THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, October 22, 1994 TAG: 9410220316
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
LENGTH: Medium: 52 lines
The rupture of the Colonial Pipeline in Houston sent burning pools of fuel into the San Jacinto River and gasoline prices spurting upwards on the East Coast.
The pipeline supplies gasoline to distributors up and down the East Coast, including about half the gas in Hampton Roads.
But this region probably will not feel the pinch as much as others because its gasoline distributors can turn to several alternative sources, said A.C. ``Gus'' Miller, president of Miller Oil Co. Inc.
``That's one nice thing about this area,'' Miller said. ``We get it from the pipeline, but we can also get it from barges or from the Yorktown refinery.''
Besides being a distributor, Miller Oil operates more than 50 Miller Marts in Southeastern Virginia that sell either Amoco, Exxon or Mobil products.
Miller said there also are substantial reserves in tanks all along the Elizabeth River.
As a major port, Hampton Roads imports about 3.8 million tons of petroleum and related products a year, according to the Hampton Roads Maritime Association. A lot of that goes to the Amoco refinery in Yorktown, while the rest finds its way to other distributors and storage fields in the port.
But wholesale prices elsewhere had already started rising 2 to 4 cents per gallon Thursday night. The increase will likely be passed along at the pump very quickly, said Peter Beutel, president of Cameron Hanover Inc., an energy consulting and research firm from Bronxville N.Y.
``I've seen wars and I've seen freezes, but this is one of the bigger acts of God in the market that I can remember,'' Beutel said.
The twin pipeline is one of the major suppliers of gasoline to the Northeast and the nation's largest for refined products, said Bruce Lanni, senior energy analyst with Rauscher Pierce Refsnes Inc. in Dallas.
``There's going to be a real difficulty,'' Lanni said. ``There could be a potential shortage of gasoline to the East Coast. Of course, gasoline prices on the East Coast will most likely rise as a result of this.''
The shutdown also will crimp revenues to companies that supply the pipeline, he said.
The analysts said that it was too early to assess the long-term impact because it was not yet clear how long it would take to repair the damage to the pipeline, or what transport alternatives could be found.
Miller predicted it will only be a temporary interruption. ``They'll get it back up and running in a few days,'' he said. by CNB