STOCK MARKET WATCH -- Tuesday, 29 October 2013

[Demeter]

2. Fuel Supply System Fixes Pick Up Gas After Superstorm Sandy

http://www.npr.org/2013/10/29/241415235/fuel-supply-system-fixes-pick-up-gas-after-superstorm-sandy?ft=1&f=1001

One of the effects of Superstorm Sandy a year ago could be seen at service stations throughout New York City and surrounding areas: motorists joined long lines outside the few stations that had both electricity and gasoline...Since then, the oil industry and policymakers have been working to shore up the region's fuel supply system. To fix the power problem, New York and New Jersey announced grant programs to help station owners install wiring to quickly hook up mobile generators. But the long lines were about more than just the lack of power. "I'm of the view that most of the problem came with the panic behavior by the public," says Tom Kloza, chief oil analyst with Gasbuddy.com. He says next time governors should begin rationing gasoline sooner because that helped calm the panic.

The fuel supply problems went well beyond gas stations though. The storm surge from Sandy damaged local supply terminals, those big, round tanks that are often found near water. Kloza says these can't be moved to higher ground...While many of these facilities have been there for decades, climate change could mean that a facility that was once above flood level now is not. Making those facilities more resilient will require significant work. "It could be looking at berms, looking at elevating cables, looking at elevating motors — other equipment that traditionally has been at ground level, we need to raise that above that flood plain level to ensure that salt water doesn't impact that infrastructure," says Patricia A. Hoffman, assistant secretary for the Office of Electricity Delivery and Energy Reliability at the U.S. Department of Energy.

'Everybody's Blind'

Near some large tanks and a warehouse, Paul Riggins, president of Riggins Oil Company in Vineland, N.J., points to a shiny yellow-and-black generator that he installed last year. It cost $75,000 and it'll allow him to pump gas and diesel into his fleet of tanker trucks even if the electricity goes out. He was deluged with requests for fuel after Sandy and had to choose which shipments to prioritize. Riggins says he learned some valuable lessons during Sandy. For example he always assumed delivering generator fuel to police stations and medical facilities was the priority. But authorities told him that one of the most important things to keep running is cell phone towers. "Because they said, you know, without communication the fire, the police, the hospitals everybody's blind," Riggins says he meets regularly with government officials now. That helps policymakers understand his challenges during a disaster too. Since most of his customers buy on credit, a sudden surge in business can become a problem.

"We actually got into a position where we had $7,000 left in our bank account and every credit line with banks and suppliers extended," he explains. "And we had a million dollars in orders the next day. And it was like, 'OK, what are we going to do here?'"

N.J. Gov. Chris Christie's office helped him get quick access to more credit so he could continue delivering fuel... considering all the things that can go wrong, there is still a lot more work the country needs to do to protect its fuel supply system.