Kerry, Snowe, Dodd Legislation would Address Energy Crisis in Northeast
“Every expert in the world tells us that energy prices will keep
skyrocketing and that means a dire situation this winter for more than
six million households in Massachusetts and New England,” Senator Kerry
said. “Washington can’t just sit back and wait. We must be proactive.
Introducing legislation now that would release the home heating oil
reserve on a staggered basis is the least we can do to prepare before
the inevitable New England winter hits.”
“Maine and the
entire Northeast are in the most precarious winter heating situation in
a generation,” Senator Snowe said. “Mainers were tremendously burdened
by record high oil and gas prices last winter. With prices continuing
to escalate, that burden may be insurmountable this coming winter
unless Congress takes some kind of preemptive action to prepare for the
very worst. Currently, there are nearly 2 million gallons sitting in
the Northeast, and it would be derelict for the government to withhold
this vital heating source when the health and safety of our population
is at risk. I implore my colleagues to join with me and take action in
time so that this heating fuel may be utilized by the Northeast this
winter.”
“Connecticut and the rest of the Northeast
disproportionately depend on home heating oil to survive during long,
harsh winters,” said Dodd. “Not long ago, low and moderate income
families could struggle through the winter, but today, soaring heating
oil prices are forcing people to choose between heating their homes,
driving their cars to and from work, and putting food on the table for
their families. With prices continuing to rise, we must act now to
ensure that families in Connecticut and the Northeast remain safe and
warm when the snow starts to fall this winter.”
Currently,
under the Energy Policy and Conservation Act that established the
Northeast Home Heating Oil Reserve, the heating oil may only be
considered for release only if the price differential between crude oil
and No. 2 heating oil increases by more than 60% over its five year
rolling average for the months of mid-October through March. For
example, on March 17th, 2008, heating oil prices were at $3.87 in New
England. A barrel of oil cost $109.35, or $2.60 per gallon. The
differential between these two figures is $1.27. However, the five year
average differential is 93 cents, or 36 percent higher than the
historic differential. In order for the President to consider releasing
the heating oil the price of home heating oil would have needed to be
$4.10 cents the day when oil prices were $109 per barrel.
Senators Snowe and Dodd had proposed legislation in December to allow
the President the discretion to release the heating oil reserve if the
“health and safety of the region was at risk.” With the prospects of
$4.89 heating oil the health and safety of the region is indeed at
risk. Accordingly, Senators Snowe, Dodd, and Kerry have introduced
legislation that would sell the heating oil when heating oil is above
$4 per gallon and use the proceeds to weatherize homes that utilize
home heating oil.
Of the 8.0 million households in the
United States that use heating oil to heat their homes, 6.2 million
households or roughly 78 percent are located in the Northeast region of
the country. - making this area especially vulnerable to heating oil
prices. Heating prices in New England are currently is as high $4.65
per gallon, or $2 per gallon higher than last year.
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