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Localized Gas Shortages Occur: Stations Have to Clear Water Out of Storage Tanks to Accept New Blend

Posted on: Saturday, 22 April 2006, 06:00 CDT

By Allison Connolly, The Baltimore Sun

Apr. 22--As if gas prices topping $3 a gallon weren't enough, drivers might pull up to their local station in the next few weeks and find no gasoline at any price.

It has happened at some stations in the Philadelphia area and parts of Virginia over the past two weeks, and similar spot shortages are expected in Maryland and other areas as gas stations switch over to a more environmentally friendly fuel.

The problems should be resolved by Memorial Day, just in time for the busy summer travel season, said AAA Mid-Atlantic spokeswoman Ragina Averella. But until then, some gas stations might have regular unleaded but be out of premium. Or, a station could be out of gas for a day or two as the tanks are emptied to make room for the new gas.

"We're in what we call a transition period," said F. Peter Horrigan, president and executive director of the Mid-Atlantic Petroleum Distributors' Association.

It's a problem that has nothing to do with gasoline or oil prices, or supplies.

As of May 5, because of a change in federal regulations, suppliers and retailers will no longer be required to have an oxygen-boosting additive in their gasoline. The most widely used additive has been methyl tertiary-butyl ether, or MTBE. It helps gasoline burn more cleanly but has also contaminated drinking water in wells across the country, including in Maryland. Several states, including New York and Connecticut, already ban the use of MTBE.

As of that date, manufacturers and suppliers are no longer shielded from lawsuits over MTBE. So refiners are rushing to replace MTBE with ethanol, a safer, corn-based additive that allows them to still meet federal clean air laws.

However, unlike MTBE, ethanol has to be transported separately from gasoline because it has a chemical affinity for water, which is present in gasoline. If ethanol-blended gasoline gets mixed with water, the ethanol is pulled from the gasoline into the water, affecting a car's performance.

That means ethanol can't be sent from refineries through pipelines; it might pick up tiny amounts of water in the piping.

It must be sent by truck, rail or barge to a terminal, where it is added to the gasoline just before the gas is put on trucks headed for service stations.

To accept the ethanol-based fuel, station owners have to remove all traces of water from their tanks, which can take a day or two.

"They [suppliers] only gave dealers two weeks to get ready," said Jeff Dolch, the owner of St. Paul Amoco Auto Care on Mount Royal Avenue in Baltimore.

Dolch will pay a company $85 an hour today to pump any water out of his tanks. He also had to buy a dozen special filters for the tanks, at a cost of $144. But he says he'll be ready for the 8,500 gallons of ethanol-based gasoline when it arrives either tomorrow or Monday, during his normal delivery.

He doesn't expect to shut down his pumps for any length of time, unlike his counterparts in Philadelphia.

"I don't think those guys were ready," Dolch said.

Urban areas such as Philadelphia are feeling the crunch much more than rural areas. The Clean Air Act Amendments of 1990 require areas with unhealthful levels of air pollution to use oxygenates in gasoline. Refiners have a choice about which oxygenates to use, but they typically chose MTBE over ethanol because it's cheaper.

In the Philadelphia area, tanker drivers have been waiting in lines for hours outside terminals to receive the reformulated fuel with ethanol, according to the Pennsylvania Petroleum Marketers and Convenience Store Association.

Late yesterday, the Pennsylvania Department of Transportation said it would temporarily extend the allowable driving time for tanker drivers in the Philadelphia area by three hours.

In Cecil County, the Maryland county closest to Philadelphia, a rush of customers at the Citgo off Route 279 in Elkton - lured by gas prices 10 cents a gallon lower than many competitors' - left the storage tanks running low.It took Elizabeth Burkins of Newark, Del., just across the state line, about 15 minutes to pump $7.44 worth of gas into her car.

"I'm trying to drain this pump," Burkins, 22, said as the fuel trickled into her tank.

She succeeded - before long Burkins pumped the station's final few drops. "I feel like we're going to be a Third World country," she said.

Station manager Avtar Singh then got busy placing plastic crates next to his six pumps to indicate to motorists that the station was dry. Singh said he had called his supplier Thursday night to put in a request for more fuel. "I knew what was going to happen," he said.

Late yesterday, he was awaiting a tanker truck to arrive and replenish his supply.

Once the switch is made, Baltimore shouldn't have a problem receiving ethanol shipments because of its location on the Eastern Seaboard and its proximity to rail lines and highways, said Michael Burdette, senior analyst at the U.S. Energy Information Administration, part of the the Department of Energy.

Drivers won't have to do anything different when they fill up with ethanol-based gasoline at the pump. But they will likely pay more for it because it is difficult to transport and costs a bit more than MTBE to produce, Horrigan said.

According to AAA, the national average price of regular unleaded yesterday was $2.86 a gallon, compared with $2.22 a gallon a year ago. In Maryland, the average price of regular unleaded yesterday was $2.90 a gallon, up 68 cents from a year ago. But prices could soar well above that this summer if demand for the reformulated gas outpaces supply.

Doubts have been raised whether the country has enough ethanol supply to meet the spike in demand, which could cause shortages and drive prices up still more this summer. Before refineries began making the switch, ethanol production was already at 100 percent capacity, Burdette said.

Ethanol producers, mainly in the Midwest, will see a sharp increase in demand now. Gary Caruso, administrator of the U.S. Energy Information Administration, told a Senate committee last month that an additional 130,000 barrels of ethanol a day might be needed to meet new demand.

"Close to 100 percent of them are switching over," Burdette said of the big suppliers.

More ethanol producers are coming on line, according to the Renewable Fuels Association, the national trade group that represents ethanol producers.

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Copyright (c) 2006, The Baltimore Sun

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Source: The Baltimore Sun, Maryland

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