Hurricane Ike, Gas Prices and Insanity in North Carolina
First, I should admit my bias. I don't pay a lot of attention to gas prices. I don't ride around town to find the cheapest gas. I figure I've gotta buy it when I've gotta buy it, and there's just not a lot I can do about it. Shopping for the best price saves pennies at best, and my time is more valuable to me than that.
Yes, I work at home, so you might say it's easy for me to have this attitude, but the truth is, I felt the same way when I traveled for my job. I drove all over North and South Carolina, Georgia, and occassionally Florida. I filled up before I left home, and I filled up again when I got below a quarter of a tank, regardless of where I was or how much the gas cost. After an exit from the interstate, I picked the gas station that allowed me to get back to the interstate in the easiest traffic flow, not the one that might have one cent less per gallon regular unleaded.
So when my sister called yesterday to say, "You better go fill your gas tanks up," I only gave it half a thought. I considered calling my husband to suggest he fill up on the way home, but then never actually got around to it.
Julia said that in Greenville, NC gas had jumped from $3.59 a gallon to $3.99 in an hour, and that they were limiting your purchase to 10 gallons. I jumped on my favorite local news station's website but did not see any crazy gas-price headlines, and a search for "gas ration" returned zero results.
Later in the day, my friend Jackie called while waiting in line to fill up her Jeep in Wake Forest, NC. We had plenty of time to gripe about the prices, the oil companies, and the reaction of our fellow citizens. She did have to cut the conversation short before she made it to the pumps, however, because she felt the need to put on her defensive driving hat in the gas station parking lot, thanks to rude drivers cutting off others approaching the pumps and blocking those trying to exit.
I decided to take another look at wral.com. Gas prices were suddenly in the headlines. I read that one of my usual stops (not because it's cheap, but because it's around the corner from my house), Murphy USA, the "Walmart gas station", had 65 cars in line! I knew that would mean traffic backed up to South Main. There was NO WAY I was going to join the madness to fill up my tank, even though I remembered my fuel light had come on the previous night.
My husband, stepson and I went out for dinner Friday night and the BP across the street from the Murphy House was hopping. Regular unleaded was $4.19 a gallon. The Murphy House still had a line half way to South Main at $3.99 a gallon. We came home after dinner with my fuel light still on.
How legitimate are the fears that Ike will affect our oil supply?
According to WRAL, "The price increase came despite a significant drop for crude oil prices on the futures market Friday - prices briefly sank below the psychologically important $100-a-barrel mark for the first time since April 2 before settling at $101.18."
Mark Shenk quotes Gene McGilian, an analyst at TFS Energy LLC in Stamford, Connecticut, saying "The oil market is shrugging off the impact of Hurricane Ike." Shank continues in his Bloomberg article that McGillian said, "Investors are more concerned about the fallout from the poor economy than the storm threat." But the same article goes on to cover a "Nightmare Scenario", reporting that Ike's storm surge will "completely inundate all the refineries and chemical plants that line Galveston Bay from Texas City all the way to Baytown."
In NC and other southern states, the issue is not the price of crude oil; it is the supply of gasoline from the Gulf. I read yesterday that one fifth of NC's supply is from the Gulf, but now that I want to know whether that meant refined or crude, I can't find the source. I did find this source that says "About 18 percent of U.S. oil processing capacity has been shut before Ike makes landfall today. More than a quarter of U.S. crude production is based in the Gulf Coast region. Evacuations have halted 97 percent of Gulf oil output, the Minerals Management Service said yesterday."
It frustrates me to see the prices rise even before Ike hit land, but apparently I don't understand much about the industry.
"The traditional practice in the business is that you charge for your replacement costs not for the costs of the product you are selling right now," said Tom Crosby, a spokesman for AAA Carolinas in "Hurricane Ike Fuels Higher Gas Prices, Shortages" (Winston Salem Journal, September 12, 2008).
I also do not understand why gas prices are higher in the western part of the state and lower at the beach. My sister, Deborah, saw the same trend in South Carolina. As she traveled east from Bluffton to Hilton Head Friday night, she saw the prices drop, from $4.29 to 3.99 a gallon. Deborah said her management gave employees with company vehicles the instructions to fill up Thursday. She paid $3.59 a gallon Thursday and the next morning the same station was selling gas at $4.69. She was happy to have saved over a dollar a gallon but wondered how her company knew while friends and family blew off her warning since they had not seen anything on the news.
If you tell me that I'll save $1 a gallon if I fill up today instead of tomorrow, how likely am I to rush to the gas station? Well, assuming my fuel light is on, I can save $16. How much is $16 worth to me? It depends. How busy am I at work? How long are the lines already? (I mean, if my fuel light is on, will I run out of gas waiting in line?) How much is that $16 really going to help me if prices triple in the coming weeks,as some have told me they have "heard" will happen in North Carolina?
I pulled out of my driveway this morning for a cigarette run (I know, I know...I'll quit one of these days.) forgetting about the gas price issue until I saw my fuel light smiling at me. "Oh no," I thought. "I hope there are not lines." I had to get gas at this point. We had already pushed the empty tank, and I had errands to run and had to chauffer my daughter to her current France-trip fund-raising job.
Thankfully, the BP station on my left looked sane when I passed, and on my right, Murphy was no worse than usual on a Saturday. I only waited for one car in front of me to fill up. When it was my turn, I pulled up as far as I could to still reach my tank reasonably well, conscious that someone behind me might be blocking traffic while they waited. They lady behind me stuck her head out of the window to ask, "Can't you pull up so I can pull up, too?"
I'm sure I looked puzzled, glancing around thinking how can I possibly pump my gas if I pull up more, and wondering what in the world she was thinking. She realized then that the pump in front of me was diesel and apologized, but then went on to chat while I pumped.
She said she spoke to her son near Waco,TX, last night and he said their gas prices had dropped yesterday. How crazy is that?
Sure enough, according to gasbuddy.com, today (September 13, 2008) Houston ranges between $3.27 and $3.33. I know, I know...it's the delivery and transporation costs, right? But why do we have a range of $3.59 to $4.19 in Wake Forest? Why in North Carolina do we have a range of $3.46 to $4.99?
Those last questions are somewhat rhetorical. We have the prices because we will pay them. To some extent, we have those prices because we rush to the pumps, afraid to pay even more, and thus limit the supply, not that I really blame anyone. My sister, Julia, and my friend, Jackie, both have to work out of town next week. They didn't fill up in reaction to the prices as much as they did out of fear of shortages.
Julia reported that in Greenvile there were rations. My news sources claim that some stations posted signs requesting customers only purchase 10 gallons at at time, but none turned off the pumps after 10 gallons, so rationing appears to be an exaggeration. Still the signs and the price increases induced panic yesterday.
It concerns me we all feel so vulnerable, not just to gas prices, but to a basic feeling of helplessness, at the mercy of the big corporations and of our government. I realize my head-in-the-sand, "what can you do about it" attitude is no better. I'm with the masses when we gripe and whine about the greed of big oil companies. But it seems to me that the rush to the pumps in North Carolina on Friday, September 12, 2008, contained an element of greed in consumers, too.
I'm glad Govenor Easly is in the news, reminding companies of our state's laws against price gouging. I'm glad to hear the governor of Florida assure his citizens that they have an adequate supply of fuel. But the cynic in me really wonders about Bush lifting the ban on fuel imports.
What jumps out at me about this lift is the "we suspended EPA (Environmental Protection Agency) waivers on certain reformulated gasoline" part. How long will this lift last? What will be the effect on our environment?
I have at least 222 pages of intense reading to finish before I can even begin to offer an opinion as to how long I think it should last, if it should ever have been lifted to begin with, or even if I really think the ban should be in place (I know the EPA is not perfect). I'm not an expert on the subject. I did find quickly in Doug Simpson's blog about the Federal Trade Commission's Investigation of Gasoline Price Manipulation and Post-Katrina Gasoline Price Increases that "While these led to retail gasoline price rises of 50 cents and 25 cents respectively, the prices had returned to pre-Katrina levels by December 2005."
i have confidence gas prices won't break us. Not our spirit, anyway. How soon our pocket books recover may very well depend on how much all of us are willing to simply think before the November election.
Copyright Dineane Whitaker 2008 - Please do not copy and paste this article, but feel free to post a link using this url: http://hubpages.com/_ndwcopyright/hub/Hurricane-Ike--Gas-Prices-and-Insanity-in-North-Carolina
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