Amid fears of price spikes, Dems press Chu to fill Northeast oil reserve

Three House Democrats on Tuesday called on Energy Secretary Steven Chu to increase the size of a Northeast oil reserve amid concerns that recent refinery closures will make it more expensive for people to heat their homes during the winter months.

Reps. Edward MarkeyEdward (Ed) John MarkeyDemocrats shoot down talk of expanding Supreme Court Schumer: 'Nothing is off the table' if GOP moves forward with Ginsburg replacement Democrats see fundraising spike following Ginsburg death MORE (D-Mass.), Robert Brady (D-Pa.), and Allyson Schwartz (D-Pa.) pressed Chu to increase the size of the Northeast Home Heating Oil Reserve to 2 million barrels amid plans by ConocoPhillips and Sunoco to idle three Pennsylvania oil refineries.

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“Given the already high prices consumers are facing this winter, DOE must ensure that consumers are safeguarded from spot shortages and higher prices resulting from these oil companies reducing refining capacity,” the lawmakers said in a letter to Chu.

The Democrats pointed to a recently released Energy Information Administration report that raised concerns about potential price volatility as a result of the companies’ decisions to idle the oil refineries. The three Pennsylvania refineries make up about half of the Northeast’s refining capacity.

Meanwhile, in a separate letter, Markey and Brady pressed the Federal Trade Commission to examine the companies’ plans to idle the refineries.

“We are extremely concerned that the decisions by these two oil companies to remove such a substantial amount of the Northeast’s refining capacity could adversely impact consumers and we request that the FTC examine the enclosed EIA analysis as part of its ongoing review of these oil company actions, consistent with the FTC’s responsibilities to protect consumers from anticompetitive or other improper practices,” the lawmakers said in the letter to FTC Chairman Jon Leibowitz.

The letter comes several days after EIA released an analysis of the effects of the Pennsylvania refinery closures. The report says the idled refineries could create a series of logistical problems that could increase “price volatility.”

In order to protect against potential price spikes, Markey, the top Democrat on the House Natural Resources Committee, and the other lawmakers called on Chu to fill the Northeast Home Heating Oil Reserve to full capacity.

The reserve, which was established under a 2000 energy law to make up for supply losses, now holds 1 million barrels of oil. It originally was designed to hold 2 million barrels.