GAS SHORTAGE:
As supplies run low, refinery shutdowns could worsen problem
Many Houston-area gasoline stations were already pumped dry by Friday afternoon, an ominous sign for the days ahead if Hurricane Harvey and its floodwaters linger in the region next week as feared.
Major refining systems are already shut down in Corpus Christi, and there’s no telling how long operating refineries from Houston to Galveston will keep running. Prolonged fuel shortages could result if they’re shuttered as well, said Patrick DeHaan, senior petroleum analyst for Gas Buddy, which was tracking fuel pricing and refining activity.
“The buck stops with Houston,” DeHaan said. “If those refineries are down for an extended period, there will be major
ripple effects.”
More than 25 percent of the nation’s gasoline is refined along the Texas Gulf Coast, and about 50 percent comes from the entire Gulf Coast region, including inland Texas and Louisiana, according to the U.S. Energy Department.
Fuel may not be available
Fuel prices already are rising — up about 3 cents this week to a Houston-area average of $2.13 per gallon — but some stations have spiked prices by 10 cents or so per gallon already.
DeHaan predicted Houston fuel prices could rise as much as 25 cents per gallon within the next week or so.
Gov. Greg Abbott has already declared a state emergency. Texas law prohibits price gouging on necessities including gasoline during such an emergency, but that doesn’t mean prices can’t creep upward given the market forces of supply and demand.
The Houston Chronicle discovered more than 20 fueling stations that had already had run out of gasoline on Friday from Katy to Houston to Kingwood.
Rachel Kraut, 29, learned the hard way when she pulled into a Chevron station in Missouri City and saw the yellow bags over the pump handles reading, “Sorry, out of service.”
“What the … ? I guess I’m not gassing up here,” she said, shaking her head.
Kraut is new to Houston and admittedly waited late to fill her tank. “I’ve clearly learned my lesson,” she said.
Dan McTeaue, also a GasBuddy analyst, said some empty fueling stations are getting refueled, but that effort will prove more difficult if there are major flooding and power outages. Fuel supply trucks can’t get through heavily flooded streets, and power outages would hamper both the refineries and the gas stations.
“There could be a prolonged period where fuel isn’t available and people have to get by on what they have,” McTeague said.
Harvey’s rapid transformation from a tropical depression to a major Category 4 hurricane caught nearly everyone off guard.
“It doesn’t allow gas stations to respond as quickly and nimbly as one would hope,” he said, preventing most stations from stocking up on supplies early.
Lessons from Rita
When Hurricane Rita slammed into Texas in 2005, the state had no plan in place to get gasoline to Texans fleeing the big storm. Some 3.6 million Texans took to the state’s highways to outrun Rita, running out of gas along the way and having no way to fill up. Stranded vehicles made the gridlock worse. Several dozen people died during the botched evacuation.
Afterward, industry and government leaders agreed to boost gasoline inventories at least 15 percent before a storm was expected to make landfall and then shift supplies along evacuation routes. But that’s more difficult when storms rapidly develop.
The federal government also can get more gasoline onto the market by waving environmental standards for fuel, as it did during Hurricane Sandy in 2012.
An Environmental Protection Agency spokesperson said Friday that the agency’s Dallas office was readying to process applications for fuel waivers for the Gulf Coast.
Several refineries shut down
Houston has massive amounts of crude oil sitting in storage — newly imported, awaiting export, or being prepped for refining. Enterprise Products Partners is one of Houston’s largest exporters of crude and said it’s taken ample precautions to protect all of its assets. There are major concerns of accidents causing oil, gas and petrochemical facilities to leak toxic pollution all across the region, said David Turnbull, spokesman for the environmental advocacy group, Oil Change International. An unfortunate event also could compound a shortage.
As of this writing, Corpus Christi refiners Valero Energy, Flint Hills Resources and Citgo Petroleum said they had temporarily shut down their operations along Corpus’ refinery row. Houston-area refiners, meanwhile, are continuing to closely monitor the massive storm.
Royal Dutch Shell said its operations remain stable at its Deer Park refinery. Likewise with Valero’s Texas City refinery and Exxon Mobil’s Baytown complex.
Marathon Petroleum is keeping its Galveston Bay and Texas City refineries open for now, but Reuters reported Marathon is reducing the production levels. Marathon declined comment on that report.
Several Gulf Coast petrochemical plants also are shutting down for now. While LyondellBasell’s Houston oil refinery is still up and running, the petrochemical giant has shut down plants in Corpus Christi, Victoria, Matagorda and Chocolate Bayou. jordan.blum@chron.com twitter.com/jdblum23