Dry pumps avoidable with quicker response

As we go to work today, the number of gas stations out of gas will have escalated and the situation won’t abate much over the coming weeks. This shortage, for the most part, was avoidable.

I advised Gov. Sonny Perdue of the impending crisis on Sept. 11, well before Hurricane Ike made landfall. I suggested that the state implement rationing of some form or, perhaps, limiting purchases at the pump. While he acknowledged my concerns, my suggestions fell on deaf ears.

Although Perdue’s office announced a waiver Friday night, allowing other gasoline into the Atlanta area, the intricacies woven into the waiver made it basically impossible for carriers or stores to benefit. The state has now gotten approval for a broader waiver, but this should have been done weeks ago. During Katrina and Rita, this waiver was granted unconditionally and immediately, when shortages were not as apparent as they are today.

The situation we’re now in can be attributed to a number of factors.

In Atlanta and surrounding 45-county area we burn a very specialized, low-sulphur boutique fuel. It is like no other in the country, and only Atlanta, Birmingham and perhaps Phoenix use it. State and federal environmental agencies make it illegal to bring gas from outside of this stipulated area, even from places as close by as Athens or Macon.

Adding further fuel to the fire is the fact that we change over our gasoline every mid-September and mid-June, going from summer to winter formula and vice-versa. In anticipation of the bi-annual changeover, inventories were purposely allowed to run low. Then there is the fact that, due to the exorbitant price of fuel, big oil companies are reluctant to keep large surpluses on hand. The cost is prohibitive, especially given the extreme daily price swings.

So just days before Hurricane Gustav hit, product levels at terminals across the Southeast were low and lower still in Atlanta.

The pipelines supplying this fuel start in the gulf coast and stretch in a gentle arc toward the Northeast, terminating somewhere near New York. After Gustav hit, these pipelines and refineries were barely up and running when they were again forced to shut down for Hurricane Ike. They are now slowly returning to working status, but the key word here is “slowly.”

The end result was a double whammy when we least needed it. It will most likely be several weeks, best-case scenario, before fuel shipments return to normal.

In Atlanta, we are seeing people purchase gas more frequently, be it topping off or even filling up. This increase in purchasing, coupled with the panic buying that we saw two weekends ago, is straining an already fragile system. As a result, we are now very much in a hand-to-mouth situation.

The fuel terminals in Atlanta have gas. But were they to allow unlimited pumping, they would be empty in no time, resulting in a situation that would be far worse. Thus, they are limiting the amount we can deliver daily.

I applaud the small gas station owners who are limiting purchases to 5 or 10 gallons. That is smart business; they keep their store in operation and are able to satisfy a broad sector of the community. As for prices, this is base economics. If you have it and others don’t, it is worth whatever the customer will pay.

Perhaps it is time for us to appraise our situation and lobby government to mandate alternative fuels, such as hydrogen fuel cells and electric vehicles. At a minimum, we would see a significant cost reduction and more stable supply chain if we consolidated the varieties of gasoline in the United States — 200 or more at last count — into one, low-sulphur variety, such as what we burn in Atlanta.

When will we realize that we desperately need to change our way of life? Sooner rather than later, I hope, although I am as guilty as the next person. I commute back and forth in my ridiculous SUV with its 11.5 miles per gallon.

Now, ask yourself, what can you do to help?

Tex Pitfield is president and CEO of Saraguay Petroleum in Atlanta.