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DOWNSTATE PETROLEUM SUPPLY AND AVAILABILITY, WINTER 2014

This report explores the supply and availability of petroleum products in downstate New York during the winter of 2014. It highlights the impact of colder-than-normal weather, gas interruptions, and increased demand on the distillate market. Recommendations for changes to PSC procedures and gas utility tariffs are also provided.

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DOWNSTATE PETROLEUM SUPPLY AND AVAILABILITY, WINTER 2014

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  1. DOWNSTATE PETROLEUM SUPPLY AND AVAILABILITY, WINTER 2014 NYS Department of Public Service Technical Conference May 15, 2014 Kevin M. Rooney, CEO Oil Heat Institute of Long Island (Representing the Empire State Petroleum Association)

  2. Total Petroleum Products Supplied (Thousand Barrels) 5.81 Billion/Gallons/Year Source: Patterns and Trends. New York State Energy Profiles: 1997-2011. NYSERDA, June 2013.

  3. Total NYS Petroleum Distillate Consumption 5 Year Average, 2007-2011 69.5 million/barrels/year = 2.92 Billion/Gallons/Year Source: Patterns and Trends. New York State Energy Profiles: 1997-2011. NYSERDA, June 2013.

  4. Distillate Consumption By Sector 9.98 Million/Gallons/Day Source: Patterns and Trends. New York State Energy Profiles: 1997-2011. NYSERDA, June 2013.

  5. Statement on Electric Utilities “These (distillate) fuels are (also) used by the electric sector for primary electric generation and as crucial alternative back-up fuels, helping to maintain electric reliability, particularly in the downstate region.” (emphasis added) Source: Shaping the Future of Energy. Draft N.Y.S. Energy Plan, Volume 2: Sources, pg. 138

  6. Distillate Storage Capacity mm/gal IS IT SUFFICIENT TO MEET ATYPICAL DEMAND SURGES? Source: Shaping the Future of Energy. Draft N.Y.S. Energy Plan, Volume 2: Figure 55, pg. 147

  7. Statement on Storage Capacities “This indicates that … there may be less capacity available to meet atypical demand surges by the heating and electric generation sectors … during periods of colder than normal temperatures. In effect, consumers are becoming more dependent on the ability of the petroleum transport industry to resupply the remaining terminals … during periods of peak demand.” Source: Shaping the Future of Energy. Draft N.Y.S. Energy Plan, Volume 2: Sources, pg. 147

  8. Colder-Than-Normal Weather January 2014 was 13% colder than normal Source: Fax-Alert Weather Service, LLC January 2014 versus 10 year average for Central Park, New York City and Islip MacArthur Airport, Bohemia, NY

  9. Impact of Colder-Than-Normal Weather Residential Increases To 5.48 M/G/D Commercial Increases To 2.75 M/G/D 10.92 Million/Gallons/Day Source: Extrapolation of data from slide 4, based on weather data from slide 5

  10. Downstate Gas Interruptions JANUARY 2014 13 Days Total *Based on time of initiation and cessation of interruption. Source: Utility Notifications to interested parties, as required by NYS Department of Public Service

  11. Total Interruptible Customers DOWNSTATE 4,699 96.4% of Statewide Total Source: NYS Department of Public Service

  12. Displaced Gas Volumes PER DAY OF SALES & TEMPERATURE CONTROLLED INTERRUPTIBLES 1.9 Million/Gallons/Day Equivalent of Additional Distillate Demand Source: NYS Department of Public Service

  13. Impact on Distillate Demandof Natural Gas Curtailments Residential: No Increase Commercial Increases 1.9 M/G/D over Previous Chart Total Demand Now Equals 12.82 Million/Gallons/Day Source: NYSERDA, Patterns and Trends, 2013 and NYS Department of Public Service

  14. Commodity and Retail ULSD Price Increases 30 cents/gal Average Retail Price Increase Source: Hedge Solutions, NYMERC Monthly Reports, January 2014, and NYSERDA Heating Fuels Report, 1/1/14-2/10/14

  15. On Road Diesel Price Increases ON ROAD DIESEL PRICES ALSO INCREASED DUE TO TIGHT ULSD SUPPLIES 18.75 cents/gal Average Retail Price Increase Source: Hedge Solutions and NYSERDA Transportation Fuels Reports, 1/1/14-2/10/14

  16. Recommended Changes to PSC Procedures and Gas Utility Tariffs Utility generators using ULSD and interruptible gas customers using ULSD or other distillate petroleum products as their alternative fuel should:

  17. Q & A Kevin M. Rooney Empire State Petroleum Association Phone: (631) 360-0200 | Email: info@ohili.org

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