History of the Northeast Gasoline Supply Reserve (NGSR)
In 2012, The Department of Energy (DOE) created the NGSR following Superstorm Sandy’s catastrophic damage to refineries and terminals in New York harbor. The emergency stockpile created a buffer large enough to allow commercial operators to compensate for the initial impacts of interruptions in their supply, but not so large as to dissuade the companies from maintaining stock levels sufficient to respond to routine disruptions or to recognize that increasing prices are an indicator that more supply is needed. The one-million-barrel emergency reserve was intended to give Northeast consumers supplemental supplies for a few days in the event of a hurricane or other disruption, until existing distribution infrastructure could return to full operation. The reserves were located in the New York Harbor area (900,000 barrels) and in South Portland, Maine (100,000 barrels).
Closing the Reserve
The sale of the Northeast Gasoline Supply Reserve (NGSR) was directed by Act of Congress, bill H.R.4366 – Consolidated Appropriations Act, 2024, that became public law on March 9, 2024.
The Consolidated Appropriations Act directed the Secretary of Energy to sell one million barrels of refined petroleum product (gasoline) from the Strategic Petroleum Reserve. “Upon the completion of such sale, the Secretary shall carry out the closure of the NGSR.”
The Consolidated Appropriations Act further stated that the Secretary of Energy may not establish any new regional petroleum product reserves unless funding for the proposed regional petroleum product reserve is explicitly requested in advance in an annual budget submitted by the President pursuant to section 1105 of title 31, United States Code, and approved by the Congress in an appropriations Act.
On May 21, 2024, the DOE announced the sale and liquidation of the NGSR per the Consolidated Appropriations Act. On July 2, 2024, DOE announced that contracts were awarded to 5 companies. As of this date, the NGSR is no longer in existence.