COFFEEVILLE, Kansas -- Kansas fuel marketers are seeking a temporary waiver from truck-driving regulations to boost supply in the region following the shutdown of Coffeyville Resources LLC's oil refinery, Dow Jones reported on Tuesday.
A major fuel supplier, the 108,000-barrel-per-day Coffeyville, Kan., plant shut down late Saturday as the nearby Verdigris River overflowed its banks. Floodwaters have shut the refinery, terminal and rack.
If the governor's office grants the waiver, drivers of fuel tanker trucks would be allowed [image-nocss] to spend more than 11 hours on the road without facing the usual fines, the head of the Petroleum Marketers & Convenience Store Association of Kansas told Dow Jones. Tankers could then drive to more distant terminals and endure the longer waits created by the supply disruption.
"It's the wait to get the fuel and not so much the drive," said Tom Palace, the group's executive director. The rule is in place to ensure driver safety.
The shutdown at Coffeyville is the latest in a spate of U.S. refinery disruptions that have borne down on the Midwest, sending gasoline prices there surging. Because the Midwest is landlocked, it can't count on a flood of seaborne fuel imports to ease any supply crunch. Small- and medium-sized refineries are scattered over the region, and each one largely supplies a local market that requires its own unique blend of motor fuel. When one refinery goes down, this intricate and complicated supply network is of little immediate help, because other plants can't be quickly fine-tuned to the specifications necessary for the area with the supply shortfall.
That is why industry officials often request waivers in situations such as the one that has beset Coffeyville. In addition to waivers on the hours that tanker truck drivers are allowed to work, states and cities can request that rules governing the content of motor fuels be temporarily relaxed.
Tanker truck drivers are traveling south to Oklahoma and Texas and north to Topeka, Kansas, for fuel supply. In addition, the marketers group has been getting tankers lined up to bring fuel in from northern Kansas and Missouri.
With 18 counties already declared disaster areas in Kansas, it shouldn't be difficult to get the waiver, Palace said. A waiver of about two weeks should allow enough flexibility for supply to be maintained as flood waters recede and retail outlets re-open and clear water from storage tanks.
The Coffeyville closure will put serious stress on the fuel supply system of Kansas, Nebraska, South Dakota and Missouri, Palace said. South Dakota fuel marketers are already seeking a similar waiver on trucker driving hours.
Kansas fuel supply is tight due to fires earlier this year at Valero Energy Corp.'s McKee refinery in Texas and at the Wynnewood refinery in Oklahoma. In addition, a tornado shut a terminal in western Kansas, and a terminal in Salina was flooded.
"Any disruption is tough," Palace said. "We've had a quite a year with Mother Nature."
Meanwhile, Kent Satrang, the manager of Petro-Serve, a chain of gas stations in Fargo-Moorhead, N.D, said he has never seen anything like the current fuel shortages at pipeline terminals in the region. He told the Associated Press that both wholesalers and retailers are scrambling to get what gasoline they can. Petroleum marketers said refinery slowdowns elsewhere in the region are forcing truckers to wait longer at pipeline terminals to get fuel. North Dakota Governor John Hoeven last week issued an executive order to waive the limit on how long drivers who are hauling fuel can be on the job. Ron Sahr with Sahr's Sudden Service in Fargo told AP that he has been getting gasoline "piecemeal." His advice to drivers, "Fill up your gas tank."
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