Power outages at hundreds of gas stations and a distribution bottleneck due to flooding damage and power loss has caused a gasoline shortage in the New York metropolitan area that may not be cleared up for at least a week, according to industry experts.
What was a problem for drivers when Super Storm Sandy ended two days ago has become a nightmare for frazzled motorists who find themselves in gas lines that can stretch on for hours. Some lines were hundreds of cars long in sections of New Jersey and New York Thursday, and in a number of locations police monitored the lines which interfered with traffic flow in some areas.
The problem is not gasoline supplies, but the ability to distribute it, especially from the critical area around Linden, N.J. An estimated 75 percent or more of the gas stations in New Jersey were closed either because they had no gasoline, no power or both, said Sal Risalvato, executive director of the N.J. Gasoline, Convenience, Automotive Association. His organization represents about 1,000 gasoline stations in N.J.
“What I’m seeing is here’s a combination of problems. Power is at the root of it. That means gasoline that is already in inventory, already refined in those big tanks you see along the side of the turnpike, they can‘t get that gasoline into the delivery trucks without power,” said Risalvato.
Those “white tanks” along the New Jersey turnpike are gasoline terminals, owned by a number of companies, and the question for the industry is how quickly can normal operations resume after power is restored. A number of New Jersey based companies, like NuStar and Shell’s Motiva, reported that the storm surge drove water into the terminal areas, and it is unclear when they will be operational.
PSE&G, which powers that critical region, expects its substation to be back in working order and have electricity running to the critical chokepoint area by Saturday.
“We are focused on the major refineries area in Woodbridge, Linden, Elizabeth part of New Jersey. We expect to have the substations back by late tomorrow/Saturday, so what that means is power will be restored to that region,” said PSE&G CEO Ralph Izzo on “Fast Money Half-Time.”
“Now if there’s a specific set of circumstances to a particular customer in that region that will push it out further, but that region will be able to receive power Saturday,” he said.
Izzo said PSE&G has a list of critical locations that are a top priority. That includes hospitals but also refineries. Izzo said residential customers, which could include gas stations, should have power by the middle of next week at the latest. There are still about 780,000 PSE&G customers without power, and other utilities also serve New Jersey.
The refineries that remain out of commission, especially the giant gasoline-producing Phillips 66 Bayway refinery, are not at the root of the current supply shortage. It is mainly the result of trucks not able to pick up deliveries or make deliveries.
“I think you’re going to see some easement over the weekend,” said Risalvato. “You’ll see normalcy next week. You’ll see things are going to happen all at once. Power is going to be restored. Roads are going to be clear. It’s like you’re drain is clogged and all of a sudden it’s unclogged.”
That assurance is cold comfort to cranky consumers on the East Coast who waited in long lines at the pump to fill up their cars and gas cans to fuel home generators.
Though retail gasoline prices were steady or dropping at the pump in some places, they could start to spike in hard-hit areas of the storm, particularly the New York metropolitan region.
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One Response
Parts of this are just plain wrong. There should be no such thing as a gsoline station that is not open because it doesn’t have power. It doesn’t take much power to power the pumps. They can get small gasoline powered genertors like people are getting for their houses, and use them to run the pumps. Admittedly, they will need to get the first gallon from their competitors, but after that they should be self-sufficient.
After the 1954 hurricane (Carol) gasoline stations used old cars to run their pumps. I understand that today they are all electric, but still this is an easily solved problem if they really wanted to solve it.