Government Regulation
was in chaos. State and federal government
emergency response efforts to keep the fuel
supply chain open were inadequate. Once
again, the federal government did not act
quickly enough to issue regulatory waivers
to ensure sufficient supply of fuel was avail-
able during Hurricane Sandy. NEFI worked
closely with FEMA, the EPA, U.S DOT,
IRS, state emergency authorities and state
association executives to secure the needed
waivers to ensure continued fuel distribu-
tion to stricken areas.
NEFI is working with all these groups
and PMAA to make the regulatory waiver
process more nimble and effective. Of
particular concern is the need for proactive
measures to ensure emergency generators
can be filled with higher sulfur heating oil
in place of ULSD in the run-up to a large
storm event. Waivers allowing heating oil
to be used on-road in emergency equipment
are also vital to relief efforts. Currently,
federal agencies have a reactive, piecemeal
approach to the waiver process, preferring
to assess the need for regulatory waivers
after the storm has hit when the need is
critical. The waiver process is burdened by
lack of coordination between federal agen-
cies and with state emergency responders.
NEFI is exploring ways to enhance the
state and federal waiver process so that
heating oil dealers can readily provide
heating oil as a substitute for ULSD in a
rapid, efficient manner. This effort includes
state waivers to make it easier for fuel to be
transported to stricken areas from regional
sources. NEFI intends to put together emer-
gency response guidelines and procedures for
state association executives to reference and
achieve a more coordinated federal response
that is quick, efficient and proactive.
NATURAL GAS ISSUES
Natural Gas Legislation –
State gov-
ernments throughout the Northeast have
begun writing legislation and regulations
to encourage the building of natural gas
pipelines or to incentivize conversions to
natural gas. Washington has also caught
“natural gas fever” despite the fact that gas
prices have doubled in the last year. Senate
Energy Chairman Ron Wyden (D-OR) held
a hearing on May 14th on ways to expand
natural gas production and infrastructure.
ISO New England was on-hand to
plead for greater access to natural gas for
New England power generators. Chairman
Wyden promised he would work with ISO as
he drafts new natural gas pipeline legislation
this summer. Wyden is also drafting legisla-
tion to revise the process of approving export
permits for natural gas. He is concerned that
exporting natural gas will cause processing
to surge, harm consumers and threaten
the resurgent U.S. manufacturing sector.
He has said he hopes to take up all natural
gas related legislation (including export,
pipeline and possibly natural gas transpor-
tation bills) this Fall. NEFI is monitoring
developments and will meet with committee
staff to discuss concerns.
New England Electric Utility Policy -
NEFI is monitoring electric and gas utility
industry policy meetings in order to predict
and respond to potential future impacts
on the heating oil industry. NEFI attended
the ISO New England and the New York
Independent System Operator 2013 Joint
NE/NY Energy Conference in Boston.
An ISO is an organization formed at the
direction of the Federal Energy Regulatory
Commission. ISOs coordinate, control and
monitor the operation of the electric power
system, within a single state or region. The
Boston meeting brought together leading
industry professionals and policy makers
for discussion on the current drivers of
change in the electric power industry, e.g.
keeping electric grid reliable and wholesale
markets fair and efficient.
NEFI’s concern is that the New England
and New York ISO are stepping up their lob-
bying efforts to bring natural gas pipeline to
New England. While there is no shortage
of natural gas in New England, electric
utilities want to leverage the cheapest prices
available, which they believe can only be
achieved through a new gas pipeline. NEFI
will continue to monitor and respond
accordingly to ISO moves in this direction.
Natural Gas Exports –
Last month,
the Energy Department approved a second
application to export natural gas, this time
from a facility along the Gulf Coast partly
owned by ConocoPhillips. The approval
came two years after DOE granted the first
national gas export license to Cheniere
Energy. NEFI supports increased exports of
natural gas as a way to relieve the glut of
product that has driven natural gas prices
down to historic lows. NEFI has written
comments to the DOE urging greater
exports. The two-year gap was the result of
DOE waiting for studies on how gas exports
would impact on domestic prices, manu-
facturing and jobs. Those studies – along
with several from the private sector – are
now done. The reports all generally said
exports would be a good thing. As a result
there is now every indication that the pace
of natural gas export licenses will quicken.
The DOE said it took about two months to
approve the most recent application. Energy
Secretary Ernest Moniz said he’ll review the
permit process before the next application;
analysts took that to mean that new permits
could start rolling out as fast as one every
two months.
OTHER ADVOCACY ISSUES
Northeast Home Heating Oil Reserve
–
In February of 2011, the Obama adminis-
tration reduced total storage of the Northeast
Home Heating Oil Reserve by 50 percent,
from two million barrels to one million bar-
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