DOE to Lend Up to 315,000 Barrels From Northeast Heating Oil Reserve
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The federal government is lending out heating oil from its Northeast reserve ahead of winter.
The U.S. Department of Energy announced on Oct. 21 that it is seeking bids for an exchange of up to 315,000 barrels of ultra-low sulfur distillate, which it calls fuel oil, from the Northeast Home Heating Oil Reserve. DOE says the exchange is meant to ease supply chain problems that are disrupting fuel oil supply.
How the exchange works
This is a loan, not a sale. Under the terms, companies that borrow the fuel must return the same volume plus a premium. DOE says that will make sure the reserve is refilled ahead of the 2027-2028 heating season.
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According to DOE:
- The fuel will come from reserve storage sites in South Portland, Maine; Boston, Massachusetts; and New Haven, Connecticut.
- The minimum offer is 25,000 barrels, and offers may not exceed 30,000 barrels. Companies may submit multiple offers.
- No more than 150,000 barrels will be available from any one site.
- Bids are due by 11 a.m. Central time on Tuesday, Oct. 27.
- Fuel transfers or deliveries are scheduled to be finished by Nov. 13.
DOE says the approach lets both fuel retailers and terminal holders bid, so product can flow into areas facing fuel shortages.
What the Energy Secretary said
Energy Secretary Chris Wright said he directed the exchange after receiving a letter from Sens. Collins and King and holding extensive discussions with Collins.
"Of course, this is a temporary measure to solve a temporary supply disruption," Wright said in the announcement. He also urged the governors of New York and New England to work with the administration to build the Constitution Pipeline and replace home heating oil with natural gas.
A question for readers
Fuel haulers in New England, are you seeing more heating oil work this fall, and do you expect this reserve fuel to make your winter busier?
Share your thoughts on our Facebook page.
Sources
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