Posted in: Infrastructure,
by Gregg Laskoski on Aug 25, 2012 07:30 AM
As tropical storm Isaac approaches Florida, its' timing is all too similar to Hurricane's Gustav and Ike, two storms that unexpectedly delivered extensive damage to the entire southeastern U.S. in late August and early September of another election year, 2008.
The two hurricanes pummeled much of the nation's oil refining infrastructure delivering widespread power losses throughout the southeast triggering gasoline price spikes and consumer anger. In Atlanta, for instance, by mid-September of 2008, that city saw the highest fuel prices ever recorded when regular gasoline spiked from $3.45 (pre-hurricanes) to an average of $4.30.
Damage from Ike was estimated at $37.6 billion making it the second most destructive U.S. hurricane on record, behind Katrina in 2005. It was the most destructive hurricane in Texas history. At one point, the diameter of Ike's tropical storm and hurricane force winds were 600 and 240 miles (965 and 390 km), respectively, making Ike the largest Atlantic hurricane ever recorded.
So what did we learn from all this?
We learned that consumers who panic actually help cause fuel shortages and add to the severity of retail gasoline price spikes, slowing down the recovery process.
Especially when refineries and pipelines lose power, supply and distribution will be significantly reduced. But what many retailers and fuel distributors have experienced is exactly what the Gainesville Times reported in 2008; that long lines of motorists filling up every legal receptacle in their possession "devastates the logistics" of keeping fuel at stations while suppliers and retailers try to rebound from the storm.
Many consumers may feel insecure if their vehicle has half a tank of gas or less... But unless you actually have to travel a long distance immediately --by car-- there is no logical reason to create a stampede to the gas stations and convenience stores just so you can buy gas that will quietly sit in your car in your driveway or garage. Don't become part of the problem.
Remember too that hurricanes also create 'demand destruction'. Unless you have to travel, there's no reason to be out on the road in adverse weather conditions. And when everyone is staying put, that greatly reduces demand for gasoline.
So if you hear that the local gas station just raised prices by 5 cents a gallon, that doesn't mean you have to go into panic mode and go buy gas you don't need. If you do that, you're helping to disrupt the conventional shipment schedule of the retailers and their distributors and, in turn, you'll be contributing directly to even greater retail fuel price spikes.
Don't lose your head. Stay calm and that will help keep any local or regional fuel supply problems to a minimum, instead of turning a little problem into a much bigger one.
Stay informed. Be prepared. Be sure you have a battery-operated radio that can give you important weather updates. And if you are advised to evacuate, please follow the directives from FEMA or local authorities. That may save your life.