News

Speeches/Testimony

Statement of the National Petrochemical & Refiners Association at the Department of Energy (DOE) & National Association of State Energy Officials (NASEO) Home Heating Oil Summit
Boston, Massachusetts
February 16, 2000

The National Petrochemical and Refiners Association (NPRA) is pleased to join U.S. Secretary of Energy Bill Richardson, other federal, state and local officials and other stakeholders at the Boston Town Meeting regarding heating oil supplies. NPRA's members include essentially all refiners in the United States.

The refining industry is working with Secretary Richardson and others to respond to the current situation. NPRA, along with other affected parties, joined the Secretary at a meeting in Washington on February 9 to discuss many related issues. At that meeting, the Secretary asked refiners for additional information regarding the heating oil price and supply problems affecting the Northeast. He also asked that refiners take any actions that might make increased supplies of heating oil and other distillate products available for immediate and near-term supply to that region.

Several of NPRA's member company representatives present at last week's DOE meeting provided information to the Secretary and other participants on requested topics. These and other NPRA member companies have also provided information privately to the Secretary. Hopefully, this information has helped the Secretary and the Energy Department to assess the current situation and near-term supply situation as they evaluate various responses. Refiners have confirmed to the Secretary that efforts to ensure adequate production of heating oil and diesel have been underway for weeks and are continuing. We have also responded to the Secretary's suggestion that refiners consider postponing maintenance and turn-arounds where possible, but only when compatible with safety concerns. We have communicated to our entire membership the Secretary's call for information and assistance, and we anticipate continued close contact between us, our members and the Secretary's office so long as supply problems persist.

NPRA and its members would urge federal and state policymakers to review the current situation and events leading up to it for ways to avoid or at least minimize the possibility of future price and supply upsets. We support the Secretary's efforts in this regard, including his decision not to tap the Strategic Petroleum Reserve (SPR) in an attempt to affect product prices. The SPR is a strategic asset intended to counteract severe crude oil supply disruptions such as occurred during the 1970s. Using it to manipulate prices would both politicize this strategic asset and render it less useful for the purpose for which it was originally designed. Also, any crude oil supplies from the SPR would reach the market long after the period of price or supply concern has passed, as occurred during the Persian Gulf War.

NPRA supports the Secretary's attempts to urge OPEC and other suppliers of crude oil to consider providing additional allocations of oil to U.S. markets. Renewed international economic growth and the continuing strength of the U.S. economy may warrant increased crude oil supplies. Refiners might need access to more crude in order to meet projected strong demand for gasoline during the upcoming driving season. We also need to guard against a repeat problem with heating oil supplies if untimely "cold snaps" occur during the next and subsequent winters.

When the current situation has passed, NPRA supports a rethinking of current U.S. policy regarding production of crucial energy products such as heating oil, diesel and gasoline. For too many years we have consciously or unconsciously followed a national policy which doesn't pay sufficient attention to the question of supply. Often, we have pursued overly expensive environmental restrictions without looking for equally effective but less costly alternatives. The inevitable result is the situation which we confront in the Northeast, which will likely recur if these policies are not changed. Thus, when the current crisis is over, NPRA hopes that consumers and other stakeholders will join us in working with policymakers to realize a more stable environment for refined petroleum product supplies. As a nation, we must also develop policies that promote continued environmental progress without reducing the supply of petroleum products needed for a healthy economy.