THE NEW YORK TIMES: East Coast Gas Stations Face Shortages

Filed at 6:44 p.m. ET

PHILADELPHIA (AP) — Scattered gas stations from New Hampshire to Virginia are facing temporary shortages as the industry grapples with a transition to more ethanol-blended fuel.

Analysts and industry officials said occasional shortages are possible for another few weeks, though they emphasized that the problem has more to do with delivery schedules than a dearth of fuel. Empty pumps are not nearly as frequent as they were after Hurricane Katrina, which knocked out the electricity needed to run pipelines delivering fuel from the Gulf Coast to the rest of the country.

The supply hiccups have occurred as refiners stop using the gasoline additive methyl tertiary-butyl ether, or MTBE, and instead replace it with the more environmentally friendly fuel, ethanol, which in the U.S. is mainly derived from corn. MTBE has been found to contaminate groundwater and refiners are worried about costly lawsuits from municipalities.

''It pretty much caused the whole industry to stampede into the use of ethanol,'' said Geoff Sundstrom, a spokesman for AAA's national office.

But the shortages have not been caused by any lack of supply. Instead, fuel distributors say they are experiencing logistical challenges as terminal owners drain their tanks of MTBE-laced gasoline in preparation for the switch to ethanol blends. As a result, some retailers have had to wait longer than usual for deliveries and pumps have run dry in the interim — an outcome one distributor referred to as ''ethanol hell.''

The Northeast — with the exception of New York and Connecticut, which switched to ethanol last year — and Texas are the two regions most affected by the switch because of their heavy use of MTBE-blended gasoline. Particularly affected are Philadelphia, Baltimore, Washington, D.C., Richmond, Va., and parts of Delaware and New Jersey, Sundstrom said. Parts of Texas had shortages two weeks ago.

California switched to ethanol two years ago, while most other states aren't users.

Certain regions are required by federal law to use reformulated gasoline to cut down on pollution. For example, Philadelphia and surrounding counties have a mandate but it's not a requirement for most of the rest of Pennsylvania, according to the Pennsylvania Petroleum Marketers and Convenience Store Association in Middletown, Pa.

Another logistical complication with ethanol is that it cannot be shipped through pipelines because water molecules in the pipelines will stick to it, creating problems for motorists' vehicle engines. Instead it has to be transported by truck, rail or barge from the Midwest. The concerns about mingling various fuel supplies is why terminal owners must scrub their tanks clean after draining them of MTBE-blended gasoline.

Last week, a Motiva terminal in Newark, N.J., that disperses ethanol-blended gasoline had to replace its supply entirely after water seeped in, prompting complaints from drivers. ''Customers were pulling away and not getting very far,'' said Stan Mays, a spokesman for Motiva, a joint venture of Shell and Saudi Refining Inc. He said the problem has since been fixed.

With gasoline demand rising ahead of summer, trucks are idling in long lines at terminals, waiting for their turn to get the new reformulated gasoline, the Pennsylvania petroleum group said.

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

The move should help alleviate a temporary shortage affecting some gas stations because drivers will have more time to fill up tankers and deliver gas. The waiver ends after midnight on April 26.

With gasoline demand rising ahead of summer, trucks are idling in long lines at terminals, waiting for their turn to get the new reformulated gasoline, the Pennsylvania petroleum group said. And earlier this week, eight gas stations in Philadelphia and Wilmington, Del., told AAA they ran out of MTBE gasoline while awaiting the new formulation. Two have since been resupplied.

Tracey Bing, an employee at a Lukoil station in Philadelphia, said the gas station waited 29 hours before getting its ethanol gas at 4 a.m. Friday.

''We just shut down the gas and we only had premium available,'' he said.

Late Friday, the Pennsylvania Department of Transportation said it would temporarily extend the allowable driving time of gas tanker drivers by three hours in the Philadelphia area, which will give drivers more time to fill up tankers and deliver gas. The waiver ends after midnight on April 26.

The situation is improving, said Shannon Breuer, a spokeswoman for Sunoco Inc., a petroleum refiner and marketer in Philadelphia with 4,700 gas stations, concentrated mainly in the Northeast.

''The shortages have been very shortlived,'' she said. ''We do have a commitment to have the rollover, the switch from MTBE to ethanol by May 6.''

Traditionally, the switch to cleaner burning fuel specifications before summer contributes to rising prices, said Jeff Lenard, spokesman for the National Association of Convenience Stores. This year, the transition to ethanol is causing some further price increases.

On Friday, the average nationwide price of gasoline was $2.86 a gallon, about 60 cents higher than the start of the year. The price of crude oil settled at a record above $75 a barrel.