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Gas Shortages?: This Week in Petroleum - September 24
Posted by Gail the Actuary on September 26, 2008 - 10:00am
Gasoline shortages are starting to become a problem in the Southern US in areas such as Nashville and Atlanta. This week's "This Week in Petroleum" (TWIP) (included in its entirety under the fold) did indeed show a big drop in gasoline inventory as we expected, but we are still digesting the impact, keeping in mind that these are averaged numbers over four weeks--which of course begs the question of whether or not the full impact of the refinery outages we have seen are in these numbers or not.
In this post, I have prepared a few graphs to supplement this week's TWIP. We know that Hurricane Gustav and Hurricane Ike had a huge impact on refineries, and that these production shortfalls are now slowly making their way through pipelines. It is my view that because Texas refineries have been fairly slow to get back online, and because of the built-in lag due to the slow travel of refined products through pipelines, the present gasoline shortages are likely to get worse in the next two to three weeks.
The Department of Energy puts out daily reports on the combined impact of Hurricane Gustav and Hurricane Ike, found as this site. Usually, they contain information by refinery as to which ones are shut down, starting up, or operating at reduced rates. The graph shown in Figure 1 has been prepared with the following assumptions:
(1) We lose 100% of refinery capacity if a refinery is reported as shut down.
(2) When refineries are reported as starting up, 80% of their production is off line.
(3) When refineries are reported as operating at reduced rates, their production is low by one-third.
The amount of refined products lost because of the refinery shortfalls will hopefully be less than this amount because
(1) These refineries would not have been operating at full capacity, even if they were open, and
(2) Some refinery utilization can perhaps be shifted to utilization elsewhere.
One could make other adjustments as well. We don't know how accurate the 80% and 1/3 are adjustment factors selected above are. Also, if the real problem is a crude shortfall, there might be refineries elsewhere that are operating with reduced runs that are not near the Gulf of Mexico, so are not counted in the calculation.
Separate Louisiana and Texas Refinery Outage Information
Since the refinery information is published by refinery, it is possible to look at Louisiana (primarily Hurricane Gustav) and Texas (primarily Hurricane Ike) refinery shortfalls separately.
From these graphs, we can see that 23 days after Hurricane Gustav, Louisiana production is still not completely back on line, although it is close. Some of the recent reduced runs may be because of a lack of crude to refine, rather than because of a problem with the refineries per se.
Comparing the two graphs, we can see that Texas production seems to getting back on line more slowly after Hurricane Ike than Louisiana got back on line after Hurricane Gustav. It is now 10 days after Hurricane Ike, and there are still refineries shut down. The DOE report of September 23 reports that six refineries in the Texas City and Port Arthur areas with a total of 1.6 million barrels a day of refinery capacity have not yet been able to restart.
The same report also indicates that 995,684 barrels a day of crude oil production is still shut in. This amounts to 76.6% of normal Gulf of Mexico production. There are still shipping disturbances, which presumably affect our ability to import crude oil. The September 23 DOE report regarding hurricane impacts indicates:
As of 8:00 AM EDT September 23, vessels with drafts over 34 feet are limited to daylight transit only from Sims Bayou to the Houston ship channel turning basin. The Sabine and Neches Channel going into the Port Arthur area is now open to vessels to project depth for daylight transit and limited to drafts of 33 feet at night. Part of the Gulf Intracoastal Waterway (GIWW) in TX has re-opened, but it is still closed from mile marker 350 to 319 and has some closures in LA as well. The Calcasieu Channel into Lake Charles, LA is open to vessels with a draft of 38' or less.
Shortfalls of product
Even before TWIP has come out, there are reports of shortages of refined products. The September 23 DOE report regarding the impact of the hurricanes indicates that a large number of pipelines shipping refined product are operating at reduced rates, presumably because of lack of product to ship. One of these pipelines is Colonial Pipeline, running from Texas to New Jersey. Shortages of gasoline have been reported in Atlanta and Nashville, because of shortfalls of products from this pipeline (and its spur to Nashville).
Products move through these pipelines at only 3 to 5 miles per hour, with the average time to transport oil from Texas to New Jersey 18.5 days. Because of this slow transit (and the fact that the pipelines are not 100% full), the shortages now being felt in areas such as Atlanta and Nashville reflect shortfalls in refining occurring a week or more ago. Given the amount of refinery shortfalls shown in Figure 1, and the relatively slow rate at which they are declining, it is likely that the shortfalls in gasoline available for sale will continue for at least another two to three weeks.
My post on the impact of the hurricanes from a few days ago has a few additional graphs. A major reason the hurricanes are having such a significant impact on gasoline supplies is the fact that inventories were very low at the time the hurricanes hit.
Crude oil inventories may also be disturbed because of shut in Gulf of Mexico wells and difficulty in delivering overseas crude to the area. Crude shortfalls are less likely to be an issue than gasoline shortfalls, because with refineries closed, they are less able to use the inventory. Also, crude can be released from the SPR, if needed.
This week's TWIP report
Summary of Weekly Petroleum Data for the Week Ending September 19, 2008
U.S. crude oil refinery inputs averaged 11.5 million barrels per day during the week ending September 19, down more than 1.7 million barrels per day from the previous week's average. Refineries operated at 66.7 percent of their operable capacity last week. Gasoline production fell last week, averaging about 8.0 million barrels per day. Distillate fuel production decreased last week, averaging nearly 3.3 million barrels per day.
U.S. crude oil imports averaged 7.1 million barrels per day last week, down nearly 1.4 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.5 million barrels per day, about 1.8 million barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.2 million barrels per day. Distillate fuel imports averaged 199 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.5 million barrels from the previous week. At 290.2 million barrels, U.S. crude oil inventories are in the lower half of the average range for this time of year. Total motor gasoline inventories decreased by 5.9 million barrels last week, and are below the lower boundary of the average range. Both finished gasoline inventories and gasoline blending components inventories decreased last week. Distillate fuel inventories fell by 4.2 million barrels, and are in the lower half of the average range for this time of year. Propane/propylene inventories increased by 0.1 million barrels last week but remain below the lower limit of the average range. Total commercial petroleum inventories decreased by 17.9 million barrels last week, and are below the lower boundary of the average range for this time of year.
(Thanks to GS for bringing these to the comments...)
Note
I am writing this post in advance, because I will be traveling from Sacramento back to Atlanta today. (Great choice of destinations from a gasoline point of view!) Perhaps Leanan or one of TOD readers can post the latest report when it comes out.
One interesting calculation is the implied daily drawdown of gasoline inventories, calculated as the change in inventory divided by seven. If this is very high now (say 1,000,000 barrels a day), it is of concern, because it is unlikely to get much better in the near term, unless people in some areas are forced to go without gasoline for lack of product.
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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.
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.
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.
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.
I googled up this little gem: http://www.wavy.com/Global/story.asp?S=9056750&nav=23iibbVz
There is no place for the cargo to be unloaded.
http://customercenter.murphyoilcorp.com/index.cfm?show=803&product=DTNMK...
To further compound this issue there are two storms headed along the East coast.
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.
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.
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.
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.
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 :)
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.
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,
Al
There does not seem to be awareness of the degree of risk. Or, the risks like Al Gore are about Climate Change not Peak Oil.
But they were willing to listen. That may be a start.
Not directly related to TWIP, but important.
Complexity, Chaos, unintended consequences. A perfect storm of crash, decline, and...?
Credit crunch may delay Nabucco pipeline, Hungarian says
Cheers
Weren't they supposed to supply the new hanging gardens of Nebuchadnezzar the III?
Oh well, I guess they'll have just have to bring back the slave powered Archimedean screw, for irrigation...
I have a friend attends college in Atlanta. He's been openly skeptical of my frequent diatribes concerning the dire, up-coming energy crisis situation until he saw the ruinous effects that gas shortages are having, right in front of him.
In due time, such shortages will become the norm and the still-somnolent American population will finally start to wake up, but it will be far to late to do anything about it.
Supply is short in the Dallas/Fort Worth area:
http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/092408...
I was lurking on a baseball blog last night. A couple of people from western North Carolina started discussing the gas shortage. Apparently, it's pretty bad there. One guy was sleeping at his office because he didn't have the gas to get home. He tried, ran out of gas, and ended up pushing his car off the road and walking back to his office. Another guy in the area had heard about a town that had gas, and last I looked, they were trying to figure out if he could get enough gas there to drive to the first guy's office and let him siphon some.
It gets worse: Kinder Morgan Shuts Texas Oil Terminal After Fire (Update2)
Looking like it was the pipeline west that will be most affected:
Kinder Morgan Extinguishes Texas Oil-Terminal Fire
There is one thing about the analysis that I don't get though. When the pipeline is shut down, isn't it still full of product? The problem is just that they don't have new product to put in down in Houston.
So when it gets restarted, you don't have to wait weeks for the new product to come out the other end, it starts to come out as fast as you get the product moving. Which could take a little bit - the mass of a thousand kilometers of product in a pipeline is substantial, and I should think that it would take a while to get the velocity back up to normal, but it ought not take weeks..
The petroleum products are pushed through the pipelines by the various pumping stations along the way, which is why all the energy is needed to run pipelines. It is not like the pipelines are 100% full.
I do not have experience with Common Carrier type pipelines but unless someone is using pigs to push product out of a section of pipeline the pipe itself will remain full. Without pigging the product will be trapped in the pipe section and inaccessible. Attempting to pull product out of a line like this in this type of situation could in theory pull a vacuum on the line and collapse the line.
How does a pig move without product behind it?
Try dangling a tube of lipstick in front of it.
Thanks to your comment, my keyboard at work needed replacing due to the shower of coffee that engulfed it.
:)
You can move the pig using product or some other fluid. Water or air could be used but they would be very poor choices. To drain a pipeline I would probably try to use an inert gas such as nitrogen to push my pig. This would however be expensive with large systems.
Injecting water would work, and it's not too hard to separate water from gasoline (water is denser) but wouldn't this cause a lot of damage to the pipeline? Corrosion in the Alaska pipeline network comes to mind.
Nitrogen or another inert gas would be great, but since it is compressible it would take an enormous amount to pressurize a long length of pipeline. I guess that can be done.
Injecting air is probably a bad idea, and I suppose oxygen would be a *really* bad idea when mixed with gasoline.
I wish someone in the business would tell us all how it's done...
I saw a show on the History channel several years ago. I'm not sure what they used to move the pig, but the pig was used to inspect the pipeline.
Try this.
http://www.pipeline101.com/
By the way I worked on the developement of pigs for pipeline inspection 40 years ago. They use magnetic flux leakage, eddy current, and sonic systems, and record corrosion data as they pass markers and welds on the pipline, using the fluid flow to move.
Thanks!
http://www.pipeline101.com/reports/Notes.pdf
was especially helpful. But it doesn't seem to explain what happens when there's not enough product to insert into the feed end of the pipe. Seems like everything would just stop...
"when there's not enough product to insert into the feed end of the pipe"
Probably a scenario that was never considered...
Cid Yama questioned me on this a couple weeks back.
The video at this site: http://www.pipeline101.com/Introduction/index.html states that
Since air is a fluid perhaps it can be used to keep volume moving.
Compressed of course.
I have another API call coming up on Friday. I will ask them for a better explanation.
I know I have seen the delay mentioned in newspaper articles, so I am not alone in talking about it.
You couldn't use air!
1/Its compressable (makes it like a huge rubber band)
2/Its 20% oxygen (not goot to mix with liquid fuels)
3/Its unlikely liquid pumps would work on it.
Water more likely
Neven
Is water doable given the concentrations of ethanol (which loves to stick to water) in today's fuel supply? Or is it not a problem after they've been mixed?
On the one hand you (or others) say that the "MOL" (minimum operating level) is what it is, in part, due to the need to keep the pipes full, or close to full. On the other hand you say that when product is available at one end there will be product coming out the other end only after 10 days or more. These claims contradict each other.
My interpretation of what this means (based largely on empirical observation of the current situation here in the SE) is that the pipes are not full, because we are below the MOL required to keep the entire system operating. So the side or spur pipelines are shut down. Hence the shortages in Nashville, Atlanta, etc. This allows the main pipeline to remain full and operating. Perhaps this is done on something of a rotating basis, like rolling blackouts. So my interpretation of the ten days is that's what it will take to 'refill' the entire system once the refinery output allows for maximum input to the pipeline system. But I have no expertise or knowledge other than my own observations and common sense, so I could be wrong here.
Thanks, clif...
I have been reading this thread, completely puzzled, until I read your interpretation.
I wonder just how much the flow RATE in the pipe can be throttled back? The pipeline must be full of product, but nothing in the laws of physics as I know it dictates how fast the product has to move. If Nashville receives product in a 30" line at 3MPH, could they not take some for themselves and pass the rest North at 2.9MPH?
I think more likely economic scenarios of the North ( the "Money Talks" thing ) dictate the gasoline goes North, in much the same vein as the 700 Billion "rich guy" bailout ( with loopholes for more ) being sought by the moneyed crowd will likely pass Congress... they feel they must bicker about it a bit so they can claim that they "fought" for the little guy, but in the end I expect their chubby little hands to emerge from their taxpayer bought suit jackets and sign over to the rich guys what they want.
Gail
How can a pipeline not be 100% full, It can flow at less than 100%.
They could flush it with water I suppose, Can anyone confirm if this is done?
Neven
My understanding is that the pipeline is more like a system of locks (like the Panama Canal) , rather than like a garden hose. But this could be completely wrong.
NO,...
http://en.wikipedia.org/wiki/Internet_tubes
Oh okay, I found a video that explains how the pipeline tubes work...
http://www.youtube.com/watch?v=EtOoQFa5ug8
It was my understanding that they just pump the product slower. So yes the physicaly pipe is full but only 50% (to pick a number) of potential is getting to the end user because the pipeline must be run at a reduced speed in order to keep it full.
Right, they need to keep the pipe full, a lot easier to push than pressurizing it with a gas. I'm sure there's some gas in there just to keep it pressurized, something for the pumps to "push on".
There must be valves at each junction point. In Colonial's case, the side spurs could be turned off (sorry, Georgia) while the mainline still sent product up to the Northeast.
I found an explanation in the Atlanta Journal Constitution as to why Atlanta is having such a problem now. The problem is that we use a special summer blend that very few others use. There isn't enough of that blend, and that is the reason for the localized problem.
We now have a waiver to use other types of gasoline instead. That should ease the Atlanta supply situation, but probably will tend to tighten the general supply situation.
Georgia has had a waiver since September 5, and renewed it on September 11 & September 22. It should be in effect until October 12. Not to say it wouldn't be worse without it, but I don't think that's a solution. It'll blow over eventually if prices are allowed to float with supply/demand, and they stop opening 'gas gouging' investigations.
http://www.ajc.com/opinion/content/opinion/stories/2008/09/26/clarked_09...
Here is what I believe will happen. I think that Gail's analysis is correct that there would be a lag, but not because the pipeline is empty. Refinery terminal tanks are now empty and they must be filled prior to sending batches of product to a pipeline (pipelines do not receive constant product supply from refineries, but batches of product). Batches are normally created every several days by fully operational refineries.
Since these large refineries have been down a while and they are not sure of any damage that they may have sustained, they will take at least 3 days, but probably more like 5 to 7 days to start up (during which time they will mostly recirculate hydrocarbons and not produce finished gasoline). It will take the better part of a week to 10 days before these refineries will be able to ship out batches, perhaps sooner if they can ship out smaller batches instead of waiting for a normal sized batch.
Retsel
I think that what you are describing here is what I am trying to measure when I look at the refinery shortfalls. There are four categories of refinery situations:
-Shut down
-Starting up
-Reduced runs
-Normal operation
Refineries seem to step through these steps in order. Occasionally, they get to normal operations and go back to reduced runs. I have interpreted that as perhaps being a lack of product to refine.
I would be interested in your opinion on the percentages of full operation to deduct for these conditions. Shut down is clearly 100% down. Starting up starts at zero, and gets to "reduced runs", whatever they are. I was estimating only 20% of full production during this period. I was estimating reduced runs to be two -thirds of normal production. It really depends on how these are defined as to what the percentages are.
I don't have any better suggestions for the percentages - I think that your percentages are quite reasonable. I only think that the reasons for the lag needed some clarification. It was a great post and I passed on the information to those who can make a difference with it.
Retsel
You also have to remember the combined effects of the shut-in oil and shutdown refineries. Since Gustav, the average shut-in oil has been about 1.1 million BPD. That's 1.1 million that either is not being processed or has to be made in some other way. Right now, it is not being made up because there is too much refinery capacity offline.
I live in Atlanta, and can attest to the fact that it's getting worse here. I've always detested long commutes, and now the fact that I live intown (that means inside the 285 loop here in Atlanta) is quite helpful.
That coupled with the fact that I telecommute two days and carpool with my wife the other three means that we can get by on our one tank for a month if need be. Looks like we may need it.
But for most of my more car-dependent friends and coworkers, life is getting more interesting (read frustrating) in the short run. Hopefully it will be a good wake up call, as many folks I know still don't consider energy to be a top 5 issue.
I just completed loading each days MMS shut in crude and NG data into xl for days 8-30 thru 9-23, 25 days. Total shut in crude is 28 MM Brl’s and NG is 139 MMM Cu Ft for the 25 days.
MMS provided no report for Sat and Sun the 20th and 21st so those days data value was extrapolated between the 19th and 22nd . In a few more days we will be short a quantity equal to 3 days of Crude imports and 3 days of NG production.
The current crack spread on a Barrel of gasoline is about $2 and about $19 on a barrel of Heating oil per the current futures price. If we use 45% of a barrel for gas and 55% of the balance for other products using a 19 dollar crack spread we end up with about an $11 gain on a barrel of crude. I don’t think the refineries can process crude for only an $11 gain per barrel. IMO I don’t see refineries increasing utilization to 90% or increasing product stocks until the product prices increase, and I haven’t even considered the loss of imports for the past 25 days. I expect crude imports to go way up in the next couple months and prices also.
I see live charts finally got their crude chart act together.
We shall see what EIA has to say at 10:35
Thanks for the great work Gail! Shouldn't we be approaching the time frame for maintenance and roll over from Summer blend to winter blend production? If I recall that normally causes utilization to decrease as refineries around the country slow down to change over. I don't recall the exact timing of this transition but it seems like it was end of Sept, begining of Oct time frame.
ej
That is right. I was thinking about mentioning it.
Normally usage goes down in September, because it is no longer the summer driving season. The changeover to the winter blend takes place, I think for October 1 start date. I don't really know how it works, if the changeover gets "washed out" by a hurricane. Maybe it takes longer to restart, after the refinery opens.
This year, some of the summer discretionary driving disappeared. It is not as clear that we would have had the same drop in the fall as in the past, if there had been enough product available.
The changeover to the winter blend takes place, I think for October 1 start date.
It's staggered, so doesn't occur all at once on a set date. The level of RVP allowed also depends on location. But I think the regulations have been waived in many places so winter gasoline can already be sold.
Probably time to repost my winter gasoline essay.
Knowing how problem leads to problem, shortage to shortage, what are the chances these shortages get deep enough that we don't quite work out all the kinks and we end up in a slow-mo cascade of shortages? One potential issue is that those caught up in the shortages may get into more habitual stocking up/hoarding?
Cheers
Any time you have persistent shortages, you know you have price controls, whether by 'conquest or consent'. In a free market, you do not have shortages, you have rationing by price.
http://www.lewrockwell.com/north/north655.html
This mostly sounds good, but the part about "people who place a high value on their time" is arrogant nonsense. People who are poor are hardly "people who do not place a high value on their time".
The essay does point out that there are advantages to rationing "by coupon" rather than rationing first come, first served. The main disadvantage to using coupons is that the rich, one way or another, will come to own a disproportionate share, and you're back to rationing by price.
So, maybe having everyone stand in line *is* a more or less optimal solution...
(My preference would be to free stations to charge the market rate, though.)
Let people sell their coupons and stations set their rates, and you'd have an effective two-stage process to redistribute wealth and prioritize needs vs supplies.
"people who place a high value on their time" is arrogant nonsense
I agree. In my experience, the higher an income one has, the more likely is that person to not have to punch a time clock, and to have flex time/sick time/vacation pay/'discretionary' days etc. with which one could wait in line, while still being paid. The poor, on the other hand, often have two (or more jobs), have to get home to take care of the kids 'cause they can't afford more for day care, and don't get paid if they're not actually working, so waiting in line is a huge hit to them financially. I have been in both positions in my life, much more the latter than the former, and it sucks.
Not that there was "a plan," but is it more palatable to TPTB to have spot shortages or $6.00+ / gallon gasoline?
In the case of shortages, you can tell people to carpool or stay home if they can't get gas for a couple days. Of course the hope is that it is temporary, because of "the pipeline" or "panic buying" or "the media" or whatever the excuse is that day.
If gas goes to $6.00, everyone will bitch when Exxon posts their next profit report. I don't think you can tell the boss "Gas was too expensive so I couldn't buy any." If it's available, you are obligated to pump some and get your hiney to work. Sell a kidney or something if you must.
Either way, everyone directs their anger at TPTB, so which would be considered the lesser of two weevils?
I agree. I think $6.00+ / gallon gasoline is worse, at least in terms of economic impact.
Gas prices north of $6 a gallon would inflict economic pain across the nation.
The economic damage associated with spot shortages, on the other hand, is mostly isolated to the Southeast. As long as prices stay low, the rest of of the nation hums right along as if nothing is wrong.
If disruptions are not brief, we could be headed towards nation-wide shortages.
Yes-what you have now is rationing (demand far exceeding supply at the sale price)-the Southeast takes the bullet for the whole country.
I'm reading comments on the net like Nashville's gas shortage was "last week," and is "easing." Not normal, but better.
Is this wishful thinking?
(things seem OK here, but I only have to buy gas about every three weeks or so, and have almost a full tank, so I haven't been trying to buy gas. But looking at gas pumps I see no bags on the handles nor "out of gas" signs.)
Most of these problems are not getting wide spread media attention.
This is in my opinion deliberate. Motive can be debated, is it to calm the public? Is it to hide the problem? Is it to instill hysteria in the public to make them more easily manipulated? Many reasons can be conjured. But when the "news" is reported there are 3 themes,
1. things are getting better
2. the problem was caused by hording - not really a shortage at all.
3. the supplies will be back to normal by next week,
but of course next week never comes, and the public is always living in today, so they don't notice these little details.
Something is going on, is it deliberate manipulation of public perception? I would say yes.
I went to a bright eyes concert in nashville the other day (via a pre-crash and highly irresponsible 4 hour drive from indpls which cost more than the tickets ;). at 10:40 on a Sunday night, every gas station was closed.
conor oberst is da bomb.
but im not sure if they just go to bed early around there.
Gail, Great post I read your other post on the hurricane impact yesterday, and I do think you are bang on in your projection of a sever gasoline shortage. A few things will result, with a few million less barrels, we should see a spike in the price of crude, and another implication could be more emphasis played on alternative fuels to counter the elevated prices. From your graph we see a decline in barrel production from us companies.. however its interesting to note that each decline inversely correlated with the price of oil. The real question is how do we as investors adapt to the upcoming changes to be in a position to either be hedged for the impact or benefit from the rise in particular stocks. For me I’m leaning toward the undervalued mining and oil companies, as this is only the trigger of an upcoming rally. I’ve been using some tips from this Canadian oil guru, Ian Campbell, you can look him up.. this guy’s done over 2000 business valuations including a lot of oil and mining companies… I was on his blog yesterday and he’s got this 17 part series o n the subject of how to value these companies.. He’s only done 3 so far, but they raised a lot of questions I thought were irrelevant, and also he indicates the impact of situations and issues discussed by Gail . If anyone’s interested his page is http://www.stockresearchportalblog.com
Great post. But why is the NYMEX price so low!!
Nobody has any money to buy futures. Look at the Louisiana spot price--much higher.
In this still unfolding situation, what is our definition of a "gasoline crisis"? Right now, we're seeing wildly differing situations east of the Rockies. There are numerous reports of tight to very tight supplies in some SE cities, while other places, like the NE, seem to be completely untouched so far. I don't consider that a "gasoline crisis" or a "liquid fuels crisis".
If we had virtually no liquid fuels available east of the Rockies, that would clearly be a "crisis". But where is the dividing line? Is it when vital services (food distribution, EMS, etc.) are impacted? If so, then by how much? (One missed shipment of Twinkies does not a crisis make.) Is it when more than X% of overall economic activity is curtailed (which would take into account both outright shortages as well as price increases)?
Personally, I'm not sure where that line is; the highly uneven nature of the impact so far implies that finding a reasonable definition will be problematic, to say the least.
By the way--TWIP just came out, and crude stockpiles are down 1.5 million barrels, and gasoline is down 5.9 million barrels.
I found a post over at PO.com by a trucker to be very illuminating with regard to this. The 'on the road' view of JIT delivery meets fuel shortages, so to speak: http://peakoil.com/fortopic45554-0-asc-405.html Not sure how to link directly to the post itself, so it's by the48thronin, 2/3rds of the way down p.28 of North American Fuel Shortage Reports, posted on 9/21 @ 10:35 pm.
Thanks, that's a great read, a bit frightening though. Better stock up on food and whatever else you need now.
Clifman,
The link you posted is about diesel supply, and about the outages that could occur in food and other things if there is even one day of diesel supply shortage. According to the poster, diesel is also getting to be in short supply in some areas. He transports diesel fuel by truck to truck stops run by Travel Centers of America. He says:
(emphasis added)
He indicates shortages could result in food not being available in stores and other essential goods being gone.
Gail,
I think he's not actually delivering the fuel himself:
But he's familiar with both the food and fuel delivery systems, and you're right about the scary point that he makes regarding the fragility of the former based on interruption of the latter:
It won't become a crisis until it reaches inside the D.C. Beltway.
Yeah that's true. Give it a week or two.
Right now, DC is running off of New Jersey and Baltimore's gas.
Most gasoline in the Southeast goes through the same major pipeline from Texas - LA, MS, AL, GA, TN, NC.
FL is not effected because they do not use that pipeline.
It is not a crisis in other parts of the country because they get their gas by other routes that were not taken offline by the hurricane.
Gas inventories down 5.9 million, total now 178.7 million.
The report
Refinery utilization fell to 66.7%. Weekly Gulf Coast crude oil inputs to refineries fell by more than 50% from 8/29 to 9/19--from 7.3 mbpd to 3.5 mbpd.
Total inventories down another 17.9 Million (complex)!
Gasonline at 178.7 MMB...that's got to be close to MOL.
Don't think the shortages are going to clear up quickly at this rate.
So when do they update the graphs here?:
http://tonto.eia.doe.gov/oog/info/twip/twip_gasoline.html
Well I did it myself and I'll tell ya it ain't pretty.
I think the graphs are updated at 2:30pm, or thereabouts.
Thanks
What is this chart telling us?
http://tonto.eia.doe.gov/oog/info/twip/gtdsusm.gif
It's labeled "U.S. gasoline oil days of supply". I would understand if it was gasoline days of supply, or oil days of supply, but I can't figure out what gasoline oil days of supply means.
If that chart was just gasoline days of supply, I'd say things aren't all that bad. We're only about one days supply lower than we were last October, which I don't remember being any great crisis.
(For what it's worth, where I am here in the northeast there doesn't seem to be any supply problems at all and prices haven't gone up since Ike)
Jim, it's mostly folks who are on the out-of-commission Colonial Pipeline/on the Gulf Coast PADD (and the southernmost part of the east coast PADD, plus TN from the sounds of it) that are going to suffer shortages, except for those on the fringes who can have it trucked in relatively economically.
Heres is the drivers dilemma.
From Knoxville to Asheville,or vice versa , you have a very long trip thru the mountains. There is fewer stations along this part of I-40. So if you left Knoxville and were traveling east to Asheville and were expecting to get fuel in Asheville? Then you might be in a great deal of trouble due to the extreme shortages,or at least was so when I traveled thru this area this last Sat and Sun.
I tried to send this message over the CB radio but now days not many people use the CB anymore. Truckers even are not very active...so it was like I would be shouting in an empty barrel.
As we traversed this area I felt sorry for those who would arrive in Asheville and find zero gas available.
So much for community and communications. It starts to be "each person for himself" then. At the pumps this is made very very clear.
I see a very bad moon on the rise. Even in my small town and the next there were altercations and scuffles on the aftermath of Ike.
Then the storms hit with a fury out of hell. We are still recovering slowly.
Airdale
They're still communicating, they're just using different methods. Instead of CB radios, they're using the Internet and cell phones. Twitter seems to be how people are telling each other where the gas is.
Many truckers abandoned traditional "11 meter CB" standard channel 1 thru 40 and either doctored their radios or bought 10 meter band. Another portion went to 2 meter and use the existing repeater system to communicate long distance while rolling. And of course Leanan is correct, internet and cell phone for personal comunication. Most commercial drivers have a PC in the cab and recieve instructions and confirmations from employer via sat links.
Iam not a prof mule skinner, even though I have a class A CDL with doubles, triples, tankers & hazmat...
But I play one on the internet.
I think we are *already* below the MOL. I suspect that a major part of the problem is that problems are flowing to the weakest points of the scheme...as in we have enough tanker trucks to keep normal supply going, but not enough to actually build supply.
I also think that the price controls on gas has been a ruinous strategy. Price gouging in the beginning would have dropped demand enough to avoid a sharp dip and allow for a shallower dip that doesn't load the energy infrastructure as much and means quicker genuine recovery.
Actually, wouldn't inventory build if we had *fewer* tanker trucks making deliveries? In other words, don't we need some degree of forced conservation via regional outages for inventories to come back? If all stations were being supplied, inventories would draw down even further.
I think gas stations are being resupplied at a price which is artificially suppressed (through two mechanisms 1) dark liquidity suppressed near-futures price and 2) gas stations fearful of passing on 'spot' costs due to the threats of state attorney generals.), which is drawing down inventories at a much more rapid pace than you would find in a true free market. In a free market, the increased spot price would be quickly passed on to the consumer (ie. $5-7 gallon in the Southeast), resulting in demand destruction and slowdown in inventory depletion and 2) the Oct 08 delivery contract would be rising in price rather than being $1 below spot.)
Ultimately the results of this artificial manipulation will be a sudden and rapidly worsening gasoline supply shock.
You don't need fewer tank trucks nor to you need forced conservation. All you need to do is let the market determine the price of gasoline at the pump. You would pay more for a gallon of gas but then there would gas available. Markets are very efficient in rationing scarce goods. Educate your state politicians on how to end shortages.
Oh, don't worry about that - we here in the SE US have been made the designated region for the outrages, oops I mean outages.
that gasoline minimum operating figure of 170 mb is a myth. It came from a very old DOE report that hasn't been updated - I don't think anyone really knows what the MOL is but if we came close you would start to see some political mobilization.
Cornelius, what do you think is a more realistic number for minimum operating level?
I suppose that if we were at or approaching MOL for gasoline stocks, we would see shortages at gasoline stations, terminals and reduced deliveries from pipelines.
Whoa hang on a minute 178.7?
This is a new all-time low right?
Summary of Weekly Petroleum Data for the Week Ending September 19, 2008
The math just doesn't add up on that. Are they just assuming the pipelines are full?
"Are they just assuming the pipelines are full?"
It's my understanding that the pipelines are necessarily full, you don't have empty space or air in the pipeline but if there is no product to push through the pipeline, you can't take anything out at the other end.
One must look at the production numbers carefully. The EIA reports 4 week averages, so the full impact of the hurricanes isn't fully reflected in the numbers. I do wonder why the inventory numbers haven't fallen more than shown, given the known drop in production. Is it that the lack of refining capacity has offset the lack of production? Well, both gasoline and diesel stocks are quite a bit lower, but not as much as one might expect. Perhaps the shortages inflicted on the Southeast have kept the stock draw down to a minimum. What a mess!
E. Swanson
Or the government could be lying about the numbers. They lie all the time about the CPI, they lie about the unemployment rate, why not lie about the gasoline inventories.
My government? Lie?
Surely you jest.
Has anyone else thought it amusing that if you google "gas shortage" the first web hit is "There is no gas shortage" and the date is 1st April?
http://www.guardian.co.uk/business/feedarticle/7824487
Here we have a case of accurate information on TV causing panic buying, so I guess thats why they aren't covering it much. It sounds like it would make things a lot worse if they did.
I wonder if some places could not report on inventories last week, due to hurricane damage (personnel or equipment not available), and the EIA either skipped those places from the sample, or assumed their inventory has not changed from the previous week?
I notice this.
And the the price is still high. The demand has fallen a little bit by I expect the price to rise as soon as US catch up.
Does anyone know what has changed so dramatically YOY re the ratio of conventional gasoline and blending components? Conventional gasoline inventories down 23.7% YOY would definitely imply shortages.
IMO, Low/No oil processed at the refineries...lots of ethanol waiting to be blended.
More E85 would use up some of this buffer in these kinds of times...possibly.
Here's my opinion: The banksters are CAUSING shortages. The futures price should be rising but it's not because 1) JP Morgan is using OTC 'dark liquidity' derivatives offset with futures market positions to hold down the price of the Oct 08 contract 2) Gas station owners are afraid of being charged of 'price gouging' by state attorney generals and so will not raise their price thus inventories keep getting depleted.
There should be rationing by price but this is not happening because it is not a free market.
What is "dark liquidity"? Similar to dark matter? Why, would banks want to cause shortages and hold down futures?
PDM
Ethanol
http://tonto.eia.doe.gov/oog/ftparea/wogirs/xls/psw04.xls
(scroll down)
Gulf Coast PADD is down 5% on stocks and it accounts for pretty much the entire drop in stocks...
CNN has an "I-Report" map of gas shortages.
If you zoom out, you can see they're clustered pretty tightly in the central southeast.
That can't be quite right. there are gas shortages in Alabama, Floribama, and maybe central Texas as well...
No shortages in Miami or Maryland, though, which is interesting to me...
They are trucking the DC area gas in from New Jersey and from Baltimore (I have talked to three gasoline truckers).
We're still experiencing shortages here in Tallahassee, with a noticable shortage of premium - the refineries that are operating seem to be producing diesel & regular only. Although most of Florida is supplied by sea (ocean-going barges, I bet), we get some supply from a Colonial Pipeline branch that terminates in Bainbridge, Georgia (in the extreme southwest corner of Georgia). So, it appears that the means of supply correlates some with whether there's a local shortage or not.
Your Ag Commissioner blamed the shortages on panic spread by bloggers!
Right - I suppose we should forget the bloggers and simply rely on the Ministry of Truth.
Speaking of which, only two or three twitter posts about #nashvillegas in the last day. Most are repeats of the same post (Home Depot has gas, no lines)
Looking for "gas shortage" in general, today seems to be North Carolina, with Atlanta being a close second. Looks like Raleigh has gas, Charlotte does not.
I trust twitter more than CBS and NBC combined :)
Edit: Google has finally updated. Here's the latest info. I'll leave the previous rankings below for comparison. I've also graphed Atlanta, Nashville, and Asheville individually. Looks like the situation has eased a bit in Nashville as some have reported (someone said "Whack-a-mole") but is getting much worse everywhere else
Click to go to Google Trends
===Previous info below===
Google trends is a good source of info as well - when it's actually working properly. The graphs haven't updated for a couple of days (stuck on 22nd) now but the cities and regions ratings have just updated (presumably with more recent info) so maybe the graphs will update soon as well.
Anyway here's the top 10 regions by searches for "gas|gasoline shortage" (gas or gasoline shortage) in the last 30 days.
Regions
1. Tennessee, United States
2. Georgia, United States
3. South Carolina, United States
4. Alabama, United States
5. North Carolina, United States
6. Kentucky, United States
7. Missouri, United States
8. Florida, United States
9. District of Columbia, United States
10. Ohio, United States
Cities
1. Nashville, TN, USA
2. Arden, NC, USA
3. Atlanta, GA, USA
4. Charlotte, NC, USA
5. St Louis, MO, USA
6. Raleigh, NC, USA
7. Orlando, FL, USA
8. Washington, DC, USA
9. New York, NY, USA
As mentioned above this data may still be a few days old.
The premium normally travels through the pipeline in a batch near the regular gasoline batch. And they mix together a little bit at the edges, and so the mixture is usually also sold as regular, (since it isn't premium anymore.) How much mixes is determined by a lot of things, but one of the big ones is time in transit. If the pipeline has been turned off, (say, pumping stations lost power or something,) then quite a bit of it could have mixed, and then less of it would be available at the other end. The good news is that the regular is actually a little bit better than average, and newer cars that need premium automatically alter their timing to compensate for the regular gasoline, so...
Not that that explains Tallahassee. I think your supply does come by barge...
Some does come by barge, but a photospread in the local rag showed a tanker driver making a delivery at a station. He was quoted as saying he was going back to Bainbridge for another load...Bainbridge appears to be a spur pipeline terminal. So at least some supply comes via pipeline. No idea what the percentage of each supply route is.
Miami gets their gas by ship, not the pipeline that runs through GA from Texas.
Maryland also gets theirs from other sources.
It is just those states between Texas and Virginia that are most effected.
Maryland here. We had prices well above national average following Katrina. Most assume that was because of well-publicized problems with the Colonial Pipeline.
So, why no price spike or shortage this time?
(1) Imported product having a bigger effect this time than last, suppressing prices.
(2) Oil companies keeping wholesale prices down (there is an election coming up). This requires allocation of resulting shortage to the intermediate branches of the pipeline.
(3) Other.
please folks, help us spread this great work by Gail and others around, whether on linkfarms like metafilter, stumbleupon, slashdot, reddit, digg, name it. it helps, believe me. thanks.
Oil rises near $108 as investors eye supply drop
Why did my earlier comment disappear.?.
Here is my response to a response to my earlier comment:
I hear ya, Rockman,
But I think after next week's inventory report that reflects Ike's lingering effects, we will see a return to balance in our stocks since both imports, refineries and domestic crude production will jump by at least .5 mbd, 1 mbd, and .5 mbd respectively. One difficult thing is distillate inventories will probably remain low, which could hurt if the Fall gets cold early.
And another is if refineries jump production faster than crude flows increase -- which could bring crude down way below last December's average ~286 million barrels. It's gonna be an interesting 4th quarter...
http://slashdot.org/firehose.pl?op=view&id=1202381
Dirtier-burning gas OK’d for metro Atlanta
They leave the reasons as to why the sour gasoline is banned in the first place until the very end of the article: Atlanta has a HUGE problem with smog. Usually September 30th marks the end of smog season, so maybe the decrease in air quality won't be as bad as if they had done this earlier.
An interesting side note to Atlanta's air problems. I recall that decades ago, when air quality control issues were brought to the forefront by the feds, Atlanta had to be granted an exception to the nation standards. There are so many hardwood tress in the area that the hydrocarbon released from the trees alone almost exceeds the standards. Just one of nature's little practical jokes I guess.
There are two issues here, one is that the isoprenes emitted by the oaks create more ozone in combination with NOxs from vehicle emissions than just from the emissions themselves:
This is from an older article I found just googling around.
The second issue is that Atlanta has some of the highest levels of vehicle NOx emissions in the country, since Atlanta is basically the poster-child for sprawl (along with Los Vegas) and almost no mass transit besides bus lines.
Atlanta does have a decent electric rail mass transit system - MARTA - with 38 stations, 48 miles, four lines, and about half a million riders per day, but since the city is so sprawled out, it's not something that most people can use for their complete commute. I bet it's jam-packed right now. And yes, Atlanta is the poster child for sprawl, although I nominate Tampa/St. Pete as the most pedestrian-unfriendly city, at least that I've ever seen.
MARTA is really a sad excuse for a rail system. Basically it is one big cross N-S and another E-W. People have to use a bad bus system or drive to park in massive collector lots in order to get to it.
The planning of Atlanta was horrid--roads are paved cattle trails instead of a grid system. The sprawl is amazing. No doubt shortages could hit that town hard.
It's true I wasn't thinking of MARTA, but it's also true that it is a sad excuse for a rail system. I only use it to go to the airport, and a lot of people aren't so lucky to live close to a station. The system is woefully underfunded for one thing, and it also has faced some hostility to expansion before: the same county that brought you the "evolution is just a theory not a fact" stickers on biology textbooks AND was Newt Gingrich's home district, Cobb county, voted against having the marta expand northwards because they were afraid that the poor people would ride the marta up north and then rob them of their televisions and other goods. (I'm being flippant here, thievery is a big problem in Atlanta like any other big city, but I don't think mass transit systems would encourage it too much.)
On the brighter-side, the greenbelt is a planned light tram line/park system that is supposed to go in a circle around Atlanta. If it doesn't get ruined by the concrete and asphalt lobbies, and it actually gets built, it might be nice.
Yeah, I was amazed by the political opposition against the MARTA extension, because really, if the police of a town can't bust a gang whose modus operandi is to use public transportation for getaways, then the police and the citizenry are just too stupid to live.
That describes much of Texas. Hell, I-35 is just a glorified cattle trail.
Hey, MARTA's not like the New York subway, but I was able to live in Atlanta for years through a combination of MARTA and my bicycle. As for the planning of Atlanta...what planning?
MARTA wasn't planned with where people want to go in mind. It was planned with where there might be land available to run the trains. If it didn't happen to go near much of anything, what difference did that make? Build it and maybe businesses would come, except the areas were already built up.
MARTA was built where it was cheap to build, and not to serve existing "sources or destinations" of passengers or even much thought to future TOD.
Arlington Virginia paid the extra cost (perhaps $100 million in 1980s ?) to have the Orange Line routed below where they wanted development instead of a highway median. Massive development that has significantly lowered property tax rates (TOD is very cheap to service and has high valuations, hence lower tax rates).
Past Arlington, the Orange Line went into the highway median and no TOD effect, people just walk from the station, across the Interstate to waiting buses and massive parking facilities.
Miami had a similar line, but once Miami voted for a massive expansion, TOD suddenly sprang up around the existing stations (locations ignored for two decades). In 2004, I counted 15 of 23 cranes within 3 blocks of a Miami Metro station. All it took was a commitment to expand into a truly useful system and TOD was built.
Best Hopes for MARTA expansion,
Alan
It does seem odd that there is not a rail station at the baseball stadium. Your only options are waiting to be packed into a shuttle with a bunch of drunks, or walking about a mile down MLK dr...
Plant and tree produced volatile organic compounds (VOCs) are spread out all over the world, whereas human produced VOCs are concentrated in cities. Even if only 10% of worldwide VOC emissions are in cities, I would imagine that city and suburban VOC levels would be much higher than forest levels on account of the small amount of land area that cities occupy, concentrating our 10%.
Great!!!!! NOW people with asthma and other ailments will have trouble breathing in Atlanta!
Southeastern U.S. sees widespread gas shortages
Running on fumes and fear
More refineries press restart button
Gas Shortages Plague Southeastern U.S.
Georgia: Dry pumps avoidable with quicker response
North Carolina: Officials 'shaken' by citizen calls over gas
North Carolina: Gas crunch continues, analyst says normalcy still weeks off
North Carolina: Suppliers search farther for gas
North Carolina - Q&A: Fuel shortage predictions vary
EPA Approves Hurricane-Related Waiver for Georgia
Tennessee: If Gas Crisis Worsened, The State Has A Plan
Wow! What a plan!!! These guys are like logistical savants!!! We should put them on the Wall Street bailout, too!
(I was trying to figure out whether to start the water boiling first or fire up the grill--now I know who to call...)
U.S. gasoline inventories lowest since 1967: EIA
The EIA weekly petroleum report:
Total crude plus products stocks (including the SPR) were down 19.3 million barrels. The SPR was tapped to make up for reduced oil shipments and production.
1,669.9
-1,650.6
-------
19.3
That is 3.8% below year ago stocks. Remember consumption has declined and may decline further with the worse recession in decades setting in. A problem with this recession is that inflation might is expected to work its way through the economy.
Gasoline Consumption has declined ~2.6% YOY. But the problem is not a shortage of crude oil... the problem is a shortage of gasoline...
http://www.bloomberg.com/apps/news?pid=20602099&sid=a9l1n6YAJrTE&refer=e...
Our energy secretary
Does this guy have a clue?
``I think it was an anomaly,'' he said.
I think he was correct on the short squeeze analysis.
Just returned to Dallas from the ASPO conference. My cab driver told me that he has been to several stations in the Dallas area that were out of gas. When I got home, I told my wife to make sure she topped off when she got out. She did, but said that the station had no premium grade.
Truckers Lined Up Waiting For Gas
http://www.wctv.tv/news/headlines/29716134.html
If you can make it work for you, I highly recommend getting an electric scooter. I bought one and have only used the SUV once in the last month and spent just a few dollars.
Mine goes 60 miles. There are communities where people are modifying these for more speed and range:
http://visforvoltage.org/
If we are going to have further problems like this, it's nice to have a Plan B
Electric scooters are a lot better than gas scooters, but still have a few issues: if/when the grid becomes unreliable, they will go nowhere, unless you have a solar charger. Also, a lot of the current scooters rely on lead acid batteries, which only last about 300 cycles (at best) before needing replacement. I expect that battery supplies will be harder and harder to come by in the future. You can get fancier batteries for scooters (like LiFEPO4), but due to the high power requirements of scooters, this is a very expensive proposition.
These factors are not true of electric bicycles, which always have a backup: you can pedal them. Grid goes down, or out of charge? You can still get around. Also, due to the lower power requirements of e-bikes, it is more economical to use an advanced battery technology like LiFEPO4, which if from a good supplier, can last for many thousands of cycles (it still isn't cheap, but it is more within the range of many people).
Last but not least, there are many new kinds of cargo-carrying bikes on the market, that allow you to use a bicycle for groceries, kids, etc:
Xtracycle.com
yubaride.com
madsencycles.com
and a great article here in salon: http://www.salon.com/mwt/good_life/2008/07/24/sports_utility_bicycle/ind...
Of note, I am on a mailing list of these sports-utility bike users. Anyone who wants to be prepared for a crisis might like this quote from someone on the ground in Texas after Ike:
(from http://groups.yahoo.com/group/rootsradicals/message/6947)
Morgan
I know fer sure no TOD readers would ever "hoard" gas and I shudder to imply such. But just for giggles...
Iam sure everyone here is familiar with the product "Sta-bil" which when used, can prolong stored gasoline for extended periods.
http://www.goldeagle.com/sta-bil/index.htm
But, I want too add that the use of "denatured alcohol" can prevent or even cure a host of problems associated with old or bad gas. Seems that quite a few people are complaining of poor quality gas lately. Do yourself a favor and purchase some....just for giggles of course. The most prevelant brand is "HEET" and make sure you get the YELLOW bottle (not the red).
http://www.goldeagle.com/heet/index.htm
If you are frugal (read cheapskate) like I am...buy it in large quantities from hardware stores who sell it too painters as a paint thinner/remover.
Works as a fuel injector cleaner, raises octane, cleans lines and displaces water in tanks and lines.
Keeps fresh fuel fresher longer then just Sta-bil alone. Also keep tanks used for storage as full as possible "WHILE STILL ALLOWING FOR OUTAGE" or also known as "expansion" (5 gallon tank leave min 2/3 quart) up too a (250 gallon tank leave 7 gallon free space) and fuel will last much longer.
I know nobody on TOD would even consider hoarding fuel so forget I mentioned anything...mod can delete or edit.
I'm not sure what the premium for non-denatured ethyl alcohol is, but if it isn't too much, it's probably a better idea to store that then denatured ethyl alcohol (5% benzene + 95% ethyl alcohol I believe).
Ethyl Alcohol is only slightly toxic (fatal dose is on the order of a cup, and smaller doses produce no long term harmful effect unless the exposure is chronic), but the product used to denature it is quite toxic (on the same order of toxicity as gasoline).
I dont plan on drinking the stuff, Iam using it to improve gas storage longevity and alleviate the bad effects low quality or older gas has on internal combustion engines. "DRY" gas is a misnomer, its neither dry nor gas, its denatured alcohol. Denatured alcohol is sold in paint and hardware stores to thin paint, its sold in auto stores and truck stops to displace moisture in fuel tanks and fuel lines.
Alcohol is one of those things that seems to stick around on the shelf forever, just like old paint cans and paint thinner and the likes. I'm just not very fond of highly toxic products sitting around on the shelf indoors.
Your government just bought a shtload of "highly toxic products" that have been "sitting around on the shelf indoors"....HA! and you went along for the ride.
Hoarding is one of the most obvious "tragedy of the commons" behaviors, and it allows some degree of price competition for this gouging-phobic market.
If you have extra money that you would be willing to pay to get gas in a price-rationed scenario, you can do it yourself by buying storage containers and planning ahead in a first-come, first-serve scenario by being early to be "first". It costs you more, since you not only pay for the fuel but storage for it plus Sta-Bil (and an amortized chance that you'll end up discarding it someday unused), but you get extra fuel that somebody who was pinching pennies might not. My estimate is that the resulting gas costs a bit more than $5 per gallon for me...not a bad hedge, all things considered.
I think Huntsville is an interesting case. It has perhaps the largest population of engineers per capita in the country, or close to it anyway, plus a good fraction of low-income jobs. From what I can tell EVERYBODY ran out to fill up their cars as soon as the first shortage-rumors started up in Nahvile, both the well-educated engineers and less-educated people as well. For a while there was an expectation that the city would run out of gas for its buses, creating a double-tragedy, although the individuals mostly got what they needed if they waited in line.
In any case, most engineers could envision a better rationing scheme, but given we have the market mechanism we do, they will act "rationally", not "socially optimally".
Some stores are still out of all but regular, but there does seem to be enough fuel. Maybe there always was, except for the run on the pumps syndrome. Or maybe another round of shortages is coming. I guess I should top-off and get a few more 5-gal cans while they're available.
Does anybody besides me think it's ironic that Bush's speech is trumping the Black Gold special?
Right.
Storing even small amounts of gasoline is incredibly dangerous, however PRI-G would be the gasoline preservative of choice.
http://www.priproducts.com/prigproduct.htm
The best storage container, IMO, is a seldom driven SUV.
with what money?
(like jon mayer... not afraid of impotence)
Pemex Shuts in 250,000 Barrels of Oil Output on Reduced Demand
I don't know if this has been mentioned but there was a large fire at the pumping station in Houston, it was near the manifold where supplies are put into different pipelines. The Colonial pipeline was taken offline and is expected to resume operation in 2 days - heres Reuters take on it.
NEW YORK, Sept 24 (Reuters) - Kinder Morgan Energy Partners(KMP.N: Quote, Profile, Research, Stock Buzz) said on Wednesday it expects to resume supplying oil products to the Colonial and Explorer pipelines within the next two days, after a fire at its Pasadena, Texas terminal.
The company's facility at Galena Park, which serves the Longhorn and Magellan pipelines, was not affected by the fire late Tuesday and was currently operating, Kinder Morgan said in a release.
"The manifolds serving the Colonial and Explorer pipelines are on the opposite side of the facility and have been temporarily shut down, but the company currently expects to resume operations at those manifolds in the next 24 to 48 hours," the company said.
(Reporting by Rebekah Kebede; Editing by Marguerita Choy)
google "colonial pipeline fire" for more news - bloomberg has several stories on it.
At least Nashville's mayor is paying attention to the problem...:)
http://www.bubbleply.com/player.aspx?pid=35c56117-9bea-4ada-9430-9215420...
Here comes $500 oil...Matt Simmons
the recent drop in crude prices is an illusion
http://money.cnn.com/2008/09/15/news/economy/500dollaroil_okeefe.fortune...
the southeastern u.s. is being shortchanged on gas because they are going to vote republican anyway as they are religious. the republicans are trying to woo the northeastern states to vote republicans by keeping supply and price controlled.
That's exactly what I've been thinking. Up here in Massachusetts we've had zero impact due to Ike. In fact, gas prices just came down a dime, around $3.59 for regular at XOM, $3.79 for premium.
Take a look at Gas Buddy's map.
Notice that Georgia has rather high prices across the entire state, not just the areas near Atlanta where it's been claimed that the lack of the special low pollution gasoline mixture is the cause of the shortage. Georgia also has a rather low gasoline tax, as I recall, so the high prices across the entire state would seem to be very unusual. Look at the sharp difference between southern Georgia and North Florida. The same appears to be true for Alabama, although the prices there are a bit lower than Georgia's. Then, there's the big price drop between Noeth Carolina and southern Virginia, another very curious change at the border.
Don't forget that Senator Obama's campaign decided to pull out of Georgia a while back. Some of their paid staff moved to North Carolina. Not to worry, there's obviously no conspiracy in this democratic nation! The oil companies wouldn't dare screw an entire state, now would they? Do they really think that this bit of opportunistic price gouging would convince the voters to turn out for "Mr. Drill, Drill, Drill"?
E. Swanson
I don't think so. Why not screw over, say, NY or MA? They're not voting GOP, plus they didn't before, so vindictive types could exact revenge.
I think it's inherent in the infrastructure. The same thing happened after Katrina. The center of the southeast suffers the shortages first. They have less inventory than the rest of the country. (One article I saw said their storage tanks aren't as large. Perhaps because they haven't caught up with the booming population?)
There are ports along the coast where gasoline can be shipped, but the center of the southeast is dependent on the pipeline.
Come on Leanan...stop raining on a good conspiracy theory. If you don’t I’ll walk down the hall way to my Republican switching station and cut of supplies to your state too.
I don’t have the numbers in front of me but the suspicious folks might want to google “New Jersey oil refineries” and get a clue as to why the folks up north are not too dependent on Gulf coast refiners for the gasoline. As far as fuel oil goes, I don’t know if the situation has changed, but the largest refinery in the western hemisphere (Hess/Virgin Islands) ships its product via tankers to New England ports.
Sorry if the facts mess up the theories. Please do continue. We vicious, unpatriotic Repubs controlling the oil patch enjoy the attention.
Don't rain on my conpsiracy theory!!!
---
In all seriousness, just discard this petty Democrat / Republican nonsense, it is a false paradigm which is used to control the masses. We have much bigger problem on our hands.
As for storing gasoline, 1oz of Sta-bil / 2.5 gallons of gas I think will preserve gasoline for up to a year. And obviously gasoline is dangerous to store, you gotta keep it outside the house.
Ok Goldman...for spreading the truth I shall now cut off all gasoline shipments to your state. You have only yourself to blame.
Notice from the CSIPD/RN (Committee Supporting Increased Democrat/Repulican Nonsense)
Ah not the CSIPD/RN!!!!
I always heard the stories about you guys but I never believed they were true!!!
And exactly WHO told you about us?
Actually, I don't mind folks throwing out their political opinions. It's easy enough to just not read them. But lately, as leanan pointed out a couple of days ago, those opinions, especially the quit dogmatic ones, have badly cluttered the serious discussions. And being something of a smart ass myself, it's difficult, at times, to not waste some time taking shots at them even though I know it's probably pointless. But at times the humor of it all does offer some relief form the serious subject matters at hand.
that P's not funny, but it IS true..
what does it stand for? paradigmless?
*edited.
oh and what can you stand for without a useful paradigm?
*end political
Strav,
Thanks for catching my typo...I was distracted while counting all my petrodollars and burning puppies.
Goldmansachs: I shouldnt park my car in the garage? I think the cars gas tank 'stores' fuel. Also I have a natural gas pilot light on my gas fired hot water tank located in my garage. Am I living dangerously? The type of containers I use are fume free and I always leave "outage" or the basic priciples of physics as liquids expand when warm and contract when cooler.
I realise many who watched episode after episode of the (A TEAM) mistakenly believe a bullet to a gas tank will cause a horrific explosion...but alas...it aint so. "I pity the fools" as Mr T would say.
All long haul, over the road truckers are sleeping on top of no less then 500 gallons of fuel all the time. Unless of course they drive tanker fuel trucks! Then they are flicking their cigg or cigar ash out the window and the hot embers are hitting that huge mobile storage tank thats like the fiddler in "Fiddler on the roof" following them down the road.
I can assure you of first hand knowledge (with both hands) that this is all true. I know a guy who can drive a 757 (if the wheels dont leave the ground) full of explosives, smoking a Macanudu cigar, singing (poorly) Jackson Browne songs like "Running on empty" picking his nose and blowing farts into his airride chair, in a blizzard....while he's wearing flip flops and a Hawaiian shirt, holding a cup of joe in one hand
and steering with his knee. He's always searching for a shotgun rider to talk too and keep him awake...want me too give you a call?...errr.. I meant, want me to ask him too call you?
I was referring to the practice of storing gas cans in one's basement, which can cause explosions ignited by the water heater pilot light if fumes are leaking. That's all.
I definitely think the risk of storing gasoline definitely outweighs the risk of not having any fuel.
Ahh! Reread my post directly above, where I mention specifically storing gas in containers and having a gas fired hot water tank with a pilot flickering 24/7
untill the thermocouple calls for heat and the main burner roars on....wait a sec...Iam shifting gears and texting....there thats better....of course its dangerous to store gas incorrectly. But when done using a modicum of common sense, its no more dangerous
than....whoops...almost took out that funeral procession...doing anything else in life. Now I gotta get this rig to the motor city (Detroit) and back to the mistake on the lake (Cleveland) before my comic book (road log) gets funny...10/4 and all them good numbers too ya good buddy. Or as they say at Goldman
Shalom!
What a gross generalization!
NC is virtually even in the presidential polls, we have a democratic governor and many of us are not, "religious." Be careful with your sweeping statements.
"the southeastern u.s. is being shortchanged on gas because they are going to vote republican anyway as they are religious. the republicans are trying to woo the northeastern states to vote republicans by keeping supply and price controlled."
"I don't think so. Why not screw over, say, NY or MA? They're not voting GOP, plus they didn't before, so vindictive types could exact revenge."
ny and ma probably will vote democratic. pennsylvania and new hampshire could go either way. the election will probably be close. the whole south will certainly go republican no matter what.
This morning I told my fiance, I was 1) going to the bank and 2) looking for gasoline. I got the banking done in one mile drive time and 15 minutes. Errand number two took me on a round about drive that covered 16 miles to find a station that had gasoline, and 45 minutes of drive time and sitting in line idling. Mind you this was at 10:45 am when most people were working. I estimate it cost me .75 gallons of wasted driving and idling to get gas today. So let me do some back of the envelope calculating ( non rigorous, mind you) and estimate the following:
1 million Atlanta vehicles
2 fill ups per week
.75 gallons wasted due to shortage
So somebody help me here, but that puts the metro area using 1.5 million gallons of gasoline per week just to obtain gasoline. So if the shortage lasts three more weeks that is 4.5 million gallons wasted.
Petroleum exec wants football game cancelled due to Georgia gas crunch, guvnah says not just no, but hell no.
Is jet fuel in Atlanta in short supply also? How is it transported to the airport?
I'm a MARTA rider in Atlanta, its not bad as long as you work in buckhead, midtown, or downtown. The park and ride works great, I encourage others to try it. Haven't filled up for gas in two weeks :-)
very hard to separate the morons from their sports, I think its due to head injury or trauma suffered in childhood while playing sports, but I've always found it difficult to muster enthusiasm for a false premise played under artificial rules with a meaningless objective. But whatever keeps the mindless masses occupied in consumption, helps keep the capitalist wealthy and maintains the power structure.
Sonny is in Spain, I don't know if he is waiting for the collapse of wall street, or just shopping for an overseas bank account to hide his dough in. He's a lame duck and can't get reelected without martial law.
Save gas, most folks have no concept that there is even a shortage of supply, they keep thinkin its hoarding, like the MSM keeps telling them.
Gas is getting short here though, no doubt about it. Perhaps if a whole lot of folks get stranded in Athens (mostly college graduates - money well spent I'm sure) they will shake their indignant entitled fists at the political structure and get at least an odd/even rationing system in place. That or maybe they could start selling booze on sundays, so at least what we don't drink we can run in our cars.
Dude, you know they're both undefeated, right? :)
"Channel Two Action News" has quite a bit of coverage now of the gas lines around Atlanta (follow link from football game story above).
One reporter said that on any given day, only 10-20 percent of stations have working pumps. People are spending a lot of time driving around.
I had forgotten that they do this 4-week averaging. Some of the graphs do this, some of them don't.
You *can* however download the entire spreadsheet with unaveraged data going all the way back to when they started collecting data. For gasoline, the data starts in 1990. Up at the top of the page there is a link that says "Complete History XLS". Click on that and then open with Excel...
There are separate spreadsheets for crude, gasoline, diesel, etc.
As I look at the numbers, it appears that the tail end of the graph that the legent calls "weekly" is not averaged. The data to the left that the legend calls "monthly" is likely smoothed with a 4-week average.
How far below "worst ever inventory" are we by now, given the 178M current value?
I really wonder what MOL is, and how "soft" the line may be. If somebody from the gov't were to go on TV and say "we're right at the ragged edge, but don't worry, we'll be OK" and thereby started a run on the pumps, would shortages instantly spread nationwide?
The MOL ought not be a single number for the whole country. The West Coast for example is pretty isolated from the Gulf Coast, and it would be hard to bring significant amounts of gasoline from the West Coast (even if they had spare stocks).
EIA breaks down the numbers into stocks in 5 regions in the country, so I suppose it is natural for us to use the same breakdowns that the EIA uses. So what then is the MOL for the Gulf Coast? What is the MOL for the East Coast? Etc, etc..
So where does thus data reside?
Here: http://tonto.eia.doe.gov/oog/info/twip/twipmgvwall.xls
Link is on this page up at the top: http://tonto.eia.doe.gov/oog/info/twip/twip_gasoline.html
Thank you.
From the graphs, there is no indication that stocks are slowing their slides, though production is not really that low versus historical low-points. I assume the troughs in the graph indicate change-over or maintenance periods, and those appear to be aligned with previous high stocks, when such low production was easily tolerated.
Is there any accurate measure of what MOL for each PADD really is? By the looks of the graph anywhere on the East Coast or Gulf PADDs could be at imminent risk.
I went through the spreadsheet. The stocks for Gulf Coast haven't been this low since Sept 1997.
I don't remember what was going on back then. The Google machine suggests that hurricane Danny coupled with guerrilla activity in Columbia may have been responsible for the drop in stocks back then.
Here in Asheville, North Carolina people have been in "crisis" mode over the shortage of gasoline. Currently 80-90% of the stations around our district are dry and many of them have decided to close for the day on Sunday in an attempt to force people to conserve. We have had 1/5 mile long lines, people chasing tanker trucks to stations, police intervention into nasty fights in the lines and as of yesterday local governments and schools have gone to skeleton staff. The county had police protecting one station to keep fuel in supply for emergency vehicles.
People have been panic buying en masse bringing boats, gas cans, glass jars, drums, etc to fill up and now retailers are wising up and limiting the amount each customer can pump. It is alarming to see the lack of contingency plan for gas shortage situations. This is not a crisis, nor does it warrant declaring a state emergency in order to trigger NC National Guard or rationing. It does glaringly show the inability of people to cope with the challenge of conserving gas, and strike fear into the hearts of those of us here who know what is coming down the pike. The ignorance of the public about the reality of oil depletion and the coming permanent shortages combined with the total reliance on their vehicles is a recipe for a horrible situation, a glimpse of which many of us have seen this past week and know we are facing the same or worse over the next couple of weeks.
Gasoline shortages are starting to become a problem in areas such as Nashville and Atlanta. This week's "This Week in Petroleum" (TWIP) (included in entirety under the fold) did indeed show a big drop in gasoline inventory as we expected, but we are still digesting the impact, keeping in mind that these are averaged numbers over four weeks--which of course begs the question of whether or not the full impact of the refinery outages we have seen are in these numbers or not.
---------
Mobin
Promoter
Pipelines damaged as badly as during Katrina
From Chevron shift supervisor for a shut-in production platform. (I think I got title right).
From casual conversation in New Orleans,
Alan