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Less demand means fewer shortages, more gas

By Johnny Jackson

jjackson@henryherald.com

On Sept. 27, thousands of Georgia football fans were forced to swallow more than their team's 41-30 loss to eighth-ranked Alabama. They had to deal with, and still are dealing with, some of the highest gas prices in the nation.

While national averages have decreased since Aug. 1, the average price for a gallon of regular unleaded gas in Georgia has continued to increase. In Athens on Thursday, the average price of gas was $4.04 per gallon of regular unleaded - a stark contrast to the national average of $3.59 per gallon.

The news is not much different in metro Atlanta, where average gas prices have stayed above the $4 per gallon mark for the past several days, due, in part, to increased demand and a short supply.

For the past two weeks, since Hurricane Ike made landfall on the Texas coast - a center for many of the nations oil refineries - gas stations across metro Atlanta have been running out of gas, which forced consumers to wait in long lines at the few stations with gas.

Panic buying is reportedly the main reason for the gas shortages in metro Atlanta and the major discrepancies in gas prices among Georgia cities and other cities around the country, according to Randy Bly, AAA Auto Club South spokesman.

Sooner than later, however, metro Atlantans should see some relief at the gas pumps.

"I think things are going to be turning around here very quickly in metro Atlanta," Bly said. "I think the greater metro-Atlanta area is not far from lower gas prices."

On Sept. 29, Gov. Sonny Perdue sent a letter to officials in Washington, D.C., requesting that more oil be released from the nation's Strategic Petroleum Reserve (SPR) to refineries in the Gulf Coast region to help stave off further gas shortages in the state.

"These crude releases will help ensure that the Southeast continues to receive consistent fuel supplies as we continue to see more stations receive fuel and lines shorten," Perdue said.

In U.S. Secretary of Energy Samuel Bodman's response to Perdue's request, he noted that emergency oil exchanges have been an important tool to mitigate supply constraints like those in Georgia.

"Following Hurricanes Gustav and Ike, DOE released over four million barrels of SPR oil for this purpose, and stands ready to quickly assist in response to additional refinery requests," said Healy Baumgardner, press secretary for the U.S. Department of Energy (DOE).

To date, the department has delivered 4.8 million barrels of crude oil, most recently scheduled the release of some 900,000 barrels from the SPR for two refiners that have not been able to obtain adequate supplies, due to the ongoing disruptions.

"We appreciate the Governor's concern about fuel supplies in the United States," said Baumgardner, who added that Perdue's request was additional and concurrent to the SPR oil request made by the two refineries.

"The department has worked closely with the EPA (Environmental Protection Agency), the Governor's Office and other Southeastern states to issue fuel waivers in order to provide more fuel market flexibility," she said. "We are using every available tool to minimize the impacts of constrained fuel supplies on American families."

Georgia Insurance and Safety Commissioner John Oxendine, who is campaigning to become Georgia's next governor in 2010, sent out a release on Wednesday calling for Perdue to implement an "Energy Emergency Plan" that would include local, state and national leaders and organizations.

As insurance and safety commissioner, Oxendine plays a role in insuring the proper storage of gasoline throughout the state. "One thing my office has authority over is we don't regulate the supply of gas, we regulate the storage of gas," he said.

He said his concerns were mainly based on future gas shortages. "We need to look long term," he said. "There will be another hurricane in the Gulf. We need to have a clear plan. We need to look at, what is the possibility of getting service from pipelines that don't come from the Gulf Coast, or how can we store more gas? I think we all need to come together, led by our governor, and get those things ... addressed. We don't need to be waiting for another emergency.

"The problem with the Strategic Petroleum Reserve is that that is oil and not gas," he added. "It's helpful, but people shouldn't assume that because the crude oil has been released, that the problem is solved. It helps, but it doesn't help as much as a lot of the public may think it would, because you've still got to refine it."

Refineries in the Gulf Coast are continuing to come back online, according to the Department of Energy, with refineries already producing nearly 60 percent of capacity.

On Wednesday, several petroleum product pipelines - including Colonial, Explorer, Longhorn, and Magellan - resumed operations at levels normal before hurricanes Gustav and Ike made landfall along on the Gulf Coast.