Phantom Allocations and the Coming Heating Oil Shortage

Publication Date: September 1979

Publisher: Heritage Foundation (Washington, D.C.)

Author(s): Milton R. Copulos

Research Area: Energy

Keywords: Energy and environment

Type: Report

Abstract:

The Department of Energy, in its zeal to insure that it could prove that the nation had enough middle distillate to provide for the winter's needs, mandated that the fuel be kept in the only facilities it keeps records on: primary storage tanks. The trouble is that these are not the facilities closest to the customer: the secondary and tertiary levels are, but the Department does not monitor storage at these levels. As a result, their policy has given rise to the paradoxical situation of having enough distillate, but having it in the wrong place, or precisely the type of problem which developed with gasoline allocation. In that instance, the DOE'S policies managed to turn a 5 percent crude oil shortage into a 25 percent to 30 percent shortage at the pumps in some areas.