AUTHOR javno100



STORM-IKE/SHORTAGES

SEPTEMBER 23 2008 19:41h

VIDEO: Hurricanes Cause Fuel Shortages In U.S.

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Video

A lot of this is due to some of the pipelines, refineries were shut down because of disruptions in the Gulf.

Crude oil production cuts, refinery outages and panic buying due to hurricanes Gustav and Ike have led to gasoline shortages in parts of the United States, officials said Tuesday.

"A lot of this is due to some of the pipelines, refineries were shut down because of disruptions in the Gulf," said Brandon Wright, spokesman for the Petroleum Marketers Association of America. "

Florida, Georgia, Tennessee, dependent on Gulf Coast refineries, were among states hit, with retailers running out of supplies and prices spiking. Even Ohio, far from the coast, saw shortages as storm damage marched inland, Wright said.

Panic buying has worsened the situation, said Pat Moricca, president of the Gasoline Retailers Association of Florida. "People are filling up when they don't have to," he said.

"What we are seeing -- rising prices and constrained supply -- is normal following events causing supply disruptions," the U.S. Department of Energy said. "As refineries get back to full production and restoration efforts progress in the Gulf region, the market will balance."

Concern about shortages led the U.S. Environmental Protection Agency to grant temporary waivers of clean fuel requirements in some areas. That allows fuel that does not meet local rules to be imported from other regions to meet needs.

Pipeline companies said they are up and running but need more production from refineries still recovering from the storms in order to send more fuel to wholesalers and retailers.

"Our Plantation pipeline has 100 percent capacity available but is about 80 percent full at this time because of the lack of product from refineries," said Joe Hollier of Kinder Morgan, which owns Plantation.

Hollier said he could not say when the situation will return to normal. "We have been seeing higher receipts and volumes have been gradually increasing and that trend is expected to continue," Hollier said.

The Tennessee Oil Marketers Association reported the situation improved Monday and predicted better conditions next week. "But you have to put product in one end to get it out the other," executive director Marylee Booth said.

Seven refineries, about 9 percent of U.S. capacity but concentrated along the Gulf Coast, remained shut down on Tuesday, but many were moving to resume operations as quickly as possible, officials said.

Adding to the problems, more than three-quarters of crude oil production in the Gulf -- which helps feed refinery output -- remained shut as of Tuesday.

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