"Yes, the changes in state heating oil rules will impact the reserve," DOE spokeswoman Jenny Hakun said in an e-mail response to questions. "We will most likely follow the most stringent requirement to ensure we can meet all Northeast state specifications for sulfur."
The 2-million-barrel reserve is spread out in storage terminals in New Jersey and Connecticut, both of which have recently approved tighter sulfur rules for heating oil.
Earlier this month, New Jersey announced its permitted heating oil sulfur level would drop from the current 2,000-3,000 parts per million maximum to 500 ppm on July 1, 2014, then to 15 ppm on July 1, 2016.
The Connecticut law has a "three-state trigger" in the sulfur cut, which will take effect only if Massachusetts, Rhode Island and New York all make similar moves. The state hopes to cut sulfur to 50 ppm starting in July 2011, followed by a drop to 15 ppm in July 2014. There also would be a mandate to use a 2% biodiesel blend in July 2011, scaling up to a 20% blend by 2020.
New York plans to go straight to a 15 ppm limit in 2012 from its former maximum limit of 10,000 ppm.
"Heating oil currently in the reserve does not exceed 2,000 ppm," said Hakun. She said there is "no replacement schedule for product in the reserve" and that the stored product "is co-mingled with commercial product and rotated on a first in/first out basis for quality control purposes."
"The DOE continues to monitor the situation in the Northeast regarding ultra low sulfur heating oil and when required, will accomplish the conversion in the most efficient way," she said.
According to documents relating to the New Jersey decision, a "sell-through" provision has been created that will allow fuel already stored in the state to be sold with its current specifications until it runs out.
"These sell-through provisions are needed to avoid potentially severe negative economic consequences to the regulated community, such as the Northeast Home Heating Oil Reserve run by the US Department of Energy," say the documents, which include comments on the new sulfur rules by New Jersey's Department of Environmental Protection.
"New fuel oil meeting the lowest sulfur in fuel standards will eventually be purchased to replace the existing stocks and the full benefit to air quality will be seen over time," said the state DEP.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
