RE: How can gas stations be out of gas? Gustav, Ike, and the MOL...

[Subdivisions]

Those of us who follow such things daily are aware of something called Minimum Operating Levels. MOL is the amount of gasoline that is in transit and therefore not at the pump ready for our use. As it happens, our national pipeline system has been running at around 302 million barrels capacity. That's the amount of gasoline in transit. But, for various reasons including Gustav and now Ike, oil shipments being delayed and refineries shutting, the capacity of the nation's gasoline infrastructure is under tremendous stress.

Then, along came Gustav, which caused the shutting of the Colonial Pipeline from Louisiana to New Jersey and points between, including many of those places like Atlanta where prices are spiking currently. Then, just days after reopening the pipeline, it is now shut again. And this on top of the pipeline system being at MOL.

This condition can only lead to two things. Shortages. And high prices due to low available supplies.

Oh, and this reveals a very unnerving condition of our existance. We have no spare capacity. And the reason we have no spare capacity is because overall world oil production is peaking and there is no spare capacity to be had. Once supplies can no longer keep up with world demand, we'll pass decisively into the Age of Petro-Collapse.


Here is last week's EIA Weekly Petroleum Report (It is from this report that MOL is determined for the purposes of this post)

Unleaded 5-Sep
Beginning Inv 194.4
Imports 7.7 1.1
Production 58.8 8.4
Available 260.9
Ending Inv 187.9
Balance 73
Balance/day 10.43
Prod Supplied 9.3
Actual Change -6.5
Deviation from Forecast 0.8

Distillates 5-Sep
Beginning Inv 131.7
Imports 0.819 0.117
Production 27.3 3.9
Available 159.819
Ending Inv 130.5
Balance 29.319
Balance/day 4.19
Prod Supplied 4.1
Actual Change -1.2
Deviation from Forecast 2.3

Crude Oil 5-Sep
Beginning Inv 303.9
Production 33.537 4.791
Imports 60.2 8.6
Total Available 397.637
Provided to Ref 94.5 13.5 78.3
Ending Inventory 298
Actual Change -5.9
Deviation from Forecast 11.6

When followed on a weekly basis, and cross-referenced with other data that is publicly available from both the http://eia.doe.gov">EIA and the http://www.iea.org">IEA, if you get more negative value for ending inventory for any one of the above categories for long enough, eventually you reach MOL - and thus shortages shortly thereafter. The best estimate of the current MOL, which is based also on demand, is 187,000,000 barrels in the system. However, we are now (because of Gustav and now Ike) running at about 185,000,000 barrels in the system.

NOW...Take all that I said above and add to that all those tanks that got filled up to run from both Gustav and Ike on an already strained pipeline and supply distribution system, plus refinery shut downs (list below for Ike), and you have a serious, SERIOUS, problem.

http://news.google.com/news?ned=us&hl=en&ned=us&q=gasoline+shortage&ie=UTF-8&scoring=n">Google listings for "gasoline shortage" by state

Refineries Shut-in
Thirteen Texas Gulf Coast Refineries Shut Down as Hurricane Ike Approaches
As of 10:00 AM EDT September 12, thirteen Texas refineries have shut down due to Hurricane Ike. These refineries located in Port Arthur, Houston/Texas City, and Corpus Christi regions have a total operable capacity of 3.6 million b/d. The following refineries have been shut:
 ExxonMobil’s 567,000 b/d Baytown, TX Refinery
 BP’s 467,720 Texas City, TX Refinery
 ExxonMobil’s 348,500 b/d Beaumont, TX Refinery
 Deer Park’s 329,800 b/d Deer Park, TX Refinery
 Valero’s 289,000 b/d Port Arthur, TX Refinery
 Flint Hills Resources’s 288,126 b/d Corpus Christi, Texas Refinery
 Motiva’s 285,000 b/d Port Arthur, TX Refinery
 Houston Refining’s 270,600 b/d Houston, TX Refinery
 ConocoPhillips’s 247,000 b/d Sweeny, TX Refinery
 Valero’s 199,500 b/d Texas City, TX Refinery
 Pasadena Refining’s 100,000 b/d Pasadena, TX Refinery
 Valero’s 83,000 b/d Houston, TX Refinery
 Marathon’s 76,000 b/d Texas City, TX Refinery

You can learn more about MOL here: http://www.fcnp.com/index.php?option=com_content&task=view&id=1306&Itemid=35 and http://www.fcnp.com/index.php?option=com_content&task=view&id=1747&Itemid=35

The bottom line is this. We have no spare capacity. Big storms like Gustav and Ike hitting the oil and gasoline infrastructure, as well as production contraints as global peak oil tightens its grip, and geopolitical factors have caused a situation where there is just not enough capacity in the pipeline system. Shortages may become severe and widespread as a result.

One more thing. We use 25,000,000 barrels of oil every day in the U.S. We have to import 80% of that as our production has declined from 10mbpd in 1970 to 5mbpd today. Mexico is our third largest supplier of oil behind Canada and Saudi Arabia. Mexico's oil production is taking a dive, having dropped off 37% this year - and they expect to cease exporting oil in as few as 7 years. Where will we get another third-largest supplier of oil? Discoveries of oil peaked in 1964. That's right, 1964.

That should give ya'll enough to chew on for now. Thanks for reading =)!

[neverforget]

1. Thanks for starting a thread with this information as it needs to get out

to more people here at DU.

[Subdivisions]

2. It's simple. Tonight we have about 200,000,000 barrels of

gasoline in this country. 15,000,000 is left in gas station pumps. And 185,000,000 is caught up in transit in the pipeline, on barges, etc.

[LunaSea]

3. Thanks for the info!

Now I see the problem with my state,
we need more blue lines. :)

[Subdivisions]

5. What's even scarier is that those of us whose hobby it is to follow

the nation's daily energy situation (I know, boring, huh?) suspect that because of Gustav we'll see a rather large drop in imports on next Wednesday's report. If that bears out, we'll still have a few more weeks to work the damage from Ike out of the equation. This could lead to a substantial decline in the amount of gasoline in the pipeline system. In fact, it may go low enough that there is not sufficient pressure in the system to move the fuel along the pipeline and through the booster stations.

Things could get pretty hairy coming into the heating season. Anticipate shortages by filling up whenever you can and keeping your tanks full.

[ben_meyers]

4. Just take a look a your pipeline map

In the summer of 2003 the Kinder-Morgan pipeline between Tuscon and Phoenix blew out. Gas was selling for up to 8 bucks a gallon and panic buying set in. People were topping off their tanks whenever they found a station with gas. Caravans of cars would follow the tankers leaving the terminals just to get fuel. At one point the experts estimated that there was a 30 day supply of gasoline in the gas tanks of peoples cars due to hoarding. The whole thing was a cluster-fark reminiscent of the Johnny Carson induced "toilet paper" shortage of the '70's. Don't underestimate the herd mentality.

[Subdivisions]

6. Yes. Just as I was about to open your post I realized I didn't mention

panic buying in the OP. That is on top of fleeing evacuees filling up cars, trucks, and busses for both Gustav and Ike. And that's on top of sub-MOL supplies.

I've personally seen the panic buying in my region of Texas Ft Worth and south. Half the stations were out of fuel and the other half were inhabited by a mixture of evacuees re-filling, panic buyers, and people who went to other stations, like me, that were alread out of fuel.

[spin]

7. It's called price gouging and Florida has a number to call...

McCollum, the Florida attorney general, said any dramatic increase in price "that cannot be justified is considered price-gouging" and should be reported to his office at [phone].

"We have had teams of investigators looking into complaints throughout the day and will continue to closely monitor the situation," he said in a statement.
http://www.heraldtribune.com/article/20080913/ARTICLE/809130356&title=Stations_raise_gas_prices_as_experts_say_current_fuel_supply_is_sufficient

Independent gas stations may run out of fuel over the next few days and some already have, Bronson admitted.

But there's no excuse for hiking gas prices already, despite gulf refineries shutting down because of Hurricane Ike, Bronson warned retailers. Some gas stations throughout the state have raised per-gallon prices by $1 or more.

That's because retailers have to charge their customers based on the price per gallon they paid for the fuel in the tanks.

Anyone with evidence of price-gouging is asked to report it by calling 800-HELPFLA or 800-435-7352.
http://www.palmbeachpost.com/state/content/state/epaper/2008/09/12/0912gaspanic.html

The local news mentioned a $25,000 fine for price gouging. Sounds fair to me.

[Subdivisions]

8. There is some of that. But are you discounting what I said? BTW,

I was speaking of gas shortages, not prices or price gouging.

[ben_meyers]

9. Well I understand what you are saying

And being part of the herd I went out and topped off tonight at 3.30 a gallon. 70% of our supply comes from the gulf here in Phoenix, and I expect a few days of wacky prices for fuel.

[spin]

10. Let me direct you to what my links said..

There is no current gas shortage in Florida, therefore there is no reason for a draconian rise in prices at this time.

The Florida Department of Environmental Protection said that as of Friday the statewide inventory of gas is at 216.3 million gallons, with another 160.4 million gallons expected to arrive in 41 shipments during the next week or so. That is 20 gallons for every person in the state.

"From the numbers that are out there, people should maintain normal buying habits," said David Mica, executive director of the Florida Petroleum Council. "If people go out and buy in volume, it can really mess the system up."
http://www.heraldtribune.com/article/20080913/ARTICLE/809130356&title=Stations_raise_gas_prices_as_experts_say_current_fuel_supply_is_sufficient

Your point was that we have no spare capacity and storms like Ike will cause a dramatic rise in gasoline prices in the near future. Very true.

I was using my post to point out to people in Florida that currently we have no shortage and to provide a telephone number to call to report the scum that try to abuse a natural disaster for their profit.

Out of curiosity, what do you think of the Pickens plan to use compressed natural gas to power our automobiles? I've talked to several people who have some experience with CNG and they pointed out that it is much cleaner than gasoline and automobile engines can last two to three times longer if they are converted.

[Subdivisions]

11. I like Pickens' Plan not because of the idea of replacing nat gas power

generation with wind and using that nat gas to fuel autos, but because it's at least some sort of plan, which noone else has. And, it's a pretty decent plan.

The only problem is that if you transition the motor fleet to nat gas, eventually nat gas will follow the same production profile as oil is following, that being a parabolic curve of increasing production, plateauing, than irreversible decline. That is expected to occur around 2025 without Pickens' Plan. Using wind for power generation so that transportation can use the nat gas is, at best, a temporary band-aid on our energy conundrum.

[Bandit]

12. A temporary bandaid is basically how it is being billed.

According to the ad Pickens is calling a temporary "bridge" until we can develop other alternatives. It is something we can do immediately and I believe after Obama is elected it will become one of the first pieces of business. Pickens must be heavily invested in the Natural Gas field..He stands to make billions if the entire USA switches from gasoline to cng.

[spin]

14. I agree, it's a good plan to get us from here to there. (n/t)

[jpak]

13. In the FL Panhandle, gas stations run dry well ahead of hurricanes.

After Katrina, there was NO gas anywhere for nearly three weeks from the FL Panhandle to Port Aurthur TX.

Ike is going to impact gasoline supplies for everyone everywhere this week...