The 150,000 barrels of reserve home-heating oil scheduled to reach the Port of Providence next month might not do much to quell concerns over the state’s lack of supply, according to an industry spokesman.
The U.S. Department of Energy approved the transfer of the supplies from a 500,000-barrel reserve in New Haven, Conn. U.S. Energy Secretary Spencer Abraham made the announcement at the National Governors Association Conference in Providence earlier this month.
The supply to be stored in Providence — which eventually could increase to 250,000 barrels — is part of the federal government’s 2 million-barrel Northeast Home Heating Oil Reserve. It will be used in case supplies are disrupted, according to the DOE.
Last fall, the federal government set up an “emergency buffer” for the Northeast by contracting with private companies to store reserves in New Haven, Conn. and Woodbridge, N.J.
The decision was made to move at least some of those reserves to Providence because it gives the reserve program a third geographic location to distribute heating oil in case of an emergency. Gov. Lincoln Almond’s office, as well as other New England governors and Rhode Island’s Congressional delegation, pushed for the transfer of supplies to Providence.
“It extends our distribution capabilities into the Boston area and gives us additional truck and marine loading options,” Abraham said of the Providence supply.
While the reserve is welcomed by Rhode Island’s home-heating oil industry, which came perilously close to running out of supplies in January 2000, industry officials would like more details about the reserve.
“I think it shows that (Abraham) and the governor are aware that we have a problem in Rhode Island as far as storage and bringing in product,” said Victor Allienello, chairman of the board of the Oil Heat Institute of Rhode Island.
“It’s great that they’re trying to address the problem, but there are a lot of unanswered questions,” Allienello said. “The time to answer them is in August and September, so you don’t have chaos in December or January if something goes wrong.”
The Oil Heat Institute for years has lamented both the lack of oil-storage capacity in Rhode Island and the difficulty in getting reserves into the Port of Providence.
Shipments are delivered by barge because large tankers can’t make their way through the shallow Providence River, which hasn’t been dredged in 30 years. But barges can’t deliver supplies in rough seas, which was the root cause of the shortage in 2000.
“The first part of the equation is that the 6.3 million-gallon reserve will be there,” Allienello said. “But what’s the determining factor to release this product?”
According to George Mason, Almond’s energy policy advisor, the federal government will make that call. Either President Bush or Abraham can authorize the release – probably triggered by low supplies in New England – and large oil companies would bid on the oil and sell supplies to their customers.
“To be honest, we don’t know exactly how it will work because it’s never been done,” Mason said. “But when the product is released for whatever reason, it’s going to benefit Rhode Island because companies here will have easy access by truck.”
A supply shortage can happen for a number of reasons, Mason said, but typically it is the result of a storm that prevents barges from reaching Providence. If seas are too rough for oil shipments to come in, logic follows that the 150,000 barrels of reserve capacity won’t be able to leave Providence by barge.
“It would only make sense for companies within a close drive to send in trucks,” Mason said.
