The U.S. Department of Energy (DOE) announced Oct. 21 that it will offer up to 315,000 barrels of reserve heating oil to bidders before winter, citing supply-chain disruptions and seasonal costs in the Northeast.
The Energy Information Administration (EIA) recorded a $6.112-per-gallon average for residential heating oil in New England on Oct. 19. That was $2.666 higher than a year earlier, or about 77%.
In Maine, where roughly half of households depend on fuel oil for their main heat, the state’s Sept. 14 survey showed an average of $5.77 per gallon, up 74% from a year earlier. The Maine Department of Energy Resources estimated that filling a 275-gallon tank cost nearly $675 more than a year earlier.
The exchange requires successful bidders to return the volume they receive plus an added premium. Contractors cover transportation expenses. Returns are scheduled from January through September 2027, and DOE says the reserve must be restored before the 2027-28 heating season.
Sens. Susan Collins and Angus King of Maine said they had pressed the administration to draw on the reserve. Collins welcomed the response, while King said he hoped the added oil would help. Collins’ office said DOE expects the exchange to put downward pressure on heating oil costs and estimated the volume would increase New England supply by 13%; the effect on household prices has not been established.
In a Sept. 22 letter seeking a release, the senators pointed to conflicts in the Middle East, the Russia-Ukraine war and low distillate inventories. DOE has cited supply-chain challenges without naming those factors as causes.
DOE describes the one-million-barrel reserve as a safeguard for Northeast homes and businesses during supply interruptions. DOE says the reserve’s first emergency withdrawal came during the 2012 response to Hurricane Sandy. Collins’ office says the reserve had been used twice in its 26-year history, with neither earlier use aimed at lowering home-heating oil prices.
Energy Secretary Chris Wright called the release a “temporary measure” to address the disruption. Companies must submit bids by noon ET on Oct. 27, and DOE has scheduled transfers or deliveries to finish by Nov. 13.
