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Washington, DC - The U.S. Department of Energy (DOE) today announced that new contracts have been awarded for commercial storage of 650,000 barrels of ultra low sulfur distillate (ULSD) for the Northeast Home Heating Oil Reserve (NEHHOR). Awards were made to two companies for storage in New England--Hess Corporation in Groton, CT for 400,000 barrels, and Global Companies LLC in Revere, MA for 250,000 barrels.
The procurement was conducted by the Defense Logistics Agency (DLA Energy), acting as the agent for DOE. Acquisition of storage services for an additional 350,000 barrels is planned to complete the establishment of a one million barrel Reserve.
The Northeast Home Heating Oil Reserve was authorized by Congress in the Energy Policy Act of 2000 as an emergency stockpile of up to two million barrels of Government-owned heating oil for the Northeastern States. Through February 2011, the NEHHOR held a total of two million barrels in both New England and New York Harbor. At the end of the winter heating season, DOE announced a competitive sale of the NEHHOR stocks for the purpose of replacing them with cleaner burning ULSD prior to the 2011-2012 heating season. The conversion was conducted in order to comply in advance of new mandates being phased in by several Northeastern states for more stringent fuel standards that will require replacement of high sulfur (2000 parts per million) heating oil with ULSD (15 parts per million).
Establishment of a one million barrel NEHHOR is consistent with the President’s 2012 budget request and will provide supplemental supplies to New England, the area most vulnerable to a supply disruption. DOE does not plan to reestablish a NEHHOR facility in the New York Harbor area because it has abundant commercial stocks and connections to local refineries and a major pipeline for resupply.