ATL Gas Shortage - Questions for those of you in the Petroleum Business

[Andre]

it have gas problem in atlanta. short supply, long line, all kinda bacchanal.

the reasons for it below. i feel is all bullshit. how it could take so long to get a refinery online & fix a pipeline?

they need trini engineers!

anybody in the petroleum sector have any thoughts on this?

ah feel is a plot by the big oil companies to make people used to $5 US a gallon.

http://www.ajc.com/metro/content/metro/stories/2008/09/28/gas_shortage_explainer.html

Many factors combine to fuel gas shortage

By TAMMY JOYNER

The Atlanta Journal-Constitution

Sunday, September 28, 2008

By the time you stick the nozzle of regular unleaded gasoline into your tank, your gas has endured an elaborate refining process and snaked through hundreds of miles of pipeline. Last week’s long lines and sea of plastic bag-draped pumps tell only part of the story. Here’s what’s going on, according to officials at the U.S. Energy Information Administration and the American Petroleum Institute:

GAS SHORTAGE
Pair caught siphoning gas in Kennesaw
Douglas County: Don't call 911 in search for gas
Two more weeks of gas chaos, official says


Q: Why are we having gas shortages in Atlanta?

A: Hurricanes Gustav and Ike hit back-to-back. The refineries shut down in anticipation of Gustav. Then Ike hit and the gas production and refineries didn’t restart because of power outages. That also affected the operation

of major pipelines that move gas from refining areas in the Gulf Coast to facilities throughout the Southeast.


Q: How long will the gas shortages last?

A: It’s hard to say. There are pockets of surging demand. People are trying to top off more in fear of shortages, so people are buying more gas than they’d normally buy. But this will not be a permanent situation.


Q: Why does it seem that there’s more of a shortage now than after Hurricane Katrina?

A: The stockpiles of gasoline and other products are lower now than after Hurricane Katrina. So current shutdowns are mainly due to power outages in the areas where there are refineries. The good news is they’re starting to come back online. Production will be restored faster than it was after Katrina and Rita because the refineries weren’t damaged as badly. As of Friday, only four of 56 Gulf Coast refineries remain closed.


Q: Have other places been as hard-hit as Georgia?

A: Mainly North Carolina and Georgia. One reason for Atlanta’s shortage was the area’s requirements for a special type of fuel. It’s a unique fuel affecting the sulfur content that’s required in 45 counties in Georgia. But the temporary waiver of the reformulated gas, combined with more refineries coming back online, should ease the shortage.


Q: The Northeast seems to have escaped the shortages? Why?

A: They have more supply options in the Northeast. There are more refineries along the way and they get supply from other parts of the country, in addition to the Gulf Coast refineries and pipelines. The Southeast depends mostly on Gulf Coast refineries and pipelines.

[grimm01]

It's not only GA. A partner of mine in Charlotte say his wife had to rent a car to get a full tank of gas.

[Dutty]

It's not only GA. A partner of mine in Charlotte say his wife had to rent a car to get a full tank of gas.

 

[real madness]

The shortage in Atlanta is mostly due to people creating a scene by "rushing" for gas.  There is no conspiracy by the large oil companies.  If you look at the national average, the price has dropped during the past week even in areas such as Houston.  The issue of the reformulated gas was quickly addressed by the waiver.

FYI....the profit margin on fuel at the pump is not very high.  Although oil companies has made a lot of profit in the past few years, most of them have experienced losses in their downstream activities (i.e. refining, service stations, etc.). The items that provide the highest profit margin at a gas station are things such as beverages, candy, etc. (note I am talking about profit margin and not revenues).  In most cases the price at the pump is determined by the owner and not the oil company (especially in #2 and #3 below).  Generally there are three types of service stations
1) station owned and operated by oil company
2) station owned by company and operated by retailer
3) station owned and operated by retailer

Most oil companies are moving away from owning gas stations because of its low profitability.
For example in situations #2 and #3, the pricing team at the oil company will recommend a lower price at the pump to get customers in the service stations  versus choosing the competitor because people tend to buy from the "convenience store" at the station.  However, the operators usually go against these recommendations.

[elan]

They just scare these American into anything. I went to practice one of the parents came up to me and say you need to fill up your tank as there will be a shortage. I was like how do you know that? The hurricane gonna hit and there will be no gas cause it hitting the oil refinery.

I was like you all could eat chain up boy  - he wanted to know if chain up is a local dish cause he never tried it- and proceeded to explain that if everyone panicked and rushed to buy gas then obviously there will be none at the gas station.

[ricky]

The shortage in Atlanta is mostly due to people creating a scene by "rushing" for gas.  There is no conspiracy by the large oil companies.  If you look at the national average, the price has dropped during the past week even in areas such as Houston.  The issue of the reformulated gas was quickly addressed by the waiver.

FYI....the profit margin on fuel at the pump is not very high.  Although oil companies has made a lot of profit in the past few years, most of them have experienced losses in their downstream activities (i.e. refining, service stations, etc.). The items that provide the highest profit margin at a gas station are things such as beverages, candy, etc. (note I am talking about profit margin and not revenues).  In most cases the price at the pump is determined by the owner and not the oil company (especially in #2 and #3 below).  Generally there are three types of service stations
1) station owned and operated by oil company
2) station owned by company and operated by retailer
3) station owned and operated by retailer

Most oil companies are moving away from owning gas stations because of its low profitability.
For example in situations #2 and #3, the pricing team at the oil company will recommend a lower price at the pump to get customers in the service stations  versus choosing the competitor because people tend to buy from the "convenience store" at the station.  However, the operators usually go against these recommendations.

thank you brother, you saved me some typing there
oil companies make money by selling on the spot market, there is no money in gas