Paying The Price Due To Hurricane Fuel Shortages

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Oil and gas United States Oil Fund LP (ETF) (NYSEARCA:USO)

Shortly after Hurricane Harvey hit Texas and hobbled a fourth of U.S. supply networks that fuel the nation’s cars, trucks, and airplanes began to fail.

The United States has more than 200 million barrels of gas available across the nation, enough to last a few weeks. This fuel was unobtainable being that most of it is not owned or overseen by the U.S government and because of the location of storage was far from the need.

Gas prices increased prior to the arrival of the hurricane and again increased after the storm as the extent of the trouble of Texas refiners became obvious. Prices climbed even higher when Hurricane Irma devastated Florida, leaving Florida residents scrambling for fuel during one of the largest evacuations in history.

These shortages were felt not only across the nation, with an average gas price increase of 10 percent, but internationally as countries dependent on U.S. exports were forced to locate replacement supplies.

Just five days after Harvey pipelines began to close with nothing to pump through key fuel channels in major cities. “It proves to you how vulnerable the country is to the pipelines,” said Dennis Curtis a fuel distributor. “When they go down, it’s a ripple effect all the way to New Jersey.”

According to U.S government data, the largest price increases after both storms was in the southeastern states of Florida, Georgia, South Carolina and. Those four states do not have refineries and very few pipelines.


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The Strategic Petroleum Reserve is a U.S government owned crude oil stock pile. This isn’t very useful for emergencies being that crude oil needs refining. When established in 1975, the government’s biggest concern was disruption of imports of Middle East crude, not fuel shortages due to a storm.

The effects of Hurricane Sandy in New York and the Northeast back in 2012 steered the formation of the country’s only government-owned fuel reserve. Located in Massachusetts, New York, and Maine the reserve holds 1 million barrels, enough for one U.S morning rush hour.

Now, even the small Northeast stockpile may disappear: In May, the Trump administration proposed selling its gas to balance its proposed 2018 budget. Trump’s budget also suggests selling half of the crude in the SPR. The plan has minimal support from Congress, but in the past small amounts from the SPR has been sold to raise money.

The Department of Energy, responsible for coordinating the government response to shortages, did not respond to a request for comment about gas supplies after both of the recent storms.


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