Petrol Panic in the UK

According to the London Times, panic buying of petrol (= gasoline in the US) is taking hold in Britain in anticipation of protests by truckers over the high price of fuel (most recently elevated by European shipments of refined products to the US in the wake of Katrina). According to the Times:
EMERGENCY powers to reserve fuel for essential users will be reviewed by ministers and oil companies today amid panic buying at petrol stations across the country.

Dozens of filling stations ran dry yesterday after bogus reports of weekend panic proved self-fulfilling when motorists rushed to join queues at the pumps. Hundreds more forecourts are expected to run out of fuel by lunchtime today despite concerted efforts by oil companies to calm the situation by denying that there was a problem.

Doctors, nurses and police officers, among others, will be reserved supplies under plans by a working group involving the oil industry, police and the Department of Trade and Industry. A minimum sale of fuel could also be imposed in an attempt to stop people buying small volumes.

Public fears about fuel supplies and prices are expected to increase today as hauliers prepare to start protests outside oil refineries tomorrow. Overall fuel costs for companies were 39 per cent higher last month than a year before, the sharpest rise since 1991, according to figures released yesterday.

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The reaction might seem extreme to outsiders, but UK residents are remembering the last big set of fuel protests in 2000. According to a wonderful analysis by Public Safety and Emergency Preparedness Canada:

In September 2000, British farmers and truck drivers launched a dramatic campaign of direct action to protest a fuel duty. Their campaign followed a similar one by farmers, truckers, and fishermen in France, which had resulted in concessions from the French government. The UK protesters blockaded fuel refineries and distribution depots, and, within days, created a fuel crisis that paralyzed CI sectors and brought the country to a virtual halt.

The impact of the protest was much deeper than anticipated because it struck at a particularly vulnerable point of the UK economy -- the oil distribution network, which had been organized along just-in-time delivery principles. This, combined with anticipated shortages by fuel consumers and consequent panic buying, magnified the impact of the protests on practically all CI sectors in the UK. The disruption in the energy sector created a chain reaction among other CI sectors such as transportation, health care, food distribution, financial and government services due to their interconnectivity and interdependencies. The financial impact of the week-long fuel drought was estimated at close to £1 billion (approximately CAN$2.2 billion).

Things got ugly really fast, including spreading into the food sector:
Two factors reduced the availability of food for distribution during the fuel crisis. First, disruptions in the transportation sector prevented the shipment of food goods from producers to vendors. Similar to gasoline distributors, supermarkets rely on daily just-in-time deliveries rather than maintaining large stockpiles of goods. This mode of business proved to be highly vulnerable to transportation disruptions as there was very little stock to meet consumer demand when the supply of just-in-time goods was interrupted. Each day of the fuel protests further affected food deliveries, depleting the small reserves kept by supermarkets.

The second factor influencing shortages was increased demand and panic buying. The uncertainty of how long the fuel protests would disrupt food supplies caused consumers to alter their normal purchasing behaviour and attempt to acquire more goods than usual. The grocery chain Spar noted that its food sales had increased by 300 percent (28). The sight of empty shelves triggered some consumers to stockpile goods in sufficient volumes to endure a prolonged food supply shortage. Hence, by September 13 panic buying had commenced across Britain, some shops were bare of bread and milk, and a number of supermarkets began rationing food purchases (29).

Could be an interesting week in the UK. We can see why the Chancellor is jawboning OPEC to produce more.
Re: "We can see why the Chancellor is jawboning OPEC to produce more".

English-speaking people are in a wide-spread panic over petrol prices. How the mighty have fallen! Who is next?

OPEC should just produce more, oh my. There has been an oil-producing paradigm shift and not many people seem to get it. Simmons is always talking about Saudi Arabia, CERA sees increases across the board in the OPEC nations by 2010. The OLD WAY historically was when this cartel controlled the oil prices by withholding/flooding the market when it was out of balance. That was the 1970's, 80's and 90's. The NEW WAY is that they are mostly irrelevant to short-term needs for supply and only one (large) player among many in the long-term. When in hell are people going to figure this out? An historical shift has taken place, catch up people.
Well, I agree, of course. However, the political reality is that the Chancellor's course of action is rational for the Chancellor (and the Blair government). The best case for him is OPEC responds to his request (we don't believe they can), and the worst case is they don't but he gets to shift some of the blame to them.
Re: "the Chancellor's course of action is rational for the [him](and the Blair government).

Of course that's my whole point -- it is no longer "rational" to regard OPEC (and Saudi Arabia) as swing producers. We've seen Bush do the same with Abdullah just this year. So there is a fundamental disconnect between "political reality" and "oil reality" which serves no one.

On the other hand, OPEC President and Kuwaiti Energy Minister Sheikh Ahmad Fahd al-Sabah, who naturally we all love and admire, has repeatedly made statements that market prices do not reflect available supply -- which is abundant in his view -- so perhaps I should not heap all of the blame on the Chancellor.
It is ironic that the seven sisters (the real oil cartel until the '80's, despite all the OPEC bashing) were the Anglo-American oil companies.  Even today, it's the same seven sisters reduced into four--Shell, B.P., ExxonMobil, and Chevron Texaco--that dominate the industry(though at a smaller global market share).

So it would be a bit funny (with some poetic justice?) if the impact of this most recent "energy crisis" is felt most in the countries that brought the world the seven sisters and their notorious exploitations.

As far as I can tell, this is just a case of shortages caused by panic buying based on rumors (I should write rumours) of shortages! It doesn't really have anything to do with Peak Oil. Any commodity is vulnerable to self-fulfilling rumors like this.

Back in the 1970s Johnny Carson made a joke on TV that America was running out of toilet paper. People rushed to the stores and stocked up to beat the shortage, and sure enough, stores ran out. Shelves were empty for weeks despite Carson's attempt to explain that it was just a joke.

I guess that means we were hitting Peak Toilet Paper back then, huh? Talk about the collapse of civilization...

The real connection to Peak Oil is the dramatic steps that people will take when confronted by high fuel taxes prices. There aren't just rumors of shortages: There are real threats that truck drivers will blockade oil refineries, preventing petrol from reaching stations unless the Chancellor cuts the tax on petrol.

The same thing happened five years ago, and it really did cause widespread shortages. (People had to abandon their cars hundreds of miles from home and catch a train or plane back: The airports weren't affected, as they have pipelines going to the refineries.) Unfortunately, it worked: Petrol tax has been frozen since, further encouraging car-dependence.

Humor appreciated. However, the reason people are panic buying is because of (accurate, rational) fear of protesters blocking refineries. The reason the protesters are planning to block refineries is to protest the greatly increased price of fuel. The greatly increased price of fuel may well be a symptom of approaching peak oil (or it may not, depending on your beliefs). The way UK society responds to these greatly increased fuel prices is certainly of general interest for understanding the way they and others would respond to still tighter supplies in the future. So I think the connection to peak oil is pretty clear, if one believes we are anywhere near the peak.
Yes, this is panic buying, but it does indicates how fragile and capacity-limited our entire transport fuel system is. I don't consider having a full tank of gasoline to be anti-social hoarding, but the system can't support it short-term.

  1. Panic buying of gasoline is actually pretty limited by physical factors: most people will fill their tank, but not go to the extreme of filling additional containers. Hence, the panic buying is limited to about a half tank per vehicle or so. With toilet paper, it's easily possible to buy a lot if you're in the mood.

  2. There is a big potential problem out there. The UK had 31.2 million cars in 2003. Assuming they have an average 60 litre tank, half full, that's 936 million litres or 206 million gallons of unfilled tank space.

  3. The US problem is far larger: 210 million cars and light trucks. Assuming 20 gallon tanks, half empty on average, yields 2.1 billion gallons of empty fuel tank space. One of the big worries about Y2K was that people would all rush out and buy gas, draining the system dry.

We've built potential demand (gas tanks) that our system can't fill up even once. That's running on a knife edge, and it's consistent with what we'd expect to see near a peak.
But perhaps there is a relation to peak oil. As we come into peak oil, rather than there being an actual and pointed peak in supply, there's probably going to be a bit of an undulating plateau. The industry and governments will all be talking about how at the end of the next 5 year plan oil will be more than ever and we'll see prices plunging. But there will be a new 5 year plan each year, and politicians/corporations will never be called on the "Hey, didn't you say this 5 years ago? And aren't we producing less (or at least less than was predicted) now?"

In the time frame of the plateau there will be uncertainty in the prices. They'll generally go up, but there will be some dips. And there will be people protesting about the charges, and there will be local scares which become self fulfilling shortages.

I guess it's more a factor of "monotonically increasing price of oil" rather than peak oil. However, peak oil will have oil which just becomes increasingly expensive until there is more demand destruction than supply destruction. And demand destruction for oil seems to equate to a large societal change.

Well apparently since the last important fuel protest the govt. has trained a lot of army personnel to drive the oil lorries so there should be no shortages at all even if the protestors try to blockade some refineries. There are worries about gridlock if the truckers attempt a go-slow but of course people are as clueless about 'proper' news as they are about anything to do with oil depletion.
On that subject...there was a 20 minute piece on BBC Newsnight last night and the level of journalistic accuracy, insight, balance etc. was miserably low. They can report the queues at the petrol station with no helpful comment and so make the problem of panic-buying worse but they can't even begin to coverage oil depletion properly so that people can start to moderate their behaviour accordingly. When did the BBC start turning into Fox News?
This week I am decidedly a Peak Oil pessimist!
How many people are going to be buying electric vehicles as a corrective for fuel shortages?  Many people have short commutes and can use electric bicycles.  These are not only petroleum-free, they're mighty cheap.

Once people start saving that kind of money they may find they have better things to do with it than throw it at the pump.

From what I see around here, I think that folks are going for gasoline scooters or mountain bikes.  I was test-riding recumbents yesterday at a rural bike shop, and there was one electric bike sitting there.  I asked Doug, the fellow who was helping me, about them.  He said there hadn't been much interest yet.  Perhaps electrics will do better in the cities.

BTW, recumbents are not for me.  I started to pull across the road out front of the bike shop, but stopped halfway when a car came out of the dip to the right.  Fortunately it is a quiet road because I would have been run over by anything coming from the left.  I would have seen that car on an upright bike.

(Will someone fix this silly software so that focus isn't taken OFF the entry window at the moment the page finishes loading?)

I just had a conversation with someone tonight who was complaining about how much it cost her to fill up her vehicle.  Turns out she drives a Jeep Cherokee... a vehicle with less cargo space than the trunk of an old Jetta!  But she refuses to consider anything different because she wants to be stylish.

Yeah, bankrupting yourself and sending money to terrorists is making a statement, all right.

Britain has two advantages over the US. The taxes are high enough to make a difference by temporarily lowering them.  The other is they have a well thoughtout plan of priorities on fuel distribution when the real shortages kick in.  The neocons who rule the US have a pathological inability to plan for things that haven't happened before but are more likely as time passes.
Observations from the UK:

Today the panic buying will start getting really bad. Glad I use my car very little. The past few days have seen people panic buy. They did so because they knew fuel blockades were coming. Those actions start today. They involve trucks blocking refineries and motorways to prevent petrol stations being refilled. This is all done due to the high price and is therefore a consumer-manufactured shortage. A free-market reaction to price by those hit hardest: farmers and truckers. Hard to tell what the real supply levels are like. My feeling is that there is no more or less petrol than there was a month ago. Peak Oil is still a reality we need to accept and deal with. This all just further demonstrates how fragile our world is. Do we learn? Jury's out!

Ultimately if UK consumers all agreed to boycott all 'petrol' for one week our demands for energy alternatives and lower prices would instantly be accepted.

Consumers have the power to control the situation, not OPEC, not corporations. We are such fools.

Then again we have as much power as a heroin addict has over a heroin dealer.

We gotta kick this oil addiction.

Well done for a great site folks.


City Hippy

The diary of our struggle to live a green and fair life.