The U.S. Department of Energy on Friday announced the creation of a gasoline reserve in the Northeast, hoping to ease potential supply disruptions.
The move to create the nation’s first regional gasoline reserve comes in response to Hurricane Sandy, which wreaked havoc on the East Coast in October 2012 and led to a weeks-long fuel shortage at many gas stations. Two refineries suffered significant damage, and more than 40 terminals in New York Harbor were forced to close following the storm.
The Energy Department said it will establish two reserve locations to store a combined total of one million barrels of gasoline. One reserve will be located near New York Harbor, and the other in New England.
Each storage terminal will hold 500,000 barrels of gasoline purchased by the U.S. government. The agency said the reserve will be used to provide short-term relief in the event of significant disruptions.
The Energy Department also said it expects to award contracts for commercial storage, service and product acquisition in time to launch the gasoline reserve by late summer.
The Northeast already has a heating oil reserve that holds one million barrels of diesel for the region. Hurricane Sandy marked the first time an emergency withdrawal from that reserve was made.
Gasoline futures ticked a penny higher to $2.95 a gallon on Friday.