WASHINGTON -- Concern is overblown about gas stations running out of fuel as refiners switch from blending methyl tertiary butyl ether (MTBE) to ethanol in gasoline, the U.S. Department of Energy (DOE) said Friday.
The problems are scattered, they are transitional, and they will probably run their course over the next two weeks, Mike Burdette, a senior analyst at the DOE's Energy Information Administration (EIA), told Bloomberg. There are no widespread outages.
"There are a handful of outages being reported across the region, but they are temporary," Catherine Rossi, a spokesperson [image-nocss] for AAA Mid-Atlantic, told Reuters. "The problem is waiting for the trucks to get to the stations."
As reported in CSP Daily News late last week, some gasoline distribution terminals and retail stations from Virginia to Massachusetts saw shortages. The DOE reported shortages at terminals near Richmond, Va., as well as the Tidewater area near Chesapeake Bay and Virginia Beach. Northern Virginia, Baltimore and Boston were also seeing shortages. The National Association of Convenience Stores (NACS) also said members had reported shortages at terminals around Wilmington, Del., and Philadelphia. Outages and shortages occurred in areas of Virginia, Maryland, around Washington D.C., in Philadelphia and parts of Massachusetts, said Reuters.
"There is truly a dearth of supply in the Philly and New York markets [Friday]," said Wayne Hummel of Liberty Petroleum LLC, according to an Associated Press report. Four of the 40 stations Liberty supplies in the Philadelphia region ran out of fuel 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 gasoline for about four hours on Wednesday, losing about $200 an hour in sales.
Independent gasoline distributors said few terminals had gasoline on Thursday. A Pacific Energy Partners LP 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 spokesperson.
"The situation here is chaotic," Mike O'Connor, president of the Virginia Petroleum, Convenience & Grocery Association (VPCGA), told Reuters. He said his association is seeking a federal waiver to allow the sale of lower-grade gasoline to ease the crunch. A federal waiver allowing the sale of conventional gasoline, instead of the anti-smog blend, would make it easier for fuel suppliers to sell gasoline without the ethanol additive.
"We're patiently waiting to see if the state will make a formal request on our behalf," said O'Connor.
The Petroleum Marketers Association of America (PMAA), which represents stations selling about 55% of the nation's gasoline, said it was unaware of any other state associations seeking a waiver.
Others said they hope the problems are resolved quickly. "We're hoping this situation will be short-lived," said Rolf Hanson, executive director of theAssociated Petroleum Institute. "We think it is unlikely the government will grant waivers for a transitional issue like this one."
CSP Daily News obtained a notice from Sunoco dated April 21 that said Effective immediately, gasoline is no longer available to Wholesale customers at Westville, N.J. Shannon Breuer, a spokesperson for Sunoco Inc., told AP that the company was "focused on being a reliable supplier" and was confident any problems would be short term.
As many as 60 Dallas-area stations ran out of gasoline in early April because tanker trucks that would normally be available to re-supply them were used to haul ethanol, Valero Energy Corp. spokesperson Mary Rose Brown told Bloomberg.
Refiners are seeking to remove the additive MTBE from gasoline by May because of changes in fuel requirements in the energy bill that President Bush signed in August.
This is related to the conversion from MTBE to ethanol, said Jeff Lenard, spokesman for the National Association of Convenience Stores, a trade organization representing more than 2,200 retail outlets. It is not necessarily the same thing as supply outages.
The U.S. average gasoline pump price is climbing toward $3 a gallon, a price last seen in September after Hurricane Katrina. Record crude oil is also pushing pump prices toward their all-time high. Crude oil for June delivery rose $1.16 to $74.85 a barrel Friday afternoon on the New York Mercantile Exchange (NYMEX). The price touched $74.90, setting a record for a fourth straight day. Benchmark NYMEX gasoline futures, which are based on wholesale prices, fell .48 of a cent to $2.21 a gallon. They are up almost 60% since mid-February.
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