The gas cri­sis — a look both ways

The fuel stor­age sys­tem does not have enough ca­pac­ity that every­one can drive around with a full tank of gas. If every­one de­cided to do this to­day we would still run out of gas without any cor­re­spond­ing weather event.

The Covington News - - Opinion greed is not good tammy moure oxford -

With gas prices in New­ton County now well be­low $ 3 a gal­lon, is it time to break out in a ren­di­tion of “ Happy Days are Here Again?” Not ex­actly.

The re­cent gas “ cri­sis,” as de­scribed by many me­dia out­lets, was sim­ply a symp­tom of a greater prob­lem — the frag­ile na­ture of our gaso­line sup­ply and dis­tri­bu­tion sys­tems and the de­pen­dence of the At­lanta metro area ( in­clud­ing New­ton County) on sup­plies com­ing from the hur­ri­cane­prone gulf re­gion. Un­less a cure can be found for the hur­ri­cane prob­lem, we can ex­pect to re­visit this is­sue again in the fu­ture.

As one who was in­volved work­ing with state of­fi­cials both be­fore and dur­ing the “ cri­sis,” I heard the many calls for the state to “ do some­thing.” It’s in­ter­est­ing that we as a so­ci­ety think some­how the gov­ern­ment can mag­i­cally solve our prob­lems in­stantly. But con­sider the fol­low­ing:

• The state does not make any gas. Not a sur­prise but our cur­rent sys­tem de­pends on a sup­ply sys­tem orig­i­nat­ing in the gulf. Al­though Hur­ri­cane Ka­t­rina did a lot more phys­i­cal dam­age, the re­cent com­bi­na­tion of Hur­ri­canes Gus­tav and Ike took more of the sup­ply that Ge­or­gia de­pends on out of pro­duc­tion. Gus­tav took out fa­cil­i­ties in the New Orleans area and Ike like­wise did the same for the Hous­ton area. No storm or com­bi­na­tion of storms in re­cent mem­ory have had such an im­pact.

• Calls for in­sti­tut­ing a “ min­i­mum pur­chase” re­quire­ment do not rec­og­nize the cur­rent way in which gas is mar­keted — pri­mar­ily through a pay at the pump method. Pay at the pump will work by lim­it­ing the max­i­mum amount of pur­chase, but min­i­mum pur­chases would have to be di­rected through the store. Con­sid­er­ing that many stores to­day op­er­ate with as many as 48 fu­el­ing po­si­tions, such a pro­gram would in­sure that there would be as many as 48 peo­ple wait­ing in line at lo­ca­tions just to pay for their gas. At about a minute and a half per trans­ac­tion, your av­er­age wait time could eas­ily ap­proach an hour, in ad­di­tion to any wait times just to get to the pump.

• Odd/ Even was an­other “ call to action.” This action plan evolved from the ’ 70s Arab em­bargo, an era when most sta­tions were full ser­vice and much smaller. In a self- serve en­vi­ron­ment dom­i­nated by pay at the pump, who would en­force this?

There are things that gov­ern­ment can do. First, the state should lobby Congress and the Fed­eral En­vi­ron­men­tal Pro­tec­tion Agency to elim­i­nate the bou­tique fuel “At­lanta gas” that must be used in the 46 coun­ties sur­round­ing At­lanta. If not elim­i­nated, the pro­ce­dure by which al­ter­na­tive fu­els can be made avail­able to our re­gion must be sim­pli­fied.

Cur­rently we are at the mercy of the Fed­eral EPA to de­ter­mine whether an emer­gency ex­ists and ap­prove oth- er fu­els. State of­fi­cials were in con­stant con­tact with the feds and had to build a case be­fore we had more op­tions.

An­other needed state ini­tia­tive in­volves the de­vel­op­ment of a pub­lic in­for­ma­tion cam­paign to help cut down on panic buy­ing and top­ping off dur­ing pe­ri­ods of sup­ply short­falls. The re­al­ity is that much of our prob­lem with lo­ca­tions be­ing out of fuel was a re­sult an ar­ti­fi­cially high de­mand, rather than a short­age of sup­ply.

For in­stance, dur­ing a pe­riod in which many New­ton County lo­ca­tions were out of fuel, ac­tual sup­ply had re­turned to 80 per­cent of nor­mal. A week later, thanks to more pos­i­tive me­dia cov­er­age, the prob­lem had ba­si­cally solved it­self even though the sup­ply had only in­creased an­other 20 per­cent. The dif­fer­ence was that mo­torists be­gan wean­ing them­selves from the need to fill up ev­ery day. Once this process be­gan, the short­age prob­lem changed quickly to the pos­i­tive.

The fuel stor­age sys­tem does not have enough ca­pac­ity that every­one can drive around with a full tank of gas. If every­one de­cided to do this to­day, we would still run out of gas without any cor­re­spond­ing weather event. When you top off dur­ing an emer­gency, you ba­si­cally drive around with some­one else’s gas.

The long term so­lu­tion in­volves is­sues that must be re­solved at the fed­eral level. Calls for ad­di­tional re­fin­ery ca­pac­ity, pipe­lines, al­ter­na­tive sup­ply pro­duc­tion and oth­ers must be ad­dressed. A pro­posal for ad­di­tional pipe­line ca­pac­ity into At­lanta re­mains stalled. There re­main too many bou­tique fu­els through­out our coun­try which ex­ac­er­bate short­age sit­u­a­tions.

The “ cri­sis” also gen­er­ated a ton of ru­mors about other po­ten­tial causes of the prob­lem. My fa­vorite was that “ the rea­son that QT had fuel more of­ten than many other re­tail­ers was be­cause it was owned by Ge­orge Bush.” Other ru­mors de­scribed fuel be­ing held by re­tail­ers who had prod­uct but wouldn’t sell it be­cause they were wait­ing for the price to go up. As de­scribed be­low, such ru­mors fly in the face of our busi­ness re­al­ity and the need to main­tain fuel at our stores.

No one en­joyed the re­cent “ cri­sis.” Re­tail­ers who were without gas found them­selves at a se­vere com­pet­i­tive dis­ad­van­tage against those who still had prod­uct and lost most of their in­side sales, where most money is ac­tu­ally made.

Higher gaso­line prices also im­pacted in­side sales as cus­tomers had to pay a higher per­cent­age of dis­pos­able in­come on fuel, rather than more prof­itable items. The per­cep­tion that higher gaso­line prices equals higher prof­its does not take into ac­count that cost in­creases of­ten out­strip re­tail changes.

It’s nice to see lower prices and in­creased avail­abil­ity re­turn to New­ton County. May the “ cri­sis” be a cat­a­lyst for us to en­cour­age stake­hold­ers to ad­dress some of the sys­temic is­sues that were the real cause of the short­fall prob­lem. Oth­er­wise, be sure to smile at the TV cam­era when you are filmed wait­ing in a long line some­time in the fu­ture.

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