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Post-Ike gas shortage may take weeks to end

The current gas crisis is worse than the 2005 shortages after hurricanes Katrina and Rita, say some experts.

By Staff writer of The Christian Science Monitor / September 25, 2008


The effects of hurricane Ike largely emptied two critical gasoline pipelines that feed much of the South, leading to widespread panic-buying, shuttered pumps, and even some fistfights as motorists vied for precious drops of gas from Anniston, Ala., to Asheville, N.C.

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Although public officials called for calm, promising quick relief, experts such as Atlanta gasoline distributor Tex Pitfield said it could actually take another two weeks for supplies to ramp up.

That's because the widespread flooding and power outages that shut down 15 Houston-area refineries are not the only reasons why some 75 percent of gas stations in the region have plastic bags over their pump handles.

Getting supplies back on track has been made more difficult by more perennial problems – a shortage of regional refineries, an energy policy that demands nearly 200 boutique fuels to meet air quality standards, and a tangled middleman distribution system of gasoline "jobbers" seen as a weak link in the government's ability to control the economy's critical fuel link.

"The whole situation does point up the need for additional refining capacity in the country," says Ray Perryman, a Waco, Tex.-based energy economist, in an e-mail. "Even in a time of moderating demand, we do not have the ability to overcome even the interruptions that are inevitable. I am not sure I would call the frailties new, but they have certainly been brought into sharp focus."

Veteran oilmen said the crisis outpaced the 2005 shortages after hurricanes Katrina and Rita – notable since neither hurricanes Ike nor Gustav this year wreaked nearly as much havoc as those legendary storms did three years ago.

"We no sooner got up off our knees before we fell again, and now we're stumbling around, trying to recover," says Mr. Pitfield, president of Saraguay Petroleum. "This is significantly worse than Katrina, but we haven't quite been able to quite figure out how or why. We can't get anywhere near the amount of gas to satisfy the demand."

The double-whammy of Ike and Gustav came as supplies were already low. Refineries in the Gulf had begun to ramp down production of summer fuels before Ike, meaning supplies were already crimped in anticipation of the Oct. 1 switch to higher-sulphur winter blends.

Media speculation, watercooler rumors, and panic-buying exacerbated the problem. Prices in Atlanta, topping $4.29 in some places, were the highest in the lower forty-eight on Wednesday.

In Nashville, drivers waited for hours for fuel, only to see gas pumps covered in bags. In Atlanta, some motorists ran out of gas in line and had to push their cars to the pumps. In Asheville, one gas station owner had to call police after at least three fistfights broke out. An Alabama paper said the regional mood was "as jumpy as a frog farm."

"People become desperate, man, availability is more important than price," says John Baen, a pipeline expert at the University of North Texas in Denton. "It's the South today, but it could be [Boston and Chicago] tomorrow."