[ Fair Use: For Educational / Research Purposes Only ] www.washingtonpost.com/wp...53_000.htm Thursday, Jan. 18, 2001; 8:58 p.m. EST, by Michael Liedtke

California Gasoline Shortages Possible

SAN FRANCISCO ÐÐ The power crisis temporarily shut down California's main gasoline artery for more than 10 hours for the third consecutive day, raising the threat of widespread fuel shortages.

Kinder Morgan Energy, one of many businesses agreeing to go without power in exchange for lower rates, couldn't pipe gasoline from major California refineries to terminals around the state for 12 hours on Thursday.

The California pipeline, which distributes up to 900,000 barrels of gasoline during a normal day, didn't operate for 18 hours Wednesday and 10 hours Tuesday, said Kinder Morgan spokesman Larry Pierce.

The pipeline has been shut down several other times in the last few months, but usually for no more than a few hours at a time.

Pacific Gas and Electric Co. sought a waiver Thursday allowing Houston-based Kinder Morgan out of its service-interruption contract, but PG&E spokesman Ron Low said the state Public Utilities Commission denied the request.

The volatile situation soon could lead to long gas lines and higher prices at the pump, warned Bill Greehey, CEO of Valero Energy, which operates a 125,000-barrel-per-day Benicia refinery that produces about 10 percent of the state's gasoline supply.

"California is getting to the point where they are going to have a crisis that is a helluva lot bigger than the one it already has on its hands," Greehey warned.

Fuel is sitting in refineries instead of making its way to gas pumps because of the pipeline outages.

If the gasoline deliveries continue to back up, industry executives warn they will have to curb production at refineries because they won't have anywhere to store the fuel.

"If this continues like it has the last few days, this is definitely going to become a huge issue," said Pierce of Kinder Morgan.

A gas station in El Centro reported Thursday that it already is on the brink of running out of gasoline if it doesn't get a delivery in the next day or so, said Jay McKeeman, executive vice president for the California Independent Oil Marketers Association, a trade group.

"It's going to be a big problem if it goes on much further and it could take months to iron out," McKeeman said. He wrote a letter to Gov. Gray Davis and state regulators urging them to ensure that Kinder Morgan's power isn't interrupted.

San Antonio-based Valero, which bought its Benicia refinery last year from Exxon Mobil, notified Attorney General Bill Lockyer of the looming gasoline crisis Thursday, Greehey said.

Lockyer's office did not return calls Thursday afternoon about the situation.

-- Swissrose (cellier@azstarnet.com), January 18, 2001

Answers

The joker in the deck is quite an overused analogy, but, in this case, it really seems to apply.

-- Uncle Fred (dogboy45@bigfoot.com), January 19, 2001.