Posted in: Infrastructure,
by Gregg Laskoski on Nov 15, 2012 05:00 AM
Two weeks after Hurricane Sandy the NY/NJ metro area continues to struggle with fuel supplies. Last week gasoline in New York's metro area, for the first time ever cost more than gasoline in Anchorage, Alaska.
Closer examination of the problems and the response by the major oil companies revealed that Big Oil's company-owned gas stations fared far better than the ExxonMobil, BP, Shell and other branded gas stations operated by franchisees.
According to Reuters, a handful of medium-sized regional chains like Hess Corp, Wawa Inc and Sunoco performed far better, with as many as three-quarters of their stations operating, using back-up generators to dispense fuel to motorists, homeowners and utility crews.
It came down to one critical factor: the outlets of the oil majors are franchised, while those of the regional chains are company-run and benefited from the full resources of their corporate parents.
Immediately after Sandy's arrival it quickly became clear that the vast power outages across the Northeast had exposed a largely unseen vulnerability in the fuel supply chain that left as much as three-quarters of the New York City area's 4,000-plus stations unable to dispense fuel from electric pumps.
Gas stations carrying the brands of the three big oil companies make up a third of the market in the New York City area, the data shows. Over the past decade they have been franchised out to individual operators who enjoy little support from the multibillion-dollar majors whose name they bear.
When Sandy hit, they were largely left stranded, with no easy means to hire the big generators needed to power fuel pumps. But at the regional chains, crisis teams swung into action, hiring dozens of units to get gasoline flowing again.
Even if they had generators, many franchise owners would not have been able to run back-up power easily anyway - they are not required by law to install the necessary plug-ins, a fact that came as news to New Jersey Governor Chris Christie.
The breakdown in supplies has prompted calls from NY and NJ lawmakers to introduce rules modeled on hurricane-prone Florida, where key gas stations are required to have access to back-up power within hours of a storm. The suggestion is already meeting with fierce resistance from industry groups, which say purchasing a $30,000 generator would inflict financial hardship on station owners and convenience stores.
One would have to think that if the federal government can spend upwards of $800 billion on 'economic stimulus', it should be able to find a simple way to finance generators for gas retailers and even create an economic incentive to make the purchase more palatable if necessary.