Behind the Run on Gas After Sandy

BY LAURIE CHERENFANT

It’s been two and a half months since Hurricane Sandy visited the East Coast.  After the storm, many people struggled to put their lives back together as things slowly headed toward normalcy.  One of the major industries impacted during Sandy were gas stations.

Some Brooklyn gas stations were up and running the day after the storm hit as the city that never sleeps was wide awake scrambling for gas.  Gas stations suffered from no business, slow business and increased business all in a small window of time.

Although all gas stations suffered from the increased demands of gas, it is the small independent gas stations that seemed to suffer the most.

Cal Crichton, the owner of Cal & Co. Autos Inc. gas station has serviced the East Flatbush area of Brooklyn for 41 years.  He like many other gas stations did not think that Sandy was going to be as bad as it was.

“New York generally doesn’t have bad news, that’s why we didn’t prepare [for Sandy],” Crichton said.

The day after the storm hit, cars were lined up waiting to fill up their tanks.

“There were three different lines waiting to get gas,” Crichton said.  “I was empty after six hours.”

This was not an uncommon story.  Gasoline that was supposed to last anywhere from a week to two weeks was sold within eight to nine hours.  A gas attendant, who asked not to be identified, working at BP complained about this phenomenon.

“Gas finish in eight hours and then no coming gas [sic],” he said.  “Ten days without gas—no business.”

John Casazza, a representative of the New York State Association of Service Stations and Repair Shops said that the states are responsible for oil distribution.  “The states weren’t ready,” he said.  “They should have done more—they should have put generators in central places.”

The gas rationing imposed by Mayor Michael Bloomberg didn’t help many people waiting to fill up their tanks at a gas station because there was no gas.

Crichton sold all of his gas in one day—gas that would have normally lasted him one full week.  He wasn’t replenished until two weeks after selling out, meaning he lost one week’s worth of revenue.

The rationing of Sandy was implemented because “the New York Harbor was shut down, roads were dark and dangerous, Colonial Pipeline was shutdown, there was too much flooding and there was a lot of rubbage,” Jeff  Lenard, the Vice-President of Industry Advocacy for the National Association for Convenience and Fuel Retailing, said.  “We had to take safety precautions [when trying to distribute gas].”

Independent gas stations are in competition with the larger gas chains when it comes to replenishing their gas.  Gas stations rely on distributor companies which deliver fuel from storage terminals receiving oil from tankers and pipelines.  During the storm, these terminals were hurt and were without power preventing them to operate at full capacity.  The terminals that were able to supply the tri state area prioritized who should receive oil first.  Terminals then serviced emergency units such as firefighters, police departments and hospitals first because there was only a limited supply for the public.

“Very few gas stations are owned by an oil company,” Lenard said.  “If you sign a contract for 20 years, you have a guarantee of supplies.  If there isn’t enough gas, larger chains get supplied first and [independent stations] are the last to get.”

“Priority is determined more by contracts than by ownership,” Steve Baker, a spokesman from Colonial Pipeline, a supplier of gasoline and diesel for the East Coast, said.

Independent stations are primarily low volume stations due to the few cents extra people have to pay when they pump there.  When a storm such as Sandy lands, the first few days are one of the best due to the higher volume of customers, Crichton explained.  Typically a small gas station will order 2,000 to 4,000 gallons of gasoline about once a week depending on how much they can afford to buy.  Because they tend to not have contracts with third party distributors, they are on a “cash on delivery basis” meaning they need to have money upfront.

“The money wasn’t the problem,” Crichton, the owner of Cal and Co. said.  “We couldn’t get any more gas to replace what was lost.”

“There is a cost-benefit decision that governments and businesses have to make in their interest to serve the public,” Baker said.  “Greater investment in infrastructure would harden our systems and better protect against outages.”

“We are completing several expansion projects which will increase the amount of fuel the Colonial Pipeline delivers to the New Jersey-New York area,” Baker said.

About three weeks after the storm, business started to normalize and an increase of damaged cars started to flow into the auto shops.

“It didn’t matter that there were more cars, we couldn’t help them,” Crichton said.

“For right now, we can only take it in stride,” he said.  “Business will slowly improve, and things will get back to normal and we will get back to work.”