(Washington) U.S. Secretary of Energy Spencer Abraham today signed letters of notification to Congress that formally establish the Northeast Home Heating Oil Reserve, a two million barrel reserve of government owned heating oil to be used in cases of extreme circumstances of weather or threat to life.

In November of 2000, Congress amended the Energy Policy and Conservation Act of 2000 allowing the Department of Energy to move forward with plans to establish the northeast reserve. Abraham's formal notification to Congress and submission of the reserve plan establishes the reserve as a separate legal entity from the Strategic Petroleum Reserve, which was set-up in the 1970s and set-aside crude oil supplies for use in emergency situations.

Secretary Abraham said, "The reserve was established as an insurance policy against supply, inventory, and delivery problems in the wake of last winter's extreme weather that pounded the northeast United States. The reserve, if needed, will assist families and small business owners in times of severe crisis that impact heating oil supply and distribution."

"Like the crude oil reserve, our intention is to use the reserve sparingly to respond to severe energy supply interruptions. Last winter's weather showed us that the government does have a role in providing an important backup for heating oil supplies in the event severe circumstances affect supply and delivery in the Northeast."

President George W. Bush supported the creation of the reserve, Abraham noted in his letter to Congress, saying that the reserve is "an important element of the President's "Blueprint for New Beginnings" budget proposal. The President has proposed $8 million in funding for the Northeast Home Heating Oil Reserve.

Under the plan submitted by Abraham, the President will have authority over the use of the reserve. Like the Strategic Petroleum Reserve, specific requirements and rules govern the use of the home heating oil reserve.

Abraham added that he would urge commercial oil terminals and suppliers in the Northeast to continue conducting their business as if the reserve was non-existent. "If extreme events conspire to threaten life, health or the economic well being, the reserve will help provide additional oil to fill the gap until private suppliers can resume their business activities," Abraham said.

An equivalent of one million barrels of heating oil is stored in New York Harbor and one million barrels is stored in New Haven, Connecticut. Three companies, Amerada Hess Corp., Morgan Stanley Capital Group, and Equiva Trading Company have agreed to store the oil at their terminals, rotate the oil, and manage the delivery of the heating oil in the event of an approved use of the reserve. All three companies are experienced inventory managers.

There was wide bipartisan support in Congress for establishing the heating oil reserve with many members of Congress representing the Northeast United States leading the charge; including Senators Susan Collins, Bob Smith, Olympia Snowe and Representatives John Sununu, Charlie Bass, Ed Markey, Bernie Sanders, Joe Moakley, and others.

The following states fall under the jurisdiction of the Northeast Home Heating Oil Reserve:

New York
Connecticut
Maine
New Hampshire
Rhode Island
Vermont
Massachusetts
Pennsylvania
New Jersey