President Clinton Directs Department of Energy to Establish a Home Heating Oil Reserve (7/10/00)
       President Clinton Directs Department of Energy to Establish A
  Home Heating Oil Reserve in the Northeast to Protect Against Shortages
                               July 10, 2000

President Clinton today directed Secretary of Energy Bill Richardson to
establish a home heating oil reserve in the Northeast.  The regional
heating oil is intended to reduce the risks presented by home heating oil
shortages, such as the one that occurred last winter.  He also renewed his
call for Congress to reauthorize the Energy Policy and Conservation Act,
which authorizes operation of the Strategic Petroleum Reserve (SPR), and to
authorize the establishment and operation of a permanent heating oil
reserve in the Northeast with appropriate criteria for its use.  These, and
other important steps such as the Federal Trade Commission investigation of
gasoline prices in the Midwest, are critical steps towards reducing energy
costs for American families and businesses.  The President also called on
Congress, once again, to enact key parts of his comprehensive energy
strategy, including his energy tax and investment packages and
comprehensive electricity restructuring legislation.

President Clinton is Acting Now to Establish this Reserve So That Heating
Oil Is in Place Before Winter: Since March 18th, President Clinton has
repeatedly called on Congress to authorize the creation of a home heating
oil reserve in the Northeast with a trigger designed to address possible
supply shortages in the region.  Despite the President's concern about
protecting the citizens of the region from possible heating oil shortages,
Congress has not yet authorized the creation of a heating oil reserve with
an appropriate trigger.  Therefore, in order to reduce the risk of heating
oil supply shortages next winter, President Clinton is directing Secretary
Richardson to take concrete steps under current law to store heating oil in
the Northeast so that oil can be in place as soon as possible.

Department of Energy to Begin Process of Obtaining 2 Million Barrels of
Home Heating Oil to Store in the Northeast: DOE will take two steps towards
the establishment of a permanent Northeast heating oil reserve.
- First, using existing legal authority, DOE will initiate an exchange of
crude oil from the Strategic Petroleum Reserve (SPR) for 2 million barrels
of home heating oil stocks and interim storage facilities in the Northeast.
By beginning the process under current law of obtaining home heating oil
for storage in interim facilities, the Department will avoid a 60 day delay
required to amend the SPR Plan (the operating guidelines for the SPR) to
allow for the permanent establishment of home heating oil reserve.
- Second, Secretary Richardson will submit to Congress an amendment to the
SPR Plan allowing for the permanent establishment of a 2 million barrel
reserve of home heating oil in the Northeast.  The Plan amendment will
become effective after 60 days.
The Secretary currently has the legal authority to obtain both crude oil
and refined product for the reserve, and to store these products in interim
storage facilities as he deems appropriate.  Once the SPR plan amendment
becomes effective, the Department will be authorized to store home heating
oil in the Northeast on a permanent basis instead of the interim basis
permitted under current law and the current SPR plan, as amended.

Department of Energy Will Obtain Heating Oil Through Exchange of SPR Crude
Oil: DOE will use existing authority to obtain heating oil to store in the
Northeast.  Specifically,
- DOE, through an agent, will solicit offers from the private sector to
exchange crude oil from the SPR for to 2 million barrels of heating oil,
transportation, and the necessary interim storage facilities.
- Companies wanting to participate in the exchange must provide and
transport the heating oil to the Northeast, and have stocks in place in
October or as soon thereafter as possible.
- Contracts will be awarded to those companies that offer the best exchange
value for the SPR crude oil.
President Calls on Congress to Permanently Establish a Home Heating Oil
Reserve and to Enact Other Key Parts of His Energy Policy: President
Clinton directed this action to ensure that the home heating oil stocks are
in place before winter.  He renewed his call for Congress to authorize
permanently a home heating oil reserve with an appropriate trigger, because
even after the SPR plan amendment takes effect, the release of heating oil
will remain governed by current law.  The President believes, however, that
a permanent home heating oil reserve in the Northeast needs a trigger for
its use that is more appropriate to possible regional shortages than
current law permits.  Congress must also pass the President's energy tax
package and budget initiatives, which would help families and businesses
buy fuel-saving cars, energy efficient homes, buildings, and appliances,
would accelerate the research and development of cleaner, more efficient
energy technology and his comprehensive electricity restructuring
legislation, in order to ensure that America has a secure energy future for
the 21st century.


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