U.S. to store gasoline for crises in Northeast

5/1/2014

WASHINGTON — The federal government will build its first gasoline storage reserves in the New York Harbor area and in New England in response to the shortages suffered after Hurricane Sandy, the secretary of energy, Ernest J. Moniz, is to announce Friday.

Together, the reserves will hold about 1 million barrels of gasoline and cost about $215 million. The supplies are intended to be held back in case another disaster cripples regional fuel supplies.

Energy Department officials envision the reserves as the first in a series that will be built in parts of the country vulnerable to extreme weather, believed to be caused by global warming.

“In addition to our mitigation and international efforts, the president’s Climate Action Plan calls on us to take measures today in order to better prepare for the effects of climate change we already see occurring here at home,” Moniz said in a statement.

Fuel shortages were one of the most widespread problems after Hurricane Sandy in October 2012. Two New York-area fuel refineries were shut down, and hundreds of gas stations lost power, leading to severe gasoline shortages.

Some New York gas stations were without fuel for as long as 30 days. In addition, 25 of the region’s 127 fuel terminals — which hold gasoline, heating oil and diesel fuel supplies that are delivered by pipeline, ship or local refinery — were shut down. The Pentagon eventually delivered 24 million gallons of fuel to the storm-ravaged region.

“I remember those horrible days after Sandy, when people couldn’t get gasoline,” Sen. Charles E. Schumer, D-N.Y., said in an interview. “It was pouring salt in the wound. People needed food, heat; they needed the barest necessities. But the public transportation was knocked out. If you didn’t have gasoline for a car, you were shorn from the basic necessities. It prolonged the pain of Sandy for almost a month.”

Schumer said he had asked the Energy Department to look into ways to prevent such disruptions. “Repairing the old wasn’t good enough,” Schumer said. “You have to prepare for the future.”

The new regional storage reserves are modeled on a national one, an emergency supply of about 700 million barrels of crude oil stored in salt domes along the Gulf of Mexico. The federal government built those reserves after the 1973 Arab oil embargo, with the intent of tapping them in the case of a disruption to the nation’s oil supply. Presidents have ordered that those reserves be opened on three occasions: during the 1991 Persian Gulf War; after Hurricane Katrina in 2005; and in 2011 during the Arab Spring unrest in North Africa and the Middle East.

The government sold 5 million barrels of that oil; officials said the money from the sale would go toward building the regional gasoline reserves in the Northeast.

Administration officials said the challenges presented by climate change can make it hard to quickly move fuel to areas affected by weather — particularly since storms can severely damage oil pipelines and refineries.

A 2013 Energy Department report concluded that the nation’s energy supply system was vulnerable to increasingly severe and costly weather events driven by climate change.

It concluded that the blackouts and other energy disruptions caused by Hurricane Sandy were just a taste of what was to come, and said that every element of the nation’s energy infrastructure — oil wells, hydroelectric dams, nuclear power plants — would be threatened by intense storms, rising seas, higher temperatures and frequent droughts.