II

106TH CONGRESS

2D SESSION S. 2094

To amend the Energy Policy and Conservation Act to ensure that petroleum

importers, refiners, and wholesalers accumulate minimally adequate supplies of home heating oil to meet reasonably foreseeable needs in the

northeastern States.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 24, 2000

Mr. KENNEDY introduced the following bill; which was read twice and referred

to the Committee on Energy and Natural Resources

A BILL

To amend the Energy Policy and Conservation Act to ensure

that petroleum importers, refiners, and wholesalers accumulate minimally adequate supplies of home heating oil

to meet reasonably foreseeable needs in the northeastern

States.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Stable Oil Supply

5 (SOS) Home Heating Act’’.

6 SEC. 2. FINDINGS AND PURPOSE.

7 (a) FINDINGS.—Congress finds that—
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1 (1) more than 35 percent of families in the

2 northeastern United States depend on oil to heat

3 their homes each winter, and most of those families

4 have no practical alternative to paying the going

5 price for heating oil or seeking public or private as6 sistance to pay for heating oil;

7 (2) consumers experienced sudden and dramatic

8 increases in prices for home heating oil during the

9 winters of 1989, 1996, and 1999, causing hardship

10 to families and other people of the United States, in11 cluding people on fixed and low incomes, people liv12 ing in rural areas, the elderly, farmers, truckers and

13 the driving public, and governments that pay home

14 heating oil bills;

15 (3) a substantial part of each sudden increase

16 in home heating oil prices has been caused by vastly

17 inadequate supplies of home heating oil accumulated

18 during the summer, fall, and winter months by im19 porters, refiners, and wholesalers; and

20 (4) increased stability in home heating oil prices

21 is necessary to maintain the economic vitality of the

22 Northeast.

23 (b) PURPOSE.—The purpose of this Act is to ensure

24 that minimally adequate stocks of home heating oil are

25 accumulated in the Northeast to meet reasonably foresee-
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1 able demand during each winter while protecting con2 sumers from sudden increases in the price of home heating

3 oil.

4 SEC. 3. DEFINITIONS.

5 Section 152 of the Energy Policy and Conservation

6 Act (15 U.S.C. 6232) is amended—

7 (1) by redesignating paragraphs (2), (3), (4),

8 (5), (6), (7), (8), (9), (10), and (11) as paragraphs

9 (3), (4), (5), (8), (9), (10), (11), (12), (13), and

10 (14);

11 (2) by inserting after paragraph (1) the fol12 lowing:

13 ‘‘(2) HOME HEATING OIL.—

14 ‘‘(A) IN GENERAL.—The term ‘home heat15 ing oil’ means distillate fuel oil.

16 ‘‘(B) INCLUSIONS.—The term ‘home heat17 ing oil’ includes No. 1 and No. 2 diesel and fuel

18 oils.’’;

19 (3) by inserting after paragraph (5) (as redesig20 nated by paragraph (1)) the following:

21 ‘‘(6) NORTHEAST.—The term ‘Northeast’

22 means the States of Maine, New Hampshire,

23 Vermont, Massachusetts, Rhode Island, Connecticut,

24 New York, Pennsylvania, and New Jersey.

25 ‘‘(7) PRIMARY HEATING OIL INVENTORY.—
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1 ‘‘(A) IN GENERAL.—The term ‘primary

2 heating oil inventory’ means a heating oil inven3 tory held by an importer, refiner, or wholesaler.

4 ‘‘(B) EXCLUSION.—The term ‘primary

5 heating oil inventory’ does not include any in6 ventory held by a retailer for the direct sale to

7 an end user of home heating oil.’’; and

8 (4) by adding at the end the following:

9 ‘‘(15) WHOLESALER.—The term ‘wholesaler’

10 means any person that—

11 ‘‘(A) owns, operates, leases, or otherwise

12 controls a bulk terminal having a total petro13 leum storage capacity of 50,000 barrels or

14 more;

15 ‘‘(B) stores home heating oil; and

16 ‘‘(C)(i) resells petroleum products to retail

17 businesses that market the petroleum products

18 to end users; or

19 ‘‘(ii) receives petroleum products by tank20 er, barge, or pipeline.

21 ‘‘(16) WINTER SEASON.—The term ‘winter sea22 son’ means the months of November through

23 March.’’.
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1 SEC. 4. HOME HEATING OIL RESERVE FOR THE NORTH2 EAST.

3 Part B of the Energy Policy and Conservation Act

4 (15 U.S.C. 6231 et seq.) is amended by inserting after

5 section 157 the following:

6 ‘‘SEC. 157A. VOLUNTARY PLANS FOR HOME HEATING OIL

7 RESERVE.

8 ‘‘(a) SUBMISSION AND DEVELOPMENT OF VOL9 UNTARY PLANS.—Importers, refiners, and wholesalers

10 that hold primary heating oil inventories for sale to mar11 kets in the Northeast, acting individually or in 1 or more

12 groups, should, for the purposes of ensuring stability in

13 energy fuel markets and protecting consumers from dra14 matic swings in price—

15 ‘‘(1) develop voluntary plans, in consultation

16 with interested individuals from nonprofit organiza17 tions and the public and private sectors, to maintain

18 readily available minimum product inventories of

19 heating oil in the Northeast, possibly in combination

20 with the hedging of future inventories, to mitigate

21 the risk of severe price increases to consumers and

22 to reduce adverse impacts on the regional and na23 tional economies; and

24 ‘‘(2) submit the voluntary plans to the Sec25 retary not later than 180 days after the date of en26 actment of this section.
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1 ‘‘(b) CERTIFICATION AND REPORT.—

2 ‘‘(1) IN GENERAL.—If the Secretary determines

3 that a plan submitted under subsection (a)—

4 ‘‘(A) is likely to achieve the purposes of

5 this Act, the Secretary shall so certify, and the

6 importer, refiner, or wholesaler shall implement

7 the plan; or

8 ‘‘(B) is not likely to achieve the purposes

9 of this section, the Secretary shall issue a state10 ment explaining why the plan does not appear

11 likely to achieve those purposes.

12 ‘‘(2) REPORT.—Not later than 240 days after

13 the date of enactment of this section, the Secretary

14 shall submit to Congress a report describing the

15 findings and reasons for a certification or failure to

16 certify a plan under this subsection.

17 ‘‘(c) DEFENSE TO ANTITRUST ACTIONS.—

18 ‘‘(1) IN GENERAL.—There shall be available as

19 a defense to a civil or criminal action brought under

20 the antitrust laws (or any similar State law) with re21 spect to an action taken to develop and carry out a

22 voluntary plan under subsection (a) by an importer,

23 refiner, or wholesaler the fact that—

24 ‘‘(A) the action is taken—
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1 ‘‘(i) in the course of developing the

2 voluntary plan; and

3 ‘‘(ii) in the course of carrying out the

4 voluntary plan, if the voluntary plan is cer5 tified by the Secretary under subsection

6 (b);

7 ‘‘(B) the action is not taken for the pur8 pose of injuring competition; and

9 ‘‘(C) the importer, refiner, or wholesaler is

10 in compliance with this section.

11 ‘‘(2) LIMITATION.—Except in the case of an ac12 tion taken to develop a voluntary plan, the defense

13 provided in paragraph (1) shall be available only if

14 the person asserting the defense demonstrates that

15 the action was specified in, or within the reasonable

16 contemplation of, a voluntary plan certified by the

17 Secretary.

18 ‘‘(3) BURDEN OF PROOF.—A person inter19 posing the defense under paragraph (1) shall have

20 the burden of proof, except that the burden shall be

21 on the person against which the defense is asserted

22 with respect to whether an action is taken for the

23 purpose of injuring competition.

24 ‘‘(d) REPORT.—Not later than 1 year after the date

25 of enactment of this section, and annually thereafter, the
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1 Secretary shall submit to Congress a report describing the

2 results of the implementation of all voluntary plans cer3 tified under this section, including specific compliance by

4 importers, refiners, and wholesalers that serve the North5 east market with respect to the adequacy of the home

6 heating oil supply.

7 ‘‘(e) PLAN ADOPTED BY SECRETARY.—If, by the

8 date that is 240 days after the date of enactment of this

9 section, for each importer, refiner, and wholesaler in the

10 Northeast, a certified plan is not implemented in accord11 ance with subsection (b), the Secretary shall adopt and

12 implement a plan in accordance with section 157B.

13 ‘‘SEC. 157B. HOME HEATING OIL RESERVE FOR THE NORTH14 EAST.

15 ‘‘(a) ESTABLISHMENT OF PRIVATE HOME HEATING

16 OIL RESERVES.—If a certified plan described in section

17 157A is not implemented in accordance with that section

18 for each importer, refiner, and wholesaler that stores home

19 heating oil for sale in the Northeast, not later than 300

20 days after the date of enactment of this section, the Sec21 retary shall establish a private home heating oil reserve

22 for the Northeast in accordance with this section.

23 ‘‘(b) INVENTORY.—

24 ‘‘(1) IN GENERAL.—Except as provided in para25 graph (2), the Secretary shall periodically monitor
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1 supply levels as necessary to ensure that each im2 porter, refiner, and wholesaler of home heating oil

3 that stores home heating oil for sale in the North4 east shall have in inventory and readily available to

5 refiners in the Northeast a quantity of home heating

6 oil that the Secretary determines is equal to the

7 quantity that each importer, refiner, or wholesaler

8 may reasonably be expected to require to supply the

9 needs of its customers during the present or fol10 lowing winter season without subjecting consumers

11 to sudden price increases that are due in part to

12 inadequate buildup of heating oil inventories.

13 ‘‘(2) LIMITATION.—The Secretary shall not re14 quire any importer, refiner, or wholesaler to store

15 any product under paragraph (1) in a quantity

16 greater than 95 percent of the average storage ca17 pacity for home heating oil reasonably available to

18 the importer, refiner, or wholesaler during the pre19 ceding 2 years.

20 ‘‘(3) INCREASED INVENTORY.—If the Secretary

21 determines that an inventory of home heating oil

22 does not meet the requirement of under paragraph

23 (1), the Secretary may direct an importer, refiner, or

24 wholesaler to acquire, store, and maintain in readily

25 available inventories any quantity of home heating
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1 oil that the Secretary determines to be necessary to

2 supply heating oil needs in the Northeast without

3 subjecting consumers to sudden price increases that

4 are due in part to inadequate buildup of heating oil

5 inventories.

6 ‘‘(4) REGULATIONS.—As soon as practicable

7 after the date of enactment of this section, the Sec8 retary shall promulgate regulations necessary to

9 carry out this section, including regulations that—

10 ‘‘(A) authorize civil penalties to enforce

11 this section; and

12 ‘‘(B) provide that the Secretary shall co13 operate with State energy authorities in car14 rying out this section.

15 ‘‘(c) EXCESS INVENTORY.—At the end of each winter

16 season, the Administrator of the Environmental Protec17 tion Agency shall take appropriate and reasonable action

18 to enable importers, refiners, and wholesalers of home

19 heating oil to sell any remaining excess inventories of heat20 ing oil that the importers, refiners, and wholesalers may

21 have.

22 ‘‘(d) IMPLEMENTATION.—In implementing this sec23 tion, the Secretary shall ensure, to the maximum extent

24 practicable, that the manner of implementation supports
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1 the maintenance of an economically sound and competitive

2 petroleum industry.

3 ‘‘(e) REPORT.—Not later than 1 year after the imple4 mentation of a plan under this section, the Secretary shall

5 submit to Congress a report describing the results of the

6 implementation of the plan, including specific compliance

7 by importers, refiners, and wholesalers in the Northeast

8 with respect to home heating oil supply buildup.’’.

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