Heating oil stockpile scrutinized; Gas pinch may fuel high prices Source: Boston Herald Publication date: 2000-06-27

Bay Staters left out in the cold by through-the-roof home heating oil prices last winter may be headed for the deep freeze again if oil companies don't start stocking their reserve tanks for next season, industry analysts warn. "They're really laying the foundation for a very similar set of circumstances (to what) we saw last year. A lot of people in the industry are looking at it and saying, `Gee, when are they going to build up stocks?' " said Tom Kloza of the Oil Pricing Information Service in New Jersey.

One big reason for the empty tanks is the current gasoline pinch, which has led oil companies to produce higher-profit margin fuels to feed another consumer demand, Kloza said.

But that explanation doesn't sit well with oil-heat customers.

"That's going to impact heating oil? Swell!" Nancy Patti of Wenham said sarcastically.

Dorchester senior Harris Drake also has bad memories of the winter of 1999-2000.

"I had to cut off part of the house. They raised the prices so fast that you get a load one day at $1.68 (per gallon) and the next load it was $1.89," he said, adding, "I think the government or somebody should step in and do something."

State lawmakers say they are, scheduling a September hearing with oil-industry representatives.

"Last year we were caught with our pants down. Under my watch this year, I'm going to make sure those tanks are full in September and October," said Rep. John J. Binienda (D-Worcester), co-chair of the Joint Committee on Energy.

"Our hope is that they'll say, `We don't want to be called on the carpet,' " Binienda said.

If oil companies aren't responsive to local legislative efforts, they may be to those on the federal level, where a bill by Rep. Bernard Sanders (I-Vt.), would establish a 6.7 million-gallon heating- oil reserve, earmarking at least 2 million barrels toward New England.

But passage of that measure is not certain, and observers say stockpiling is needed now, whether it passes or not.

"You have to build up between April and December," Kloza said. "They've got plenty of time, but what was a six-month window is a four-month window now."

An oil-company trade group countered that.

"It's still a long ways away," said Ron Planting of the American Petroleum Institute, maintaining that the industry could meet demand without stockpiling. "Last year, refineries produced 17 million barrels in three weeks."

While that may impress engineers, activists remain skeptical.

"They should be building up the reserves. They're not and they're looking forward to making a killing this winter," said Robert Coard of Action for Boston Community Development, which provides fuel assistance to low-income residents.

Coard warned that natural-gas prices were also on the rise.

"Gas usually follows the price of heating oil. It doesn't at all look well for low-income people for this winter," he said.

Nor are oil distributors overly optimistic. Explaining that $2- per-gallon oil results in cash flow and collection problems, Robert L. Gray of Dorchester's Gray Fuel said, "I don't know any smaller companies like myself that made much money last year."

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-- Martin Thompson (mthom1927@aol.com), June 27, 2000