Riverhead's Dilemma: East End Gas Prices May Fall...But Wait!

When Superstorm Sandy hit the New York area back in 2012, government officials made a call to the United Riverhead Terminal, which has a giant oil tank farm out on Sound Shore Road in Riverhead, asking if they had gasoline there. A crippling gasoline shortage had begun, and it could severely affect the East End if the Island were cut off because as far as anybody knew, the nearest source of gasoline was in Holtsville, near Port Jefferson.

Scott Kamm, the general manager of URT had to tell them that what they had was 155 million gallons of petroleum in 20 tanks there. None of it was gasoline.

As a result of this call, and at the urging of others, URT last year decided to set aside two of their smaller tanks for the storage of gasoline. These tanks would store 4.8 million gallons, about 3 percent of their total capacity. Half would be regular gas. The other half would be premium. This would be much appreciated during the next storm, or in any storm that might cut off gasoline delivery from the west end of Long Island. URT would also build two new and very small tanks to hold ethanol, the fuel made from corn. All gasoline sold on Long Island has to have 15 percent ethanol.

The Town of Riverhead decided to hold a hearing about this. In fact, URT does not need a permit from the Town to do this. URT was built back in 1955, and is grandfathered in. By the law, they can’t expand from what they were when grandfathered in, but also by town law, they are allowed up to a 10 percent growth just to accommodate small increases in service. The additional tanks for the ethanol represented less than 1 percent of a physical increase.

The first hearing date was October 21, and hearings were held over through to December 17. A final “decision,” if that is what you would call it since URT has not applied to Riverhead, will be issued on April 30.

There are two organizations that would be expected to oppose this plan. One is a group called Northville Beach Civic Association that represents homeowners who live along the 20-mile stretch of Long Island Sound that is basically either farmland or beach houses along that stretch of shoreline. The URT facility, isolated and almost entirely surrounded by farmland—who wants to have a vacation home near a tank farm?—is centrally placed from this organization’s perspective and is therefore a blot, the only blot, on the otherwise glorious vista of Long Island Sound they enjoy. They would like nothing better than it should just go away, which of course, it will not.

The other group that might oppose this application was the Northville Oil Company based in Port Jefferson, and with its gasoline tanks far, far away in Holtsville. Northville, (its name is not to be confused with the resident’s association location in Riverhead) has a virtual monopoly on gasoline that is trucked out to eastern Long Island. You get it from them. Or you get it from farther away in Brooklyn or New Jersey. As you know, the price of gasoline at the pump gets higher and higher as you head out east. This is because the company that delivers the gasoline has an option to use “zone pricing,” a cost which rises higher and higher the further you go from the terminal—which is in Holtsville. Northville Oil opts. Having a source for gasoline in Riverhead is not good for Northville Oil.

The hearing, and the subsequent hearings all through November and December were one big cry of Not in My Backyard. You would have thought that the proposal was to drop an Atomic Bomb on Riverhead. Gasoline is more volatile than petroleum. There could be explosions. Thundering herds of giant trucks would now be on Sound Avenue. Children would be endangered. (URT estimates an extra 10 trucks a day). Traffic will be impacted. IS THIS SAFE? One letter writer wrote. “One gallon of gasoline releases explosive energy equal to 63 sticks of dynamite…I wouldn’t want to live within a 50-mile radius of that. ‘Stuff happens.’ No doubt about it.”

Riverhead Town Board members, constantly being hounded by the civic organization, (Northville Oil was silent) have said they are, almost to a man, convinced by the overwhelmingly organized and persuasive argument presented during the hearings by the organization’s attorneys and experts. As a matter of fact, nobody spoke in favor of the plan, except, of course, URT.

A rejection by the Riverhead Town Board might not mean very much. But it could result in them sending ordinance officials down there to stop the project if it begins, even though the Town would be violating its own laws. Lawsuits would result. Entanglements. Delays.

Speaking for the rest of the people on eastern Long Island, I think this would be a sad and very bad outcome. We would remain unprotected in a severe storm.

(Opponents argue that there is now a 3 million-gallon set-aside by gasoline storage firms for emergencies—yeah, up-island.)

We would also lose the possibility of having a second source for our gasoline supplies, which, by its very existence, would cause the price of gasoline to go down all over eastern Long Island. It could even result in the end of “zone pricing,” something which for the last five years State Assemblyman from our district, Fred Thiele, has been fighting and fighting.

A law to end this loophole passes in the Assembly, he told us. But then it doesn’t get past the Senate. Thiele said he would be very much in favor of having a second source for gasoline on the East End, but would want to see it thoroughly looked into before it might proceed.

The Long Island Gasoline Retailers Association here on the East End—well, I don’t have to tell you how much they want that “zone pricing” ended.

“Having the tanks up and running will bring a little competition to the area between the two terminals,” says Kevin Beyer, the Long Island Gasoline Retailers Association president. “Distributors won’t be beholden to one terminal.”

I recall years ago how hard Shelter Island fought against having an underground electric line that hooked up Greenport to Sag Harbor so we’d have a backup source of electricity coming around the other way in case the regular east-west lines went down. That line is in place.

Opponents of URT recall how we fought and beat off three nuclear power plants, one in Shoreham and two proposed for Jamesport, years ago. They compare this to that. Shame on them.

Nobody wants to live next to a giant 15-tank, 150-million-gallon storage tank community. But it’s there. It’s not going to grow. But it’s not going to pick up its skirts and hobble away either. We need this second source of gasoline for the East End, for safety and for untold millions and millions of dollars in gasoline cost savings.