US to create million-barrel fuel reserve
Washington, May 4, 2014
The US government will create a million-barrel petrol reserve in the Northeast, a reaction to the aftermath of Superstorm Sandy in 2012 when motorists were left without fuel, exposing vulnerabilities in the fuel distribution network.
The Energy Department said that two sites will each store 500,000 barrels of petrol by late summer, one near New York Harbour and one in the New England region.
It said the $200 million emergency reserve would complement an existing heating oil stockpile, which holds a million barrels of diesel fuel.
The department will lease space from commercial storage companies for the emergency stockpile, but it will have to buy the petrol because it does not currently have reserves of the fuel.
"This is part of a broader commitment to a more secure and resilient energy infrastructure," said Energy Secretary Ernest Moniz on a conference call.
With the Northeast consuming more than a million barrels of petrol a day, the reserve would be aimed at providing some short-term relief for consumers and first responders after major disasters.
Refiners complained they were left out of the decision to create the new reserve.
"Since the decision ... was made with no input from the industry, we question whether due consideration was given to how the petrol reserve will be filled, managed, and dispersed," said American Fuel and Petrochemical Manufacturers president Charles Drevna.
The group urged the department to consult with the industry as it establishes the stockpile.
One issue the reserve will not be able to address is how to overcome the electricity outages such as those caused by Sandy that shuttered gas stations.-Reuters