Post-Ike gas shortage may take weeks to end

There are still 15 refineries in the Gulf that are not at full production – with six not yet operating at all in the Port Arthur and Texas City area of Texas – mainly due to extended power outages in the wake of hurricane Ike. The Colonial Pipeline, which makes a deep arc from the Gulf, through the South, and up into New York, is running far from capacity, and dealers are anxiously awaiting supplies that run only at 5 miles per hour through the pipeline.

On Wednesday, the Environment Protection Authority (EPA) agreed to waive special low-sulphur requirements for the "Atlanta blend" of gasoline in order to get supplies into the city. The EPA rarely approves waivers for localized shortages, but political pressure is high as the House Committee on Energy and Commerce monitors the situation from Washington.

Gregg Laskoski, a spokesman for AAA Auto Club South in Atlanta, says the gas shortage also highlights US dependence on some 200 boutique fuel blends that take into account local air quality and automobile performance standards. One way to ease the pressure, he says, would be to create perhaps two standard fuels, making the national supply more interchangeable and easing pressures on overworked – and vulnerable – Gulf Coast refineries.

"These boutique fuel requirements that are legislated in so many states are counterproductive at times like this," says Mr. Laskoski. "It would also reduce costs if you could create more of a commodity item rather than a specialty item."

On Tuesday, 20 tanker ships full of gasoline refined in Europe were diverted from the Atlantic Coast to the Gulf in order to bolster supplies.

In Tennessee, Gov. Phil Bredesen refused to enact statewide rationing, saying the emergency wasn't serious or widespread enough to warrant it. But some drivers commenting on the local news website, The Tennessean, said state leaders were living in an "alternate Nashville" as a majority of pumps remained closed.

In Alabama, legislators introduced a new law to crack down on price gouging by limiting price discrepancies in emergencies to 15 percent and raising fines to $5,000.

But Mr. Baen, the UNT industry expert, says tough stances on price gouging may have exacerbated the shortage as jobbers focused on getting gas to areas that were easier – and cheaper – to reach. Without financial incentive to get to outlying areas, those pumps simply remained dry.

That's what seems to have happened in the mountain city of Asheville, N.C. With many independent dealers and jobbers facing long distances over steep grades, distributors with limited supplies chose their routes based on what was expedient – and profitable.

As a result, the city of Asheville cancelled several events. Landscapers, florists, and plumbers all declined work for lack of gas.

And as panic-buying subsides, some drivers are altering their driving habits. Some, like Wendy Meyer in Atlanta, decided to park her SUV permanently in favor of walking to work.

"[Gas supply] is frail, it's delicate, and we should appreciate the availability that we do have," says Baen.

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