As Hurricane Michael Approaches
Posted October 10, 2018
As officials at the National Hurricane Center monitor the projected path of Michael (below, as of Wednesday afternoon), here are a few things to know about industry’s preparations and the critically important fuel supply chain:
As with all impactful storms, industry’s focus is first and foremost safety and keeping the market well-supplied, including storm-affected areas. The nation’s fuel supply system is large, geographically diverse and adaptable – and has a history of responses that minimize disruptions. Here’s the fuel supply chain that results in the fuels consumers use:
It starts with finding and producing crude oil, which is refined into gasoline, diesel and other fuels. Most refined gasoline is transported by pipeline to fuel terminals, located closer to transportation hubs. Before it goes to retail outlets, fuel must be blended with ethanol and additives. Blending occurs at the terminal, and then the finished gasoline is loaded onto a tanker truck.
Nationally, 97 percent of existing gasoline stations are independently owned. About 50 percent of all stations are branded under a refiner’s brand, and about 60 percent of all gasoline stations are owned by a single store owner. Retail outlet owners decide pump prices at their stores, and historically this has been closely linked to the prices they pay at the terminal that was supplied by the refinery. Again, supply and demand is the key factor at each level of the distribution chain.
Now, a few key points as Michael approaches the Gulf Coast:
- Nationally, crude oil inventories for refining into consumer products have been relatively high.
- Industry and state and federal governments are working together to meet energy needs.
- Energy companies are monitoring storm developments to know where supplies may be needed.
- Gasoline and diesel supplies from surrounding states may be brought in from other states to mitigate supply issues in the affected areas. Fuel terminals are working around the clock to dispense supplies to service stations, even those much further away than those they would regularly supply.
Below, links for official emergency information in states along Michael’s projected path:
For additional information, see API’s hurricane resources and information site.
About The Author
Jessica Lutz is a writer for the American Petroleum Institute. Jessica joined API after 10+ years leading the in-house marketing and communications for non-profits and trade associations. A Michigan native, Jessica graduated from The University of Michigan with degrees in Communications and Political Science. She resides in London, and spends most of her free time trying to keep up with her energetic Giant Schnauzer, Jackson.
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