Why does the northeast use heating oil

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The timing of the plan corresponded with the expiration of the heating oil storage contracts at the end of September and recent actions taken by the State of New York and other Northeastern States to implement more stringent fuel standards that require replacement of high sulfur heating oil to the cleaner burning distillate.

DOE conducted a competitive online sale for the new initiative, first offering approximately 1 million barrels of heating oil from the Hess First Reserve Terminal in Perth Amboy, New Jersey.

Contracts were awarded to three companies for , barrels. DOE conducted a second online sale, offering an additional 1 million barrels of heating oil from terminals located in Groton and New Haven, Conn. The solicitation requested bids for storage of two milllion barrels of ULSD.

Contracts were awarded to Hess Corporation in Groton, Conn. No heating oil reserve stocks would be stored in New York Harbor because the area has abundant commercial stocks, connections to local refineries, and a major pipeline for resupply.

As such, it was exempt from taxation under Section c of the Internal Revenue Code of NORA fell into a category of federally authorized programs known as check-off programs. To fund check-off programs, a fraction of the wholesale cost of a product is set aside by the producer and deposited into a common fund to be used to benefit producers and consumers.

NORA actually ceased operation at the end of , more than a year beyond its sunset date, while it disbursed remaining funds. Although Title VII, Section Referenda , paragraph c — Termination or Suspension authorized NORA to hold a referendum to determine whether the oilheat industry favored termination or suspension of the alliance, there is no indication of industry interest in doing so. The Agricultural Act of P. NORA announced that it is resuming full operations, and began collecting fees as of April 1, Section Functions authorized NORA to develop programs and projects, and enter into contracts to implement programs for.

Section specifically excluded advertising or promotions, and research on oilheat equipment that had already been verified as technically feasible. Table B-1 summarizes NORA's assessed fees and other generated income during the years it operated through See Figure B Table B Figure B NORA's research and development activities were generally consistent with strategic goals, but because NORA's strategic plan lacked goals for its consumer education, education and training, and oil tank programs, GAO could not determine if these activities achieved desired results.

These are summarized in Table B Activities were efficiently coordinated with Brookhaven National Laboratory Dept. No apparent support for advertising, promotions, or consumer surveys in support of advertising or promotions. No research, development and demonstration support for oilheat utilization equipment already determined technically feasible. Program expenses allocated to education and training; research, development, and demonstration; and consumer education.

GAO also identified issues regarding NORA's or its qualified state associations' activities under seven other legislative requirements or priorities of the Oilheat Act.

The issues are summarized in Table B Having the required minimum number 23 of states represented on the NORA council; at the commencement of review, only 20 states were represented; 3 states were subsequently added. Promulgation of formal policies and procedures for auditing compliance with the Oilheat Act—NORA has no formal procedures for auditing compliance per se.

Activities involving Congress or politically affiliated entities—NORA state association posted letter directed toward supporting oilheat-related legislation. With specific regard to the Oilheat Act's lobbying prohibitions of Section , restrictions prohibited NORA from using Section assessments to influence legislation or elections. As such, it is not clear whether or not the Propane Act's or the Oilheat Act's prohibitions cover those types of activities.

A number of factors may have contributed to the near doubling of heating oil prices in some Northeastern states during the winter of , but the most significant may have been the sharply lower storage levels of middle distillate stocks the range of home heating oil and diesel fuels at the time.

The region continues to rely on heating oil as a source of home heating, but at a sharply reduced level. Alternative heating fuels may be responsible for reducing the dependency, as may improvements in home heating and insulation. Heating oil prices continue to remain high, as do other petroleum products and the price of crude oil, which may be discouraging use.

As a 2 million barrel emergency stockpile of government-owned heating oil, NHHOR was intended to meet roughly 10 days of demand by the Northeastern states at the time it was created. The NHHOR mission is to supplement commercial fuel supplies should the region either anticipate or experience a severe disruption to normal supplies. The Energy Act authorized the Secretary of Energy to draw down or sell NHHOR heating oil when a presidential determination is made that there is a severe energy supply interruption, either due to a "dislocation in the heating oil market," or a "regional supply shortage of significant scope and duration.

The Energy Secretary can offer NHHOR oil through a competitive bid process, or exchange it through an agreement that replaces the original volume with an added volume as repayment premium. The act's language was cause for controversy. Opponents of establishing a regional oil reserve argued that its use might be inappropriate, and the potential availability of the reserve could be a disincentive to private suppliers to maintain their inventories at sufficient levels.

The intent of defining a dislocation was to make the threshold for use of the regional reserve high enough so that it would not discourage oil marketers and distributors from building up heating oil stocks. The President could also authorize a release of the NHHOR in the event that a "circumstance exists other than the defined dislocation that is a regional supply shortage of significant scope and duration, the adverse impacts of which would be 'significantly' reduced by use of the NHHOR.

However, this was due to a sharp decline in crude prices rather than to a rise in home heating oil prices. In fact, home heating oil prices were drifting slightly lower during the same reporting period.

A general strike in Venezuela that began in late resulted, for a time, in a loss of as much as 1. With refinery use lower than usual because of less crude reaching the United States, domestic markets for home heating oil had to rely on refined product inventories to meet demand during a particularly cold winter. Prices rose, and there were calls for use of the NHHOR; still, the price of heating oil fell significantly short of meeting the guidelines for a drawdown. The Reserve's current five-year storage contract for the Providence, RI, storage location was to expire September 30, , and market conditions had caused new storage costs to rise to a level that exceeded available funds.

Revenue from the sale was used to supplement funds for the award of new long-term storage contracts that began October 1, The sale of heating oil from the Reserve's site commenced June 13, , using an interactive online bidding system, and bidding closed on June During February , DOE conducted a turnover of the roughly 2-million-barrel Northeast Home Heating Oil Reserve for the purpose of converting its high sulfur 2, parts per million stocks to cleaner-burning ultra-low sulfur distillate 15 parts per million.

In late October , Superstorm Sandy struck the Northeast, Mid-Atlantic, and the Great Lakes region with devastating winds, rain, snow, and tidal surges. President Obama responded by declaring that the storm had created a severe energy supply interruption and directed the Department of Energy to transfer emergency fuel from the Reserve to the Department of Defense DOD for its use in emergency operations and support for those in the region affected by the storm.

At the time, transportation fuel was in short supply. Although designated a heating fuel, it may have served as a transportation fuel for DOD diesel-fueled vehicles providing logistical support for hurricane relief efforts, or as a heating fuel for relief centers. In total, the Reserve released over , barrels more than 5 million gallons of fuel to support emergency relief efforts. Sandy and the subsequent snowstorm marked the first time that emergency withdrawals were made from the NHHOR.

The amendment did not include any provision for the type of contingency that arose after Sandy, however. The lack of natural gas distribution infrastructure has helped contribute to the continuing domination of oil heat as the energy source of choice in the Northeast. For reliable home heating oil deliveries at the lowest prices available, call Tragar Express. We provide fast, courteous service to our customers. Orders placed before 10 AM can be delivered on the same day. In addition, we offer a full range of professional repair and upgrade services for oil heat and gas heat systems.

Our parent company, Tragar, has been serving Nassau County and Suffolk County residents for over 60 years with our guaranteed 5-star customer service. For information about heating system upgrades or to schedule a COD oil delivery, call Tragar Express today at , or you can email us at info tragarexpress.

Category : Home Heating Facts.