Hurricanes’ impact on local gas supply short-lived
Published 9:30 am Tuesday, September 12, 2017
For a while last week, folks who lived through the Arab oil embargoes of the 1970s may have experienced deja vu as gasoline shortages hit some southcentral Kentucky retailers.
In the wake of Hurricane Harvey and with Hurricane Irma bearing down on Florida, “out of gas” signs went up briefly at stations in Glasgow, Franklin, Morgantown and Russellville as wholesale supplies were disrupted.
In Glasgow, a Sunday-night gasoline shipment at the Shell station on U.S. 31-E ended a one-day gas drought brought about by Harvey’s impact on some 20 refineries in south Texas.
“We were out for a day,” said Rose Ervin, manager of the Shell station. “I really didn’t think we were going to run out. But it’s not like it killed us.”
Other stations, like the Murphy USA locations in Russellville and Glasgow, had a similar experience.
Rita Byrd, manager of the Murphy station in Russellville, said that station was out of gas for three days before a Thursday shipment replenished its supply.
“It was a hectic few days,” Byrd said. “A lot of it was due to people hoarding gasoline. If people had bought like they normally do, we wouldn’t have had a problem.”
Returning to normalcy seems to be the theme at most local gas stations as oil and gas production ramps back up in Texas.
“We were concerned about running out,” said Denise Bilbrey, assistant manager of the Crossroads IGA on Lovers Lane in Bowling Green. “But we had some reserves. We’re topped off now.”
Local gas prices, though, seem to have found a new normal as a result of the hurricanes.
As Harvey slammed the Houston area, retail gas prices surged by roughly 35 cents per gallon nationwide and in the Bowling Green area. Much like the water in the Houston area, those prices have been slow to recede.
Kentucky’s average gas price of $2.61 per gallon has held steady for five days, although it is down four cents from a week ago. In the Bowling Green area, Monday’s average was $2.57 per gallon, better than the national figure of $2.66.
Such figures seem high in a region that was experiencing gas prices below $2 per gallon in recent months, but fuel-industry experts say the hike is to be expected.
“Harvey shut down about 27 percent of U.S. refining capacity,” said Jim Garrity, public and community relations manager for the American Automobile Association’s East Central office in Pennsylvania. “According to the Department of Energy, we have at least five refineries still shut down. And the Colonial Pipeline was affected and still has delivery delays of up to a week.”
Brydon Ross, vice president of state affairs for the Texas-based Consumer Energy Alliance, agrees that getting the pipeline fully operational again is a key to lowering pump prices.
“The infrastructure has been hit,” Ross said. “The pipeline is the workhorse that gets fuel to where it’s needed. There will be some lag time to get that supply back online to some areas that may have experienced temporary shortages.”
Ross points out that the impact of Harvey was tempered by a recent increase in domestic crude oil production through new technologies such as horizontal drilling and hydraulic fracturing.
“We’re not close to the bad old days,” said Ross, citing the $4-per-gallon prices of 2008. “We have a lot of fuel out there, and the price of crude oil had been dropping. The production increases through hydraulic fracturing will have a long-term positive impact on pricing.”
Garrity of AAA said other factors could help fuel a drop in pump prices.
“I think prices will start coming down,” he said. “This is the time of year when demand drops off, and producers are also switching from a summer blend to a winter blend, which is cheaper to produce.
“I think we’re out of the woods in terms of seeing any more spikes in prices.”