[Congressional Record Volume 155, Number 12 (Wednesday, January 21, 2009)]
[Senate]
[Page S720]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Mr. Dodd, and Mr. Kerry):
  S. 283. A bill to amend the Energy Policy and Conservation Act to 
modify the conditions for the release of products from the Northeast 
Home Heating Oil Reserve Account, and for other purposes; to the 
Committee on Energy and Natural Resources.
  Ms. SNOWE. I rise today to speak on a bill I am introducing with my 
colleagues, Senators Dodd and Kerry, to improve the Northeast Home 
Heating Oil Reserve program to ensure that when our country experiences 
the next energy crisis we are better prepared. Specifically, I believe 
that this legislation will provide flexibility as well as certainty 
that heating oil currently sitting in New England will be used when it 
is most essential to the region's population.
  Through Senator Dodd's leadership in 2000, Congress created the 
Northeast Home Heating Oil Reserve, which put in place a critical tool 
to reduce supply disruptions. At that point, heating oil prices were 
$1.49 per gallon, and while the situation has improved since the price 
spikes this past summer, it is clear that the Northeast remains 
dangerously reliant on a commodity that has shown extreme volatility in 
recent years. The need for of the Heating Oil Reserve was clearly 
demonstrated this past summer when a catastrophe was emerging for our 
region with heating oil reaching the unprecedented level of $5 per 
gallon. Thankfully, the Northeast Home Heating Oil Reserve provided a 
basic level of assurance that heating oil could be provided if supplies 
were dramatically interrupted.
  However, the trigger mechanism for the release of the funds is 
convoluted to the point that the program's functionality is in 
question. Indeed, under the law, the President does not have the 
ability to release heating oil from the reserve even if the health and 
safety of the population is at risk. Rather, the current threshold for 
release is when the differential between crude oil and heating oil is 
60 percent higher than the 5 year average. As a result, neither the 
overall price of heating oil nor the plight of our constituents has any 
factor on the release of the reserve. The formula trigger in statute is 
flawed to the point that the actual trigger has come close to being met 
not when crude oil prices are rising, but actually falling. This is 
clearly not the intent of the reserve.
  The legislation that I am introducing with Senators Dodd and Kerry 
today streamlines the federal law to provide the President the 
discretion to release the reserve if the health and safety of the 
population is at risk. Furthermore, if heating oil prices are above $4 
per gallon during the critical winter months, the heating oil 
automatically will be distributed for sale. I believe this will 
dramatically improve the functionality of the reserve program and I 
look forward to working with Chairman Bingaman and Ranking Member 
Murkowski of the Energy Committee to enact this legislation.
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