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Sandy gas shortages lead to build up of reserves for New York, Northeast
The United States plans to increase its gasoline stores in response to shortages in New York and Northeast states in the wake of Superstorm Sandy in late 2012, U.S. lawmakers and the Energy Department will announce on Friday.
U.S. Energy Secretary Ernest Moniz along with senators Charles Schumer of New York and Ed Markey of Massachusetts will announce a million-barrel, $215 million reserve build-up later on Friday, Schumer's office said.
The move aims to help shore up energy in the nation's Northeast corridor, which was battered by the massive October 2012 storm that closed refineries, disrupted gasoline supplies, and led to shortages in the area for several weeks.
Those shortages led to some of the largest jumps in gasoline prices in New York's history, despite the state's price gouging law aimed at preventing sellers from taking advantage of consumers amid such natural disasters, and some sellers faced fines.
Schumer, a Democrat, had asked the Energy Department in the wake of Sandy to review the situation and find a way to prevent similar shortages in the future.
The idea of an energy reserve is not new. Following the 2005 Hurricane Katrina, the U.S. considered stockpiling oil products, although that plan eventually fell to the wayside.
In a statement ahead of the announcement, U.S. officials said Friday's action would "enable a more secure energy infrastructure and better prepare for the potential impacts of climate change."
Analysts for Clearview Energy Partners said it was unclear how the Energy Department would set up a structure for additional inventories but that it could "implement the reserve as a freestanding facility, potentially operated under contract by a third-party."
Representatives for the Energy Department did not immediately respond to a request for comment.