One year after Superstorm Sandy washed through the Northeast, New York officials are working on a plan they hope will minimize the risk of repeating the fuel shortages that followed.
New York's $10 million Strategic Gasoline Reserve is designed as a pilot program for a larger effort to meet fuel supply issues during natural disasters and other supply disruptions.
Such a plan could help with some fuel disruptions, but it might not be helpful in the event of another Sandy-like storm, said Gregg Laskoski, an analyst at GasBuddy.com.
“In theory, it sounds terrific,” he said. “The problem is that the fuel still has to be distributed. If we're talking about terminals where suppliers can access gasoline, that in theory makes a lot of sense. But it can be problematic as well because that fuel still has to be transported.”
While there were fuel shortages following the storm, the bigger problem in many areas was that widespread power outages left stations unable to pump gasoline from their tanks.
A gasoline reserve might be more helpful with the much more common regional and localized disruptions that often cause price spikes throughout the country.
Oklahoma usually has one of the five lowest statewide price averages. But in late April and nearly May, our price surged almost 70 cents a gallon in three weeks because of fires at large refineries in the Chicago area.
The refinery outages almost immediately led to much higher prices throughout the Great Lakes region.
Prices in Oklahoma soon followed as gasoline and diesel were moved from our area to make up for shortages further north.
Such outages and localized price spikes are common.
Part of the problem is that the country is still largely divided into five World War II-era Petroleum Administration for Defense Districts, or PADDs.
The districts were designed to organize and track the nation's petroleum use and availability.
While there are pipelines that connect the districts, oil and refined products flow most freely within the various PADDs. Plans have been proposed to reduce price spikes by increasing links between the PADDs.
Perhaps a series of mini gasoline reserves could help. Such a reserve, however, likely would lead to other issues, such as who should control the fuel and when and how should it be tapped or filled.