Since peaking in 2007 at 1.53 billion barrels, the volume of distillate fuel oil (DFO) supplied to the United States has declined somewhat (see Figure 1 ). DFO includes diesel fuel, home heating oil, and high sulfur fuel oil. Meanwhile, U.S. refinery DFO production has increased since 2009, reaching 1.7 billion barrels in 2013 (see Figure 2 ). U.S. refiners have increased diesel fuel production and export primarily to satisfy the demand by European markets. In 2013, the United States exported 409.7 million barrels of distillate fuel oil, of which 324.4 million barrels (91%) left from Gulf Coast ports; another 37.5 million barrels (9%) left East Coast ports. The United States also imports DFO in the form of heating oil. In 2013, distillate fuel oil imports exceeded 56.4 million barrels; although up from the previous year's 46.2 million barrels, distillate fuel imports have declined. Nearly 45.5 million barrels (98%) came through East Coast ports, to satisfy the Northeast region's demand. Overall, some 6.9 million households rely on heating oil nationally. The number of household users, however, has declined from the 8.7 million households in 2006-2007, and the Energy Information Administration (EIA) projects a 3% decline for 2013-2014. By and large, the Northeast United States represents the greatest demand for home heating oil where slightly more than 5.5 million households relied on it for primary space heating during the winter of 2012-2013. The decline may be attributed to a number of factors, including price, improvement in home energy efficiency and insulation, new construction, population shift, availability of alternative heating fuels, and milder weather (fewer heating degree days). The winter of 2013-2014 actually boosted heating degree days above the 30-year average. Home heating oil (alternatively referred to as fuel oil) is a middle-distillate refined petroleum product comparable to diesel fuel and even jet fuel (except for additives and sulfur content). The similarity of these fuels allows one to substitute for the other under certain conditions. However, taxation and air emission regulations differ based on use, and availability is seasonally dependent and subject to price volatility. (See Appendix A for a description of various distillate fuel categories.) Middle distillate intended for use as fuel oil is exempt from the $0.244 per gallon excise tax that the Internal Revenue Service (IRS) currently imposes on highway diesel fuel. Other middle distillate fuels are tax-exempt or subject to a reduced tax rate, including those used for heating, for farming, by state or local governments or non-profit educational organizations, and by boats engaged in fishing or transportation. Both the Internal Revenue Service (IRS) and the Environmental Protection Agency (EPA) have required refiners to add red dye to certain classes of middle distillate fuel, but for different reasons: The IRS—to prevent tax evasion by using exempt high-sulfur and low-sulfur middle-distillate for highway transportation use (a $10 per gallon penalty may apply to red-dyed middle-distillate fuel used as on-highway transportation fuel). The EPA—to identify diesel fuel with high-sulfur content to ensure that it is not used in on-highway vehicles (the introduction of ultra-low sulfur diesel [ULSD] now reduces that possibility). Heating oil demand is seasonal, and U.S. refineries prepare for it by switching their product slates during late summer to begin producing and stockpiling both heating oil and winter gasoline blends. During these "turnarounds," summer gasoline typically sees a price drop, and diesel fuel and heating oil see a price increase. The demand for home heating oil in the Northeast has been declining over the last decade (see Figure 3 ). In 2000, Northeast residential customers consumed nearly 4,682 million gallons (1,111.5 million barrels). By 2012 (the latest information available), consumption declined by 43% to 2,683 million gallons (63.8 million barrels). All states in the Northeast have experienced a decline in heating oil demand since 2000 (see Figure 4 ). New York, the largest consumer of residential heating oil, dropped 40% from 2001 to 2012 (from 1,395 million gallons to 835 million gallons). Rhode Island, the smallest consumer, experienced a 22% drop from 2000 to 2012 (from 129.2 million gallons to 101.2 million gallons). Perhaps a more telling indication of the Northeast's declining demand for heating oil is the number of households that rely on heating oil as a means of primary heating. Between the winter of 2006-2007 and the winter of 2012-2013, the number of households declined roughly 12%, from 6.7 million to 5.9 million (see Figure 5 ). The Energy Information Administration, in its March 2014 Short Term Energy Outlook, forecasts a further decline for the 2013-2014 winter. The reasons for declining demand are discussed in the following sections on the effect of price, availability of alternative fuels, changes in population, and housing construction. While the Northeast demand for home heating oil declined, the oil price increased from roughly $1.50 per gallon beginning in 2000 to just over $4.00 gallon in early 2013 (see Figure 6 ). The price trend reflected the trend in the composite cost of crude oil acquired by U.S. refiners, particularly the crude oil price spike in 2008 and the precipitous price drop that followed in 2009 (see Figure 7 ). Other fuels that can substitute for heating oil include natural gas, electricity, bottled propane, and wood. This raises the question whether residential consumers may have switched from heating oil to other available fuels. The availability of natural gas depends on the availability of transmission and distribution pipelines. At least 20 interstate natural gas transmission pipelines serve the northeast region of the United States (see Figure 8 ). This pipeline system delivers natural gas to several intrastate natural gas pipelines and at least 50 local distribution companies in the region. In addition to the natural gas produced in the region, several long-distance natural gas transmission pipelines supply the region from the Southeast through Virginia and West Virginia, and from the Midwest through West Virginia and into Pennsylvania. Canadian imports come into the region principally through New York, Maine, and New Hampshire. Liquefied natural gas (LNG) supplies enter the region from Canada through Highgate Springs, VT, and from other countries through Everett, MA (although these supplies have been declining). As shown in Figure 8 , service to the far northeastern states is limited. Natural gas produced from Pennsylvania's Marcellus shale, which could serve the Northeast, did not begin to come on line until after 2008, and the pipeline infrastructure to deliver this gas has not expanded in the New England states. However, as a percent of overall domestic demand for natural gas, the Northeast region has remained nearly steady, varying between 20% and 22% since 2000. After 2000, the Northeast demand varied somewhat through 2006, and then leveled off in the years since and returned to a level barely above 2001-2002 (see Figure 9 ). If heating oil users were switching to an alternative heating fuel, it was not apparent that natural gas was the choice. Residential use of kerosene also declined. Bottled gas (propane) also serves as a heating fuel. However, the price of residential propane rose from $1 per gallon in 2000 to over $2.80 per gallon in 2012, suggesting that it did not offer a more economical alternative. The number of Northeast households relying on propane as a primary space heating fuel has increased slightly over the past few years, up to 786,000 households in 2013. The residential demand for electricity by some Northeastern states has been rising since 2000. Consumption and growth appeared greatest in the region's most populous states—New York (population 19.4 million) and Pennsylvania (12.7 million) (see Figure 10 ). Both states also saw dramatic declines in heating oil demand, suggesting that some switching to electricity for heating may have occurred over the same time period (see Figure 4 ). In contrast, New Hampshire-Rhode Island-Vermont saw minimal increase in electricity demand, but still saw substantial drops in heating oil demand. Ostensibly, heating oil, natural gas, and electricity demands are a function of population and housing. Trends in housing unit numbers and occupancy, as reported by the U.S. Census Bureau, show that while population has increased, occupied housing rates remained nearly constant. In the case of the Northeast, heating oil and even natural gas demand declined with increased population and housing occupancy rates. Households may have been turning to electricity instead. Generally, the Northeastern states experienced a 3.21% aggregate increase in population from 2000 (53.59 million) through 2010 (55.32 million). New York and Pennsylvania, the region's most populated states, experienced growth near the aggregate increase (see Table 1 ). The New England states of Maine and New Hampshire, two of the least populous states, exceeded the average population growth with increases of 4.19% and 6.53% respectively. In 2000, the Census Bureau reported just over 22.1 million housing units with 91.5% occupancy (20.3 million) for the Northeast states. By 2010, housing units increased to 23.6 million with 89.7% occupancy (21.2 million). That is, the number of occupied housing units increased by roughly 0.9 million. Furthermore, each Northeast state experienced the same state of change (see Figure 11 ). The Low Income Home Energy Assistance Program (LIHEAP) provides funds to states, the District of Columbia, U.S. territories and commonwealths, and Indian tribal organizations (collectively referred to as grantees) primarily to help low-income households pay home energy expenses.