Gulf Coast C-Stores, Refineries Brace For Ike

Convenience stores in the path of Hurricane Ike are bracing for supply disruptions, with many retailers in Gulf Coast states and the eastern coast limiting gas sales for each customer, various news agencies reported.

The U.S. Department of Energy said Hurricane Ike could affect fuel supply as refineries in the Gulf of Mexico shut down in the wake of the storm, Reuters reported.

"We expect this will likely have fuel impacts. There is likely to be constraint in supply," Kevin Kolevar, assistant secretary for electricity delivery and energy reliability, told reporters. He added that any gasoline supply problems would be limited to the Gulf Coast and the Eastern Seaboard.

According to The Houston Chronicle, Hurricane Ike’s pending assault of the Texas Gulf Coast spurred shutdowns at various refineries on Thursday, stoking concerns that lost output will strain U.S. fuel supplies and send pump prices higher.

The closures included Exxon Mobil Corp.’s Baytown refinery and BP’s Texas City plant, two of the nation’s largest fuel-making facilities.

Additionally, Valero said it has shut its Port Arthur refinery, while the shutdown process is concluding at its Texas City refinery and Houston refinery. The company’s other Gulf Coast refineries are operating at planned rates.

So far, the total of company-operated retail sites that have been closed along the Gulf Coast due to evacuation orders has grown to about three dozen.

The Houston Chronicle reported that Ike has raised fears of a repeat of Hurricane Gustav, which last week plowed through a key refining corridor in south Louisiana.

One analyst estimated that Ike’s current track could lead to short- or long-term disruptions at plants representing roughly 40% of U.S. refining capacity, the Chronicle reported. The predictions, coupled with already weakened fuel stockpiles after Gustav-related refinery outages, have helped bump up wholesale gas prices in recent days. On Thursday, fuel station operators found the spot price for gas had risen nearly $1.50 a gallon overnight.

"We didn’t see that big a rise in Katrina," Douglas Haugh, executive vice president of Gainesville, Ga.-based Mansfield Oil Co., told the Houston Chronicle. During a major storm, gas stations will be unable to raise pump prices enough to cover increased fuel costs, fearing allegations of price gouging, he said.

Other refineries that suspended operations or shut down: LyondellBasell’s Houston plant, Shell’s Deer Park complex, ConocoPhillips’ Sweeny facility and Marathon Oil Corp.’s Texas City refinery. Other plants in the region were running at reduced rates, while some chemical plants in the same areas were halting production.

Fuel supplies were already weakened after Hurricane Gustav knocked out about 15% of the nation’s refining capacity for several days.

Steve Spinks, president of South Carolina c-store chain Spinx, told The Greenville News that there will probably be a disruption in the gas supply in their area because of hurricanes, but motorists shouldn’t run out and fill their tanks. "I think the overriding thing is to encourage people not to freak out," he said. "Keep calm."

Spinks said the area’s gas supply is being impacted by the shutdown of oil company facilities in the Gulf of Mexico and near Houston because of Hurricane Gustav and now Hurricane Ike. He said the problem has been building for about the last week.

WTOC News in Georgia, meanwhile, reported that The Pantry gas stations all over the country have posted signs on pumps asking customers to limit their purchases to 10 gallons of fuel at a time due to a limited fuel supply.

Representatives at The Pantry said the move was in response to oil refineries shutting down for the hurricane. They said the supply is fine today, but they’re concerned about the weekend and want to make sure the supply doesn’t run out.

Pantry representatives told the news station that the signs have been posted at all locations in 11 states including South Carolina, Georgia and Florida.

The Citizen-Times in Asheville, N.C., reported that some local gas stations ran out of various grades of fuel Tuesday and Wednesday, including several of Ingles Markets’ 52 Gas Express locations.

“Until things are back to normal, there may be outages that affect some locations and some grades of gasoline,” Ingles Chief Financial Officer Ron Freeman told the newspaper on Wednesday. “We purchase gasoline daily from a number of sources, so it’s impossible to predict exactly which locations and products might be affected.”

Weather forecasters predicted Ike would make landfall by Friday night or Saturday. CNN reported that the Minerals Management Service said 562, or more than 78%, of the 717 manned production platforms in the Gulf had been evacuated, along with 93 of the 121 rigs.

The real-time figure is likely higher, according to CNN, since all companies in the Gulf reported on Thursday that evacuations were either underway or completed.

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