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Storm puts kinks in fuel supply lines

Storm puts kinks in fuel supply lines

Power outages and refinery woes will likely cause waits for fill-ups

By BRETT CLANTON and KRISTEN HAYS Copyright 2008 Houston Chronicle

Sept. 13, 2008, 11:57PM

Residents who heeded warnings to fill up gas tanks before Hurricane Ike will likely be glad they did.

Many gas stations in the area could be closed for several days because of power outages and storm damage, while refinery and fuel terminal closures in the region could slow replenishing of fuel supplies.

“Once they open up, it’s going to be a bottleneck because 95 percent of the stores are going to be wanting gas,” said Mohammed Ali Dhanani, who owns a few dozen gas stations in the Houston area under the Shell, Exxon and Chevron brands.

Many area gas stations were already running on empty after thousands of residents in the region gassed up for evacuations or filled extra storage tanks in preparation for the storm.

Shell Oil said half of the Shell-branded stations in Houston and Galveston were without fuel Friday; other oil companies also reported stations out of gas before Ike’s arrival.


Awaiting OK

Gretchen Fox, spokeswoman for the Texas Fuel Team, said the state deployed preliminary damage assessment teams Saturday afternoon to determine when it’s safe to bring in critical personnel to get fuel infrastructure back online. 

Those personnel include generator operators and tanker truck drivers on standby at Tully Stadium in Houston and Wolfe Stadium in San Antonio, as well as other locations.

“That’s not something that happens in an hour,” she said.

Like the state, companies also stood ready to restock gas stations. Valero Energy Corp. was preparing to send in “loss prevention teams” equipped with generators and other equipment necessary to reopen fuel stations, company spokesman Bill Day said.

Shell said it will assess, repair and reopen its stations as quickly as possible and will send generators to stores where needed. Exxon Mobil Corp. was moving fuel supplies from areas not affected by Ike into the Houston-Galveston region, said company spokesman Kevin Allexon.

But as recovery plans were made, gas station store owners in the area were nervously biding their time.

“If you’re not generating revenue, it puts us in a big hole,” said Azam Zakaria, owner of about 20 Shell and Valero stations in the Houston area.

Meanwhile, oil refiners with plants on the Texas Gulf Coast were only beginning to assess damage Saturday.

Valero, the nation’s largest refiner, sent inspection crews to refineries in Texas City, Houston and Port Arthur. Day said late Saturday that they found no significant damage to production units, but the plants don’t have electrical power. Day said crews are working with power providers.


Assessing damage

Valero’s refineries also are developing startup plans, but Day said they had no timetable for when startup will begin or how long those processes will take. 

Exxon Mobil and other refiners also were assessing damage.

In a briefing in Washington, U.S. Homeland Security Secretary Michael Chertoff said he expects it will take another day to determine Ike’s full impact on refineries,

But a report from Shell’s massive Deer Park refinery and chemical complex at the Houston Ship Channel suggested damage could turn out to be less than feared.

The U.S. Energy Department said Saturday that Ike prompted shutdowns of 14 refineries in Port Arthur, Houston, Texas City and Corpus Christi.

Those plants process a combined 3.8 million barrels a day, or 22 percent of the nation’s daily refining capacity. They include Exxon Mobil’s Baytown refinery, the nation’s largest, and BP’s Texas City plant, the second-largest. Other Gulf Coast refineries were operating, though some at reduced levels.

Dow Chemical’s plant in Freeport survived Ike with a small chlorine leak that was fixed within minutes, said Dow spokeswoman Tracie Copeland. She said 125 workers stayed on site through the storm. Early assessments showed the plant sustained no flooding, largely thanks to a 15-foot levee.

The U.S. average price for regular gasoline jumped nearly 6 cents to $3.73 a gallon Saturday, while Houston’s average price spiked almost a nickel to $3.54 a gallon, according to AAA’s Daily Fuel Gauge Report.

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