The Oil Drum | Gas Shortages?: This Week in Petroleum

202 comments on Gas Shortages?: This Week in Petroleum - September 24

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indeolie on September 24, 2008 - 5:05am

How do gasoline imports fall into this picture? Platts and other sources are reporting that a large queue of vessels from Europe awaiting discharge is building. The arb to the US has been open for weeks (with this result, Euro refiners running flat out to produce arbitrage barrels) but it has now been closed, both for NY and USGC. This implies that the gasoline supply situation is getting better not worse. Local distribution problems aside (which apparently are real, and undoubtedly do hurt), the US as a whole does not look that short gasoline anymore.

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urbanteacher56 on September 24, 2008 - 6:48am

I know that from a consumer standpoint last weekend around here in central NC saturday on the roads looked like Sunday evening, people really are not driving as much. Everything about what is going on is well strange.

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speek on September 24, 2008 - 8:36am

Gas wholesale prices seem too low to entice much extra shipping from Europe. We may end up paying a steep price for the anti-price-gouging witchhunt.

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ryvr on September 24, 2008 - 5:35pm

I was railing against the silly "gouging" claims a couple of weeks ago. If we had raised prices to $10 then, maybe it wouldn't be so bad now.

There are very few gas stations open here in Asheville, NC, and if a station gets a shipment, it usually runs out in a few hours, and they close. Lines are near a mile and winding around many blocks. Local newspaper is reporting fights breaking out. Restaurants and business are empty, and people can't get to work. Sure have been a lot of police sirens lately too.

I am having a lot of difficulty imagining the picture here if things get any tighter. It is hard to imagine social order would not break down completely.

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GreenMan on September 24, 2008 - 5:50pm

I googled up this little gem: http://www.wavy.com/Global/story.asp?S=9056750&nav=23iibbVz

Sep 23, 2008 08:19 AM

Three fights occurred Monday at Roadrunner Shell and management called police ... Station manager ... said people are panicked about the shortage.

Buncombe County deputy fire marshal Mack Salley said he's talked to local distributors who said they're sending trucks to get gas and they're coming back empty.

"Our deliveries have been at reduced rates for almost 20 days, so that's a long time not to be able to meet the market demand," Colonial Pipeline spokesman Steve Baker told the newspaper.

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goghgoner on September 24, 2008 - 10:01am

There is no place for the cargo to be unloaded.

http://customercenter.murphyoilcorp.com/index.cfm?show=803&product=DTNMK...

Market sources said about 32 gasoline cargoes were on their way to the New York Harbor from Europe, and nearly half of them were unsold. In normal circumstances, these unsold cargoes would be diverted to the U.S. Gulf Coast market since there's no storage space left in the Harbor.

To further compound this issue there are two storms headed along the East coast.

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indeolie on September 25, 2008 - 6:23am

there's no storage space left in the Harbor

So this really is purely a distribution problem then. Gasoline piling up in NYH unable to get to the Southwest. Explains why Euro gasoline cracks took a dive yesterday - little demand over here and the US physically unable to absorb excess barrels.

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BillJames on September 25, 2008 - 11:36pm

Logistics is a very complex task. Once routines start to come apart, the imbalance will likely cause more imbalance.

The wheels can come off the cart very quickly. And unlike financials, you cannot print more food and gasoline.

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Starship Trooper on September 25, 2008 - 3:37pm

We are finding gas at any given station about 5 out of 7 days in central NC and some gas stations limit pumping to between 8 and 10 gallons. On any given day in some areas away from the city centers you may have to go to 2 or 3 stations before you find one that is pumping. Pumps are busy but unlike Friday two weeks ago, there have been relatively few lines.

Buses are full or near full (I ride the bus most days and have noticed that we've basically gone from 3/4ths full to full (maybe 1 or two seats left) in the past couple of weeks. Fortunately, the schedules had changed recently to increase the number of buses running.

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EHT on September 25, 2008 - 4:03pm

Is there any policy giving buses priority for fuel? Of course, they are probably diesel, and I'm not clear as to whether the problem is the same for diesel fuel.

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Ben on September 25, 2008 - 4:19pm

Depends on which bus sytem we're talking about, but they probably have their own fuel depot with at least a small stockpile, if for no other reason than so they don't have to have frequent deliveries.

They don't have to line up at Shell like us little people :)

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BillJames on September 25, 2008 - 11:57pm

I did a study of current contingency plans for Lisa in Congressman Bartlett's office. The summary of this at roughed in at www.EconomicLifeboat.com. Basically there are plans, but they have not be practiced and there is no preparation to back the plans.

IEA Treaty requires plans. Most state plans note they will rely on price to ration fuel. That seems pretty stupid to me as we approach harvest season with very low grain inventories. It seems a better use of fuel to havest crops than to make sure police vehicles have fuel to control starving people.

The focus in Congress is on financials. When I briefed Senator Obama's staff last week on Peak Oil. They were kind to give me time and attentive. Their comment was they were aware but it could be managed. I recommended that if their are gas lines and $5.50 gas they reassess. He was surprised that there might be another gas price jump. He was a good guy, well meaning and returns phone calls.

At the end of July I visited and provided information to 70 Senate staffs. At the time opinions were split by party: Democrats: "It is speculators." Republicans: "We need to drill." At the time I provided them with a note on why to expect gas lines before and during the election.

I sent a message a week ago to expect these gas lines and to expect they will still be happening during the election. Only Senator McCain's person (Bud McFarlane) has responded with a positive commitment to work on the risks.

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Alakazaam on September 27, 2008 - 9:05am

Hello Bill - thank you for the informative post.

Interesting that Obama's group thought peak oil "could be managed". I suppose one must take one's victories where one can and at least it was encouraging to note that they made the effort to listen attentively to your message.

What I would like to know is at what degree of hurt do they propose to end voluntary austerity and implement their plan to "manage" the peak oil scenario? I also wonder what sort of plan they will endorse. So far - if I can generalize - it seems that the political plan enacted to get through this hurricane-induced shortage is: 1) BAU; 2) decrease environmental safeguards (early release of winter gas); and 3)don't let the market intervene to manage consumption (ie with price rises). I am curious to know when and how their plan might diverge from this one.

I'll admit that I am listening to your election from another country - so likely I am not hearing it all (lol). I haven't heard anything but the most vague plans to address FF scarcity. Maybe it is asking too much of electioneering politicos to expect them to come out with a plan for hard times that a lot of folks don't even believe will arrive. But tellingly, I think their messages - and therefore perhaps their plans - only involve ramping up or shifting the emphasis of current reliance on fossil fuel (drilling and clean coal) and evidence no major awakening regarding the part FF will play in future energy/chemical needs. That is what frightens me. If the plan doesn't have within it's basic framework an understanding that the use of FF will eventually come only at a price (economic/enviromental/physical) that we are unable to pay, then I believe it is flawed and at best only (very) short-term. Should I expect more? I'm not hearing it in our election either.

*sigh

Regards,

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