays for Northeast pipeline and storage capacity, evaluate gas storage opportunities, consider changing the tax treatment of conversion and hookup costs, facilitate increases in LNG infrastructure and supplies, and develop alternative energy supplies for large gas users.

It said DOE should seek options to reduce or convert heating oil use at federal buildings in the region and promote construction and weatherization programs that would reduce fuel use. And it recommended creation of an interagency working group on natural gas supplies and that DOE resume annual meetings with Canadian energy officials.

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