The news has been so wrapped up about the financial meltdown that you don't hear about the gas shortages that are happening in the Southeast.

Matt Simmons feels that if we don't stop driving now that the entire pipeline could be drained and we would run out of food 5-7 days after that! Hopefully he is wrong but his knowledge of our energy infrastructure is amazing. I had no idea it takes about 120 days for crude oil pumped in Saudi Arabia to become refined gasoline in Atlanta. That's insane!

I also didn't know the extent of the shortages. Here is one quote from a driver made last week:

“Every few days they say it’s going to get better,” Mr. Adams said, “but it only seems to get worse.”

Anyway, check out this very interesting video by Mr. Simmons. What do you all make of this? If it's so bad how come the news stations are not all over it. Do we need to run out of gasoline before the news will come out? Just in case, you might want to stock up on the food basics. ;)


Matt Simmons video: http://www.worldenergy.tv/

Just finished talking with a bud from Columbia SC,moved there from Jersey about a year ago. If it weren't for him i wouldn't know anything about it.Week or so ago he mentioned that there are reports of tanker hijackings .Also that people actually follow tanker trucks to the stations.

Things are better for getting regular gas this week ,but forget about premium he said. $3.50 a gallon is a good price there for regular.

From reading the DOE website,there has been close to 10 times that the strategic oil reserve has been tapped since the two hurricanes hit that area. The oil is being released to refineries in Lousiana and put in the pipeline due to the disruptions in the gulf.

Here are a couple:

September 2, 2008

Statement from DOE’s Chief Spokesperson Andrew Beck Regarding Citgo’s Request for Oil from the Strategic Petroleum Reserve
Strategic Petroleum Reserve, SPR
WASHINGTON, DC– On Tuesday, September 2, 2008, the U.S. Department of Energy received a formal request from Citgo’s Lake Charles, Louisiana refinery for 250,000 barrels of oil from the Strategic Petroleum Reserve. The oil is needed because of the closure of Louisiana’s Calcasieu channel and disruptions in oil supply caused by Hurricane Gustav. The Department intends to grant Citgo’s request.


September 14, 2008

Statement from DOE’s Chief Spokesperson Andrew Beck Regarding Delivery of Strategic Petroleum Reserve Oil
WASHINGTON – The U.S. Department of Energy has agreed to deliver 200,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to ConocoPhillips Company’s Wood River refinery along the Capline pipeline system.

The Department will also deliver an additional 109,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to Placid Oil’s Port Allen refinery along a Shell pipeline in Louisiana.

The oil was requested by ConocoPhillips and Placid Oil because of disruptions in supply caused by Hurricanes Gustav and Ike. The deliveries will begin today.

October 8, 2008

Statement from DOE’s Chief Spokesperson Andrew Beck Regarding Delivery of Strategic Petroleum Reserve Oil
WASHINGTON, DC - The U.S. Department of Energy is delivering 100,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to Alon USA’s Krotz Springs, Louisiana refinery.

The oil was requested by Alon because of disruptions in supply caused by Hurricanes Gustav and Ike.

Media contact(s):

Just finished talking with a bud from Columbia SC,moved there from Jersey about a year ago. If it weren't for him i wouldn't know anything about it.Week or so ago he mentioned that there are reports of tanker hijackings .Also that people actually follow tanker trucks to the stations.

Things are better for getting regular gas this week ,but forget about premium he said. $3.50 a gallon is a good price there for regular.

From reading the DOE website,there has been close to 10 times that the strategic oil reserve has been tapped since the two hurricanes hit that area. The oil is being released to refineries in Lousiana and put in the pipeline due to the disruptions in the gulf.

Here are a couple:

September 2, 2008

Statement from DOE’s Chief Spokesperson Andrew Beck Regarding Citgo’s Request for Oil from the Strategic Petroleum Reserve
Strategic Petroleum Reserve, SPR
WASHINGTON, DC– On Tuesday, September 2, 2008, the U.S. Department of Energy received a formal request from Citgo’s Lake Charles, Louisiana refinery for 250,000 barrels of oil from the Strategic Petroleum Reserve. The oil is needed because of the closure of Louisiana’s Calcasieu channel and disruptions in oil supply caused by Hurricane Gustav. The Department intends to grant Citgo’s request.


September 14, 2008

Statement from DOE’s Chief Spokesperson Andrew Beck Regarding Delivery of Strategic Petroleum Reserve Oil
WASHINGTON – The U.S. Department of Energy has agreed to deliver 200,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to ConocoPhillips Company’s Wood River refinery along the Capline pipeline system.

The Department will also deliver an additional 109,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to Placid Oil’s Port Allen refinery along a Shell pipeline in Louisiana.

The oil was requested by ConocoPhillips and Placid Oil because of disruptions in supply caused by Hurricanes Gustav and Ike. The deliveries will begin today.

October 8, 2008

Statement from DOE’s Chief Spokesperson Andrew Beck Regarding Delivery of Strategic Petroleum Reserve Oil
WASHINGTON, DC - The U.S. Department of Energy is delivering 100,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to Alon USA’s Krotz Springs, Louisiana refinery.

The oil was requested by Alon because of disruptions in supply caused by Hurricanes Gustav and Ike.

Media contact(s):




Well, It's good that they are releasing oil from the strategic reserve in order to make more gasoline. That's a 30 day process so hopefully we won't have to go into rationing. From what I understand we are still close to 20% down on gasoline production due to the hurricanes and that will be a bit slow coming back. People, get out your bikes and help with this situation! Take that bike down to the supermarket and buy yourself a huge bag of rice... Just in case. Oh, don't forget to make sure you have enough water.

Most of the problem is that we have (count'em) 16 different types of fuel in the US. Reduce the total to 6, and most of this type of crap goes away.

If supply affects price, then we are in a sea of oil. The local independent gas station just dropped the price of a gallon of UL 87 from $3.24 on Monday to $2.97 today. And that's including at least two bits for tax. How is the price fairing in the Gulf as of today ???

If supply affects price, then we are in a sea of oil. The local independent gas station just dropped the price of a gallon of UL 87 from $3.24 on Monday to $2.97 today. And that's including at least two bits for tax. How is the price fairing in the Gulf as of today ???





I think it's important to distinguish between oil and processed fuels like gasoline and diesel. For example, we can have 10 oil tankers in the gulf filled with oil ready to be converted into gasoline yet still have a huge problem. If our refineries are down due to storm or maintenance then there is nothing that oil can do. Additionally, the price of the gasoline is determined by the price of that cheap oil sitting in that gulf. Thus, we will just get to shortages and there is a risk that our system can be drained of gasoline. If there is no processed fuel ready to go, trucks and cars can't run. Even if we have plenty of oil.

This happens in China where the price of gasoline is subsidized. They can't keep up with producing enough gasoline and thus they have huge lines at gas stations every morning. Plenty of oil, not enough refining capacity. This is the problem that people are trying to address and to bring awareness to. Who knows how close we came to a crisis after those hurricanes but some feel we came too close for comfort. Perhaps building an adequate strategic reserve of distillates and a plan of action should things fall below a given level (rationing strategy) would be a good idea. Might make Matt Simmons sleep better at night. Poor guy is looking worn lately. I guess for the rest of us ignorance is bliss.

So what is the price of a gallon of 87 UL in gulf Texas today ???