New England may see a regional fuel shortage, Biden administration says

The federal government is asking New England states to begin shoring up their oil supplies in advance of the coming winter and the peak of hurricane season.The Boston Globe/Boston Globe

The US Department of Energy on Thursday night sent letters to each of the six New England governors urging them to begin shoring up their oil supplies in advance of the coming winter and the peak of hurricane season.

As it stands, the region’s oil stockpile is low — not low enough to prompt emergency action — but at a level the US government believes could lead to disruptions during a New England winter storm or extreme weather in the Gulf of Mexico, where the region imports much of its oil and fuel from. Stockpiling now, the Energy Department says, will prevent strain on the system during extreme weather.

In a letter to Governor Charlie Baker, Secretary of Energy Jennifer Granholm wrote: “I urge you to consider what additional steps you can take in the coming weeks to improve preparedness, including using any legislative or executive tools at your disposal, working with responsible state agencies to require increased storage levels, and encouraging industry to voluntarily prioritize increasing gasoline and distillate inventories at this pivotal period of heightened risk.”

On the East Coast, gasoline inventories are at their lowest point in nearly a decade, Granholm said in the letter, and in New England, the diesel supply is roughly 63 percent below the five-year average, she added. Should an extended winter storm pummel the East Coast, New England, which relies on home heating oil more than any other part of the country, could find its energy supply chain disrupted.

The United States is exporting large amounts of oil and diesel fuel to Europe to make up for a decrease in supply flowing in from Russia amid the war in Ukraine, and oil production still has not returned to pre-pandemic levels.

The Department of Energy also sent letters Thursday to seven major oil companies in the United States, asking them to hold onto their stocks to help offset the shortage. Granholm has been meeting regularly with their top executives to coordinate efforts.

New England is more at risk of feeling the pain of the shortage than other areas because the region imports large percentages of its oil and fuel from other parts of the country and gets hit with extreme weather frequently, a Biden administration official said Friday.

But even if a major storm were to disrupt supplies, the region has handled weather-induced oil supply restrictions before, such as when a blizzard rocked the East Coast in 2018. The energy market was upended then, and there was no crisis-level shortage.