Finally some good hard hitting Y2K info from a reputable source. This snippet is from OPIS who is a widely respected oil rag. Most of the industry probably reads this one daily in the US R&M sector. I'm glad to see someone step out and say what has been in the works for some time now. Let's hear three cheers for Williams for having the balls to say this stuff. They are concerned that the 300 or so utilities they depend on may have problems. They are concerned that their may be product shortages due to a panic. And they're actively pursuing efforts to mitigate problems which might occur. I have to say, better late than never.

PS-may I also take this opportunity to forum readers to say that crude has been flying here of late. Passing all market highs like they were checkered flags at Indianapolis Raceway. Look for this to continue. If the Iraq thing plays like I think it will, then he will cancel oil for food following the opec meeting on the 20th. Crude will fly like an eagle. Keep prepping, you need to keep prepping. I'm still firmly in the 7-8 magnitude camp for crude and refining. Most of the executives in the industry are probably only at a 3-4 as most of the flotsam below them has kept them woefully in the dark due to the severe social phobia and stigma associated with anyone not blustering with bravado. They will begin to wake up here shortly and realize they've been dorked once again by the IT guys. To bad for them, and to bad for you. Keep prepping.

For educational and research purposes only:

Pipeline and terminal company Williams is looking at creating regional supply centers in sensitive markets just in case there's a year-end melt- down. While Williams has completed its own Y2K testing and is relatively sure that it will have no problems of its own making, the Tulsa-based company is not so confident when it comes to some of its business partners, including the 300 or so utilities upon whom it relies. "We're still forming a final contingency plan, but we're looking at setting up central locations in the system where we know there's a potential for problems," Shawn Barker, Williams marketing manager told a SIGMA meeting in New Orleans last week. For example, if the Topeka terminal can't operate, a regional supply center will be established at Kansas City with employees available to manually operate terminals, fill out bills of lading and to ensure that equipment is working. Other areas being looked at for supply centers include Tulsa, Minneapolis and Des Moines. Williams is also trying to decide whether to follow the lead of Colonial and Kinder Morgan pipelines and close down altogether from 8 p.m on Dec. 31 to 6 a.m on Jan. 1. "We're looking at the value of that, but we don't want product contaminated or some kind of spill because an alarm didn't go off," he says. Williams met with shippers on the Y2K issue about a month and a half ago. Various consultants have predicted that consumers and gasoline dealers will fill their tanks and "if that happens, there's no way that refiners will meet demand," he says. One shipper in Houston is even talking about shutting down operations on Dec. 30 and not reopening until Jan.3, he says. "We may be chasing a horse we can't catch if we're loading it in and they're taking it out just as fast at the other end," he says. Williams has spent $60 million-$75 million to test its system, using a 236-strong employee task force, and has replaced software and hardware where it might have encountered problems in its 23 million barrel storage system. Meanwhile, Williams is concerned about moves by Kansas City to switch fuel grades. "There's only so much storage in the system and Kansas City wanting to go to RFG is not the best news for us. It's hard to keep terminals wet when there are too many different grades of fuel." There is a high demand for conventional fuel from marketers in outlying areas around Kansas City and Williams is using every barrel of available storage already. If RFG becomes mandatory, Williams will "have to decide which grade to reduce, and that's when you get outages," says Barker. "It's a big issue for us to handle and we're working on the plans now."

-- Gordon (g_gecko_69@hotmail.com), November 11, 1999

Answers

TNX Gordon, for another great post. You should be getting paid. Please keep it up. TNX again

-- Earl (earl.shuholm@worldnet.att.net), November 11, 1999.

Good job, Gordo!

Be sure and take note, all, of the Syracuse pipeline story about 10 threads below this indicating their 3 area refined products pipelines will also take a little rollover breather.

Here's my question: Are this pipelines predominately worried about the integrity of their power supply or are they worried about their own state of compliance? If its the latter, we must assume that most refineries will also take a precautionary shutdown since they are vastly more complex. Couple this with year end hoarding and we aint seen nothing yet on crude oil and refined products economics and shortages even without Gordon's Iraqi wild card contention.

The API's had spin control in high gear with another witless article in this week's Oil & Gas Journal on how everything is gonna rollover real smooth and any concerns about oil industry Y2K problems "...have no basis in fact." These pipelines seem to be getting the green light on making public statements on rollover shutdowns. We won't see any such announcements on refineries or offshore platforms but if anyone hears anything I'd appreciate a post.

Got length (oil market)?

-- Downstreamer (downstream@bigfoot.com), November 11, 1999.

Could you post the citation for this news report, e.g. date, issue, page? I'd like to run it past a reporter, this info would help them verify it.

-- robert waldrop (rmwj@soonernet.com), November 11, 1999.

Gordon, do you have a link to the magazine's web page?

I'd REALLY like my DWGI spouse to read this...

-- mommacarestx (nospam@thanks.net), November 12, 1999.

Gordon......... In Your opinion how will this effect power generating facilities that depend on petroleum products? They can surely stockpile an amount to carry them through temporary delays in shipment. Bringing the product back for use won't be a simple throw of a switch. I am sensing " lights out for some ".

-- kevin (innxxs@yahoo.com), November 12, 1999.

Thanks Gordon! Your contributions are greatly appreciated. RC and Dog Gone - if you are reading this: Have you heard anything new from the Mideast?? TIA!

-- jeanne (jeanne@hurry.now), November 12, 1999.

Internationally, other trade articles have said that inventories are much lower (and thus prices higher for crude) than usual - even accounting for the beginnig of winter up north, inventories are much lower than usual.

Could be a symptom of industrial users storing more oil earlier than usual.

The piping trade magazines have had a very few articles on y2k-issues - nothing outstanding or usual, no information in them that regular readers of this fora would not already know. No appraent deep-seated concern, nor apparent concerns about the "crossing"pipelines between states and regions: what happens if phones are out in LA or east TX but power is okay, and electricity is out in AL and South GA, but phones and the satellite links are okay?

The interdependency of SCADA and monitoring systems on the local utilities has not been addressed - as far as I've read.

Thanks for the info.

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), November 12, 1999.