Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, October 22, 1994 TAG: 9410240039
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
And although the ruptured pipe had an almost immediate impact on prices, according to a Roanoke wholesaler, the effect is expected to disappear as soon as the incident drops out of the news.
Floodwaters apparently caused the 40-inch-wide pipe, owned by Colonial Pipeline Co., to break on Thursday. Burning fuel covered the flooded San Jacinto River after the break, setting homes and boats on fire.
The Colonial Pipeline is one of two distribution systems bringing fuel to the Roanoke area. A spur from the Colonial Pipeline feeds tank farms at Montvale in Bedford County. Another company, the Plantation Pipeline, serves terminals operated by Amoco, Shell and Exxon in the Starkey area of Roanoke County.
Colonial Pipeline's break in Texas had an almost immediate effect on the price paid Roanoke-area distributors for fuel, according to Terry Phelps, president of Petroleum Marketing Inc. of Roanoke. PMI sells fuel at 57 company-owned Stop-In stores in Virginia and supplies gasoline to another 100 independent dealers. The company also operates seven home-heating fuel terminals.
About 3 p.m. Thursday, some of his 19 fuel suppliers raised prices as much as a nickel per gallon, Phelps said. Prices increased later to 6.8 cents a gallon above Thursday morning's price. Phelps said Friday he was expecting more increases.
To help offset the impact of the price increases, Phelps said, his company had bought as much fuel as it could and put it in bulk storage. It was not possible immediately to pass the price increase along to the company's customers because of competitive pressures, he said.
Phelps said he expected the price to increase for the next two or three weeks, when he hoped it would return to normal levels. Consumers probably will see some price increase at the pump, he said.
Maintaining a flow of fuel should not be a problem, said Ted Barnett, Colonial 's technical services leader in Atlanta. The pipeline, which runs from Houston to New Jersey, has several other points where fuel is injected, including Beaumont and Port Arthur, Texas; Lake Charles, Crotz Springs and Baton Rouge, La.; and Collins, Miss. The pipeline should be able to serve all its customers needs from those points, he said.
Colonial Pipeline consists of two pipelines, a 40-inch pipe that carries gasoline and a 36-inch pipe that carries fuel oil and jet fuel. While the pipelines' capacity is a combined 2million barrels per day, they generally carry less,1.5million to 1.8million barrels, Barnett said. A barrel equals 42 gallons.
The break in both pipes near Houston cut off 900,000 barrels, but the slack can be picked up at other origination points, and Houston-area refiners can barge their product to other Texas locations to put it in the pipeline, Barnett said.
Barnett also discounted any need for a price increase because of the pipeline break. "I think it's just speculation," he said.
by CNB