more on the gasoline price mystery
- It was not until tuesday that I saw a newspaper article even acknowledging
the price increase in gasoline I first noticed last friday. Even then the
explanation didn't make complete sense. The main question is, why was the
public kept in the dark for so long about this supposed rupture due to a
defective pipe? I wonder if that's what really cause the rupture. The
following article, attributed to Arizona Republic reporter Max Jarman,
appeared on pages A1 and A2 of the Tuesday, August 12, 2003 edition of the
VALLEY GAS PRICES SOAR AS PIPELINE SHUTS DOWN
40-Cent Increase Seen; Shortages Are Possible
A temporary shutdown of the pipeline that supplies roughly 30 percent of the
Valley's gasoline is causing dramatic price increases and shortages of
premium and midgrade gas at many stations.
Independent dealers are the hardest hit, but many branded stations also are
While premium and midgrade are in the shortest supply, non-leaded regular
could be affected eventually. And the price increases, as much as 40 cents
a gallon since Friday, are across the board and not reserved for the upper-
Rone Dale, who operates an independent station at 48th Street and Southern
Avenue in Phoenix, raised the price of regular to $1.89 a gallon Monday,
primarily to keep from running out.
"I raised the price to slow down demand, but it doesn't seem to be working,"
Dale said. His supplies are low and his distributor told him not to
expect any more product until next week.
"Most suppliers are out of gas right now," said Wayne Rogge, manager of
operations for Union Distribution, a gas wholesaler in Phoenix.
AAA spokesman Dan Cowley said prices were going up sporadically around the
Valley on Monday.
Dan Cummings, a spokesman for ARCO in Los Angeles, confirmed that many of
its 77 Valley stations are experiencing supply problems and most have
recently raised prices. Cummings explained that the company typically
receives its premium and midgrade gas out of the "east line" that extends
from El Paso to Phoenix. The eight-inch line carries about 60,000 barrels of
gasoline, diesel fuel and jet fuel a day. ARCO's regular gas typically comes
from California refineries over the "west line," which is unaffected by the
The Los Angeles line, also owned by Kinder Morgan, supplies about 70 percent
of the Valley's gasoline.
Arizona has no gasoline refineries and all of its supply must be imported
from other states.
The state's dependence on out-of-state gasoline makes it particularly
vulnerable to supply problems and related price spikes. In March, regular
topped $2 a gallon after refinery outages crimped supply.
ARCO and other retailers have asked Governor Janet Napolitano to relax the
Valley's oxygenated fuel requirements to allow gas being stored in Tucson
to be trucked to Phoenix. The gas in storage is not the oxygenated type.
However, it is necessary to clear that fuel from the tanks before other
gasoline, including the Phoenix blend, can be diverted from the pipeline
"Right now the Tucson storage tanks are full and the pipeline is backed up
to El Paso," ARCO's Cummings said.
Napolitano's spokeswoman Kris Mayes said the governor has formed a task force
to address the problem.
"We're working to get the pipeline open as soon as possible, but safety is
our primary concern," she said.
Kinder Morgan Energy Partners closed its Phoenix-to-Tucson pipeline Friday
after an investigation of a July 30 rupture found some of the pipe was
defective. The leak spilled about 10,000 gallons of gasoline into a new-home
subdivision in Tucosn. Patrick Gibbons, a spokesman with the Arizona
Department of Environmental Quality, said a cleanup of the site is under way.
Larry Pierce, a spokesman for Kinder Morgan in Houston, said the company is
working with appropriate regulatory agencies to bring the pipeline back into
service as soon as possible. He could not say when the line could be
Heather Murphy, a spokeswoman for Arizona Corporation Commission, said the
agency is working with the Arizona Department of Environmental Quality and
the federal Office of Pipeline Safety to come up with a plan to address
the safety concerns and get the line back in service. Among other
responsibilities, the Corporation Commission oversees pipeline safety in the
Meanwhile, AAA is urging motorists not to rush out to buy gas.
"The surest way to shortages is panic buying," AAA's Cowley said.