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Friday, April 21, 2006

This does NOT mean I'm going to wear platform shoes again
Posted by Jill | 11:47 AM
Welcome back to the 1970's:

Pumps ran dry at scattered gas stations as fuel terminals and stations struggled to adapt to ethanol in fuel mixes, causing some customers to hark back to widespread gasoline shortages of the past.

Catherine Rossi, a spokeswoman for AAA Mid-Atlantic, said she knew of eight stations in the Philadelphia region that were out of fuel on Thursday.

"There is truly a dearth of supply in the Philly and New York markets today," said Wayne Hummel of Liberty Petroleum L.L.C.

Four of the 40 stations Liberty supplies in the Philadelphia region ran out of fuel in the last two days as its tanker trucks made futile trips from terminal to terminal, Hummel said.

Jai Kulkarni, owner of a Kwik Farms convenience store and a Lukoil station, said he was out of gas for about four hours on Wednesday, losing about $200 an hour in sales.

At the station Thursday, Vinnie Zambuto, 31, of Coatesville, said he never saw a gas station run dry before he encountered one last week.

But Zambuto said he had heard tales from his parents of gas shortages of the 1970s, and hoped the current supply stumbles would be short-lived.

[snip]

Refiners are switching to fuel formulations containing corn-based ethanol, prompted by the federal Energy Policy Act of 2005, and ethanol's affinity for water requires extensive work both at fuel terminals and the service stations themselves.

Retailers must clean their tanks, remove all water and install extremely fine filters on their pumps. Terminals have to clean tanks to store the ethanol and install equipment to blend it with the gasoline.

Independent gasoline distributors said few terminals had gasoline on Thursday. A Pacific Energy Partners L.P. terminal that did was filling trucks in only two of its five lanes, with waiting times of four hours. "We are doing our best to activate the others," said Jennifer Shigei, a company spokeswoman.

Refiners declined to go into detail about the supply situation, but Shannon Breuer, a spokeswoman for Sunoco Inc., said the company was "focused on being a reliable supplier" and was confident any problems would be short-term.

AAA warned that supply disruptions could continue for the next few weeks, however, as terminals and stations deal with the new blends, and that could drive soaring pump prices still higher.

The shortages come on a day when there is also a new record for oil prices.
On Friday, oil prices briefly jumped to $73 a barrel for the first time.
At pumps around the nation, a gallon of gas is up 30 cents over the last
month, CBS News reports.

The average gasoline price has already jumped 22 percent to $2.85 a gallon in the Philadelphia area since the latest upturn early in March, and 18 percent to $2.71 in southern New Jersey in the past month, AAA said.


We cannot expect any kind of leadership on alternative energy from the Bush Administration. The government is run by people who get richer every time the price of gasoline goes higher. The U.S. had the opportunity to really do something about fuel economy and about alternative sources of energy back in the 1970's, when Jimmy Carter made attempts to get such research going -- only to have Reagan scrap such efforts upon taking office.

We are reaping what we sowed. And this is only the beginning. Just wait till Bush nukes Iran just in time for the November elections. You think $3.00 gasoline is expensive? You ain't seen nothing yet.

UPDATE: Watch out when they start blaming ethanol. A study done for California by the Foundation for Taxpayer and Consumer Rights found that:

...corporate markups and profiteering are responsible for spring price spikes, not rising crude costs or the national switchover to higher-cost ethanol, as the oil industry claims.

Independent petroleum consultant Tim Hamilton analyzed gasoline price increases from January to April to find that:

  • Increases in the "spot" market price of crude oil -- which is the highest price a major oil company would pay for crude oil -- accounted for only 12 cents per gallon. California's percentage sales tax increased fuel prices by another four cents per gallon. More than 40 cents of the 60-cent increase in gasoline prices over 3 1/2 months is attributable to increased refinery and marketing profit margins for the oil companies;

  • Neither the MTBE phaseout nor the substitution of ethanol is a serious part of the increase. If the MTBE phaseout or ethanol blending specifically increased costs for oil companies in California, other states in the West using conventional unblended gasoline should be much less affected. Yet Washington State, which uses only conventional gasoline and has similar refinery capacity and crude oil sources, mirrored California's increase;

  • The profit increase of 42 cents, on top of record profits last year, means California gasoline will cost consumers approximately $546 million more in April 2006 than in April of last year.


"Oil companies are opportunistically using the rising world price for crude oil as an excuse to excessively raise gasoline prices and pump up their profits, even though the spot market price for crude has gone up far more slowly than gasoline prices," said FTCR President Jamie Court. "In addition, the spot price is higher than most oil companies pay, since they either harvest their own crude or pay more stable and often much lower contract prices."
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