The Energy Department said Wednesday that it will lend up to 315,000 barrels of heating oil from the Northeast Home Heating Oil Reserve to fuel retailers and terminal operators, opening the emergency stockpile to ease supply strains and hold down what households pay to heat their homes this winter.
The oil will move through an exchange rather than a sale. Companies that take barrels must return the same volume plus a premium, which the department said will refill the reserve before the 2027-28 heating season. The fuel will come from storage sites in South Portland, Maine; Boston; and New Haven, Connecticut. Bids are due Oct. 27, and transfers or deliveries are scheduled to be completed by Nov. 13.
The bid documents set a floor of 25,000 barrels per offer and require borrowers to return the oil, plus at least 5 percent more, by April 2027, the Portland Press Herald reported. Companies that miss that deadline face an added premium that grows by 2.5 percent each month.
Energy Secretary Chris Wright said he directed the exchange after receiving a letter from Maine's two U.S. senators, Susan Collins and Angus King, and after what he called "extensive discussions with Senator Collins." He described the step as "a temporary measure to solve a temporary supply disruption."
Wright also used the announcement to renew a pitch for natural gas. He urged the governors of New York and New England to work with the administration to build the Constitution Pipeline and move homes off heating oil, saying the switch "would save their residents billions of dollars in home heating and electricity costs."
The reserve holds about 1 million barrels and had been tapped only twice before, most recently after Hurricane Sandy in 2012. Maine news outlets described this release as the first aimed at lowering heating oil prices rather than responding to a sudden supply disruption or a natural disaster.
Collins and King asked for the release in a Sept. 22 letter, arguing that heating costs had climbed high enough to warrant emergency action. About half of Maine households heat with fuel oil, according to Collins. The state average sits at $5.97 a gallon, and prices in Maine are up 56 percent since February, when the war with Iran began and constricted oil traffic through the Strait of Hormuz. They are 77 percent higher than they were a year ago.
"The department anticipates this release will put downward pressure on home heating oil costs and make a real difference for Maine homeowners as they prepare for winter," Collins said in a joint statement with King. King said Maine "has been hit especially hard by the run up in fuel prices since the beginning of the Iran War" and that the release "will hopefully be some help."
Collins' office, citing federal inventory figures from Oct. 9, estimated that the barrels would raise New England's heating oil supply by about 13 percent. How much of that reaches customers' bills is harder to predict. The oil will not arrive in the Maine market until next month, and the Press Herald noted that its effect on prices is unclear.
Gov. Janet Mills welcomed the release while blaming the conflict for the price spike. "As President Trump's war abroad drives up the price of gas, kerosene, and heating oil here at home, I welcome this move," Mills said in a statement reported by WMTW, adding that she hoped it would give Maine residents "some meaningful financial relief." She also urged the congressional delegation to appropriate more money for LIHEAP, the federal home energy assistance program.
Heating costs have become a theme in Collins' reelection race with Election Day only weeks away. She and her Democratic challenger, former Maine Senate President Troy Jackson, have blamed each other for high energy costs.