In Florida, Hurricane Season Brings Fuel Worries
SARASOTA, Fla. -- A year ago, the average price for gasoline was barely over the $2 mark. Then came Hurricanes Katrina and Rita, damaging refineries, delaying ships and causing a panic at the pumps in Florida.
Spot shortages had drivers clamoring to fill up even more often than usual, further stretching supplies and helping prices to sail over $3.
Now, the Sarasota Herald-Tribune reports that once again at the edge of a hurricane season, drivers are facing a different backdrop for summer driving.
Experts say the good news is that the oil and gas industry and government officials have experience to draw on if a hurricane disrupts the supply again this summer. The bad news is just about everything else.
"It's all bad news," Ujjayant Chakravorty, a professor of economics at the University of Central Florida, told the newspaper.
Gas prices are already averaging $2.95 for a gallon of regular unleaded. That means purely by the numbers, a scenario similar to last year's devastation could push them toward the $4 mark -- or beyond. Although the refineries damaged by last year's hurricanes are finally operational again, U.S. gasoline supplies are down 8.4 percent from May 2005, the Energy Information Administration reports.
With the market as tight as it is these days, "even 5 percent is significant," Chakravorty said.
"Why is it you have some hostage situation in Nigeria or someone disrupts a pipeline (and) the prices go up at the pump in Florida? It's a very tight market internationally," he said.
Jim Smith, president of the Florida Petroleum Marketers and Convenience Stores Association, says he'll remain anxious until hurricane season is over this year. He knows how little it takes to have a huge trickle-down influence from oil prices to gas prices even as a storm is brewing.
"If somebody in the world commodities market decides that something bad is happening, regardless of whether it's bad or not, and they start bidding prices up like they are wont to do, then all bets are off," he said in the report.
Florida's vulnerability to storms in terms of receiving fuel is twofold. The state could be hit directly by a storm, but it could also be cut off from deliveries of gasoline even if a storm turns away from peninsular Florida.
"Any time a hurricane enters the Gulf of Mexico those ships aren't going to be able to move, and when those ships don't move, we don't have fuel," Smith said.
That's a scenario that can't be addressed by standard hurricane preparations like installing generators and boarding up windows.
"All the generators in the world aren't going to pump dry tanks," said David Mica, executive director of the Florida Petroleum Council, which represents oil companies.
Mica said oil companies will try to bulk up on supplies this summer, but what kind of cushion they need or want could vary. In early June, members of the Florida Petroleum Council are expected to meet with the secretary of Florida's Department of Environmental Protection.
"We're starting out with additional knowledge. I don't see us in worse shape," he told the newspaper.
That does not, however, mean that supplies won't be disrupted during a hurricane, creating what Mica calls a "burp" in the system.
Spot shortages had drivers clamoring to fill up even more often than usual, further stretching supplies and helping prices to sail over $3.
Now, the Sarasota Herald-Tribune reports that once again at the edge of a hurricane season, drivers are facing a different backdrop for summer driving.
Experts say the good news is that the oil and gas industry and government officials have experience to draw on if a hurricane disrupts the supply again this summer. The bad news is just about everything else.
"It's all bad news," Ujjayant Chakravorty, a professor of economics at the University of Central Florida, told the newspaper.
Gas prices are already averaging $2.95 for a gallon of regular unleaded. That means purely by the numbers, a scenario similar to last year's devastation could push them toward the $4 mark -- or beyond. Although the refineries damaged by last year's hurricanes are finally operational again, U.S. gasoline supplies are down 8.4 percent from May 2005, the Energy Information Administration reports.
With the market as tight as it is these days, "even 5 percent is significant," Chakravorty said.
"Why is it you have some hostage situation in Nigeria or someone disrupts a pipeline (and) the prices go up at the pump in Florida? It's a very tight market internationally," he said.
Jim Smith, president of the Florida Petroleum Marketers and Convenience Stores Association, says he'll remain anxious until hurricane season is over this year. He knows how little it takes to have a huge trickle-down influence from oil prices to gas prices even as a storm is brewing.
"If somebody in the world commodities market decides that something bad is happening, regardless of whether it's bad or not, and they start bidding prices up like they are wont to do, then all bets are off," he said in the report.
Florida's vulnerability to storms in terms of receiving fuel is twofold. The state could be hit directly by a storm, but it could also be cut off from deliveries of gasoline even if a storm turns away from peninsular Florida.
"Any time a hurricane enters the Gulf of Mexico those ships aren't going to be able to move, and when those ships don't move, we don't have fuel," Smith said.
That's a scenario that can't be addressed by standard hurricane preparations like installing generators and boarding up windows.
"All the generators in the world aren't going to pump dry tanks," said David Mica, executive director of the Florida Petroleum Council, which represents oil companies.
Mica said oil companies will try to bulk up on supplies this summer, but what kind of cushion they need or want could vary. In early June, members of the Florida Petroleum Council are expected to meet with the secretary of Florida's Department of Environmental Protection.
"We're starting out with additional knowledge. I don't see us in worse shape," he told the newspaper.
That does not, however, mean that supplies won't be disrupted during a hurricane, creating what Mica calls a "burp" in the system.