Western Railroad Discussion > Gasoline to Phoenix

If this has been addressed I haven't found it, so I apologize if I'm duplicating....

Are UP and/or BNSF involved in alleviating the gas crunch in Phoenix? Seems to me a golden opportunity, for $$$$$ as well as PR. But all I hear about on the news are trucks.

lowwater

From my experience in the petroleum industry, its hard to marshall a fleet of tank cars suitable fora meaningful volume of product on the spur of the moment..they're out there but usually committed to some other shipper on a round robin basis. Trucks are much more available and I had to use a bunch to move quantity around pipeline failure between L.A.-Phx. like this. Of course competition drives rates up quickly.

> From my experience in the petroleum industry, its
> hard to marshall a fleet of tank cars suitable
> fora meaningful volume of product on the spur of
> the moment..

The pipeline ruptured July 30, three weeks ago. Hardly spur-of-the-moment.

On the other hand, since the typical oil industry profiteering is occurring up and down the west coast ($2.05 for regular in Reno), as if there was an actual shortage of gasoline (there isn't--there's a shortage of transportation to Phoenix and Las Vegas, there's plenty of gas), profits wouldn't be maximized if fuel deliveries were to actually occur. Notice how the *repaired* pipeline failed testing today...

—Dan

> The pipeline ruptured July 30, three weeks ago.
> Hardly spur-of-the-moment.

You have obviously never attempted to schedule a large fleet of trucks....There aren't fleets of trucks just hanging around waiting for something to carry.

> On the other hand, since the typical oil
> industry profiteering is occurring up and down the
> west coast ($2.05 for regular in Reno), as if
> there was an actual shortage of gasoline (there
> isn't--there's a shortage of transportation to
> Phoenix and Las Vegas, there's plenty of gas),
> profits wouldn't be maximized if fuel deliveries
> were to actually occur. Notice how the *repaired*
> pipeline failed testing today...
>
> —Dan
>

So you think that the loss of millions of dollars by the pipeline operator is somehow recovered by someone else's jacking up prices that some panicy drivers are more than willing to pay for some gas they probably don't really need? Most of the additional cost goes to the transportation of the fuel by truck. There is a REASON pipelines are used: they cost less than trucks or trains. So if you now have to truck it in, guess who gets to pay for the trucks? The price of gas is mostly determined by the price that people are willing to pay.

You conspiracy fans amaze me......

Just because I'm paranoid doesn't mean "They" aren't out to get me.

Gonut

kenw wrote --

>So you think that the loss of millions of dollars by the pipeline >operator is somehow recovered by someone else's jacking up prices >that some panicy drivers are more than willing to pay for some gas >they probably don't really need? Most of the additional cost goes >to the transportation of the fuel by truck. There is a REASON >pipelines are used: they cost less than trucks or trains. So if you >now have to truck it in, guess who gets to pay for the trucks? The >price of gas is mostly determined by the price that people are >willing to pay.


Right now the average price of gas in Phoenix for regular is about $2.39-$2.50 a gallon. Before the rupture the price was, on average, about $1.49-$1.69 a gallon. Fuel distributors claim that trucking gas from Tucson adds about 0.10 to 15 cents a gallon. So the boost in price is not completely from the cost of transportation. So your second point is mainly right -- it's what the market will pay. And in a city beholden to the automobile, you bet they'll pay it.

The panic didn't hit until Sunday, when only about 1/3 to a 1/4 of stations had gas. Word got around, and people hit the pump hard. If you only had about 1/4 of a tank, and you had to go to work on Monday, in a city practically bereft of public transportation, you would panic too.

By the way -- Kinder and Morgan, owners of the pipeline, are former Enron executives. Enron -- Conspiracy, nawww! ;>)

Hmm, Is this pipeline failure the reason that I had to pay $1.99 a gallon today to fill up my car? -- IN CINCINNATI!!!!!!!

Good grief.

I've said it before and I'll say it again 'It's all a scam'.