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The massive evacuation of Texas resulted in more than frustration and
lack of confidence in government. The timing of Rita’s evacuation was precipitous
to gas supplies since normally after Labor Day our refineries are retooling to
produce winter heating oil and less fuel for driving. Perhaps city planners will take Miami-Dade and Seattle’s emergency
chief’s counsel, establishing “hurricane bus routes” to well known evacuation
points, and increase shelter-in-place options. Supply concerns elevate futures: storms may have lasting effecting on operations http://www.washingtonpost.com/wp-dyn/content/article/2005/09/28/AR2005092800413.html White House moves to
prevent run on petrol By Sheila McNulty in Tucson, Financial Times,
September 29 2005 03:00 President George W.
Bush's call for the US public to conserve energy is aimed at preventing a run
on petrol at a time when the US is precariously short of it. Energy companies have been trucking
fuel in from various parts of the US to restock pumps that ran dry in Texas,
following two hurricanes that struck the heart of the nation's energy
infrastructure and a massive evacuation that cut into much-needed supplies. This has stretched already tight
national petrol supplies. "The president's
best bet for the
next two weeks
is to try to see if he can get Americans to stop doing discretionary driving
without creating panic," said Amy Myers Jaffe, research fellow at the
James A Baker III Institute for Public Policy. "He's in a very challenging
position." The
US petrol market lost close to 80m gallons of petrol in the evacuation of about
3m people from Houston ahead
of Hurricane
Rita. Although Houston
was not hit, forecasters had projected that the fourth-biggest US city would be
in the eye of what was then a Category 5 hurricane. That boosted regional demand 4-5 times higher
than normal
as residents fled, Baker Institute research shows. In the end, Hurricane
Rita released its fury on the Gulf of Mexico drilling area, damaging more
offshore rigs than any storm ever, before hitting four refineries on the
Texas/Louisiana border. While
damage to rigs, which drill for oil, will drive up future fuel prices, the
damage to refineries - on top of the run on petrol in the evacuation - is
likely to have an immediate impact at a time when Americans already are seeing
petrol for $3 per gallon at the pump. "The storms and
the resulting price rises have created a sense of anger with consumers and
urgency with politicians," said Robin West, chairman of PFC Energy, the
consultancy. Congressmen say constituents are more concerned by rising fuel
prices than the war in Iraq or the president's handling of Hurricane Katrina.
And analysts fear prices for many fuels are set to climb higher. The storm cost the US
about 5 per cent of US refining capacity, even as another 5 per cent remained
offline following Hurricane Katrina. Perhaps more importantly in the short
term, however, is the immediate burden placed on the system by last week's
massive evacuation of Texas and Louisiana. It
pushed national consumption of petrol to about 6 per cent more than for the
week of Labor Day, which is considered peak driving time in the US, according to the Baker Institute. That
was about 20
per cent higher than normal for this time of year. Researchers say
continued heightened demand will put additional strains on the US petrol
distribution system, which was tight even before hurricane season began, with
refineries running as close to full capacity as possible. The nation has no
refined stores, so the loss of petrol from the evacuation alone could result in
higher retail prices. Kenneth B Medlock III,
an economics lecturer at Rice University, said consumer inclinations to keep
petrol tanks full can aggravate the situation. He notes even price caps in the 1970s
failed to discourage consumers from filling up tanks and left many without
needed fuel. Public commitment to
voluntary adjustments to habits and practices is the best short-term solution,
Ms Jaffe said. Not only would that prevent another run on petrol stocks but also gain credibility with Europe, as the
US asks for emergency refined product relief. "We cannot just ask for more fuel and let
other countries bear the brunt of changed use patterns," Ms Jaffe said. Yet refiners have for
years resisted taking on the expense of storing stocks, and conservation is
politically delicate. "Telling Americans not to get in their cars is like
telling Americans not to eat apple pie," she notes. That is why Ms Jaffe and others say that President Bush - and
the big oil and petrol companies in recent advertisements - are soft-pedalling
on the call to cut discretionary driving. Mr Bush has simply encouraged
car-pooling and reducing unnecessary trips. The need for the
public to conserve could not come at a more delicate time. Bob Linden of PA Consulting noted that
heating oil is going to come into the limelight in coming days, when people
begin ordering fuel oil for winter. Refineries that normally would be building
inventories of fuel oil have been instead replenishing petrol supplies lost in
the hurricanes and the evacuation. That has set the stage for reduced supplies
of heating oil that will drive up prices as winter approaches. "This is peak
filling time," Mr Linden said. "The trend is going to be apparent
that fuel oil inventories are going down." http://news.ft.com/cms/s/9a12d2e4-3085-11da-ba9f-00000e2511c8.html |
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