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The Post-Harvey Gas Panic

Railroad Commissioner Ryan Sitton assures the public: ”There’s plenty of gasoline.”

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A long line of cars wait for gas at a Conoco in Wimberley, Texas.
Loren Steffy

Outside the Kiwk Chek, one of a half dozen gas stations in Wimberley, an attendant was directing traffic that had backed up onto Ranch Road 12, waiting to get into the parking lot. People seemed to be driving up and down the main drag, looking for the shortest lines at the pumps.

But there were lines four or five cars deep at the Conoco, at the HEB, at the Shamrock better known for its breakfast tacos than its fuel and even at the Valero down by “the junction,” where Ranch Road 12 meets FM 32.

The Kiwk Chek ran out of regular unleaded just after 4 p.m. on Thursday and it was running low on premium. The cashier said she didn’t know when more would arrive. The post-Harvey gas panic was washing over the Hill Country just as Harvey’s outer bands did last weekend.

The hurricane shuttered refineries from Corpus Christi to Port Arthur, knocking about one quarter of the country’s refining capacity. Prices began inching up before the storm had even receded, and while some station owners in Dallas jacked prices up to $3 a gallon by Thursday, in Central Texas, prices were still hovering around $2.20 a gallon.

Stations in Dallas began running out of gasoline early in the day, and as word spread that there was a “gas shortage,” the lines in some areas began to grow.

By mid-afternoon, Railroad Commissioner Ryan Sitton tried to calm consumers. “There’s plenty of gasoline,” he told Dallas’s WFAA-TV. “This will subside.”

The problem, Sitton said, is that in the rush to fill up, consumers are taxing the regular supply cycles for service stations. The more stations close, the more people panic and look for a place to fill up, which exacerbates the problem.

“Remember the old stories of runs on the bank?” Sitton said. “If everyone goes to the bank at the same time and tries to get their money, then it causes a panic and the bank doesn’t have enough cash in the drawer to give everyone their money . . . The bank has your money, it’s just not sitting at that one [branch].”

The difference, of course, that people making a run on the bank are trying to withdraw their own money. They know how much is in there, and they want to get it before the bank shuts down. Motorists, on the other hand, have no idea how much gasoline is actually available. In the Hill Country, where many people live miles from town or even beyond the reach of landlines, they worry about getting stranded.

But, as Sitton noted, gasoline stocks were bloated heading into the storm—about 230 million barrels, or about 9.7 billion gallons. About six million barrels, or 252 million gallons, are refined in Texas, and about half of that is offline.

“So, if that three million barrels of refined capacity stayed offline for an entire month that would be 90 million barrels that wouldn’t be produced, Sitton said. “That would be less than half of what we have in inventory.”

And it’s unlikely all that capacity will be offline for a month. All four Corpus refineries—two owned by Valero, one by Koch Industries’ Flint Hills division, and one by Citgo—are resuming operations.

In Houston, of course, it’s a different story. Many gas stations remained flooded. In League City, the police department urged residents to drive as little as possible. “Stations are unsure when supplies will be available,” the department said.

What’s needed in this situation is patience. Yes, gasoline prices are likely to go up—perhaps as much as 50 cents a gallon in some parts of the state. But any disruptions will be temporary—probably not more than a week or two.

And while Harvey is driving up gasoline prices, crude oil is falling. That means many refiners who haven’t shut down may produce more gasoline after Labor Day to take advantage of the bargain, and if so, pump prices could fall almost as quickly as they rose.

But that may not calm the fears of antsy motorists. Less than 20 minutes after the depletion of gasoline emptied the Kwik Chek parking lot in Wimberley, a tanker arrived, like some shining silver stallion riding to the town’s rescue. It seemed as if motorists could smell the rolling tank of untapped gasoline. A little after 4:30 p.m., traffic was backed up on Ranch Road 12 again, and two attendants were out front directing traffic.

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