Share this story
Close X
Switch to Desktop Site

Why not regional oil reserves?

New England should have a regional petroleum reserve system for a number of valid reasons. First, along the East Coast (New England in particular) residual oil imports average between 50 and 60 percent. The existing law provides for the establishment of a national strategic petroleum reserve (SPR), and New England qualifies for a regional storage system.

The provision of the law has not been implemented. If you look at the New England area alone, where imports range as high as 90 percent - the dependence upon imported petroleum is displayed even more dramatically.

About these ads

Second, any oil shortage brought about by interruption of these imports would have a devastating effect upon the six-state region. The region's electrical power generation systems and its industrial production facilities rely heavily on imported residual fuels. Loss of those sources (largely from the Middle East) would result in further widespread unemployment, increased probability of power outages, and chaotic economic dislocation.

Third, while the national SPR is there for all to rely upon in the event of need, we deserve incontrovertible evidence that we can draw down on that reserve , that we can refine it, transport it, and relocate it in the product form we need, and that we can do this in the necessarily short period of time we would have to work with between disruption and cutoff of our supplies from other sources.

There are no provisions to get the crude oil we have in the SPR out of the reserve in any emergency. The best estimate seen to date is that it might take upward of 45 days to get SPR oil to New England, since it is stored in salt dome areas along the Louisiana-Texas Gulf Coast.

Regional storage - ''closer to home'' if you will - makes sense.

There is nothing new or novel about this proposal.

In his energy message of April 1979, President Carter recommended establishment of a regional petroleum storage system, noting that ''the central storage of crude oil in the Gulf Coast area should provide protection for all Americans, but due to excessive transportation problems and pronounced dependence on imported petroleum products, more localized storage of both crude oil and petroleum products can be justified for the Northeast.''

A 1982 report prepared at my request by the Congressional Research Service (CRS) examined the potential devastating effects of national energy shortages, and concluded that the Northeast was particularly vulnerable to shortages despite all earlier steps taken to provide for alternative systems. In updating the 1982 report this past month CRS again concluded that the Northeast ''continues to be critically dependent upon outside sources of crude and petroleum products, and would be particularly vulnerable during a supply disruption.''

About these ads

New England is sometimes characterized as a two-season region - July and winter. While that is not completely true, it is true that winter often comes early and stays late.

Moreover, it is the season when we sometimes feel a deep sense of anxiety - especially when you call your oil dealer and ask for another 200 to 300 gallons of heating oil and he tells you he can't fill that order because his stocks are low. It happens that way now and then, and the elimination of that condition underscores the reasoning behind creating a regional reserve.

What would such a reserve possibly contain?

* 10 million bbls. of residual fuel oil for the Northeast.

* 10 million bbls. of fuel oil in Gulf Coast storage sites for use in the Northeast.

The Reagan administration does not appear to be disposed to accelerate construction of permanent SPR facilities (even along the Gulf Coast) much less undertake or support the regionalization of the SPR.

Their argument is classic in form: The effect of additional outlays on the budget outweighs the national security advantages of accelerating SPR fill by a few years.

This, coupled to their message that the private sector will assume a share of the cost and the responsibility for emergency preparedness (rent-a-crisis) suggests only one thing: Regionalization of the SPR will, for the foreseeable future, require a congressional initiative.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.