Observations on local governments’ preparedness for fuel supply disruptions
Guest Post By Kathy Leotta, Brian Lagerberg, and Keith Cotton, Commute Trip Reduction Program, Washington State Department of Transportation
Fuel supply disruptions can wreak havoc on our transportation systems and overall economies. For example, the energy crises of 1973 and 1979 posed what one economics professor called a “state of disaster on world economies”. Gas lines formed, food prices increased, and the economy fell into recession. The traveling public became angry at the chaos that ensued. For those of us who help to manage and operate our transportation systems, a fuel supply disruption would represent a major crisis.
In the wake of the oil supply shocks of the 1970s, the U.S. Department of Transportation (U.S. DOT) encouraged the development of regional transportation energy contingency plans. The U.S. DOT also conducted a number of workshops around the country to help regions and states develop these plans. But by the early 1980s, regional and local governments stopped developing transportation energy contingency plans as the threat of fuel supply disruptions diminished, as funding and support for the development of these plans discontinued, and as other more pressing issues emerged. Contingency planning at the state level has continued.
Nearly 30 years later, there are warnings that we are again at risk for potential fuel shortages:
-The International Energy Agency (IEA) indicates that huge investments in oil production will be needed mainly to combat declines at existing fields — the equivalent of six times the gross capacity of Saudi Arabia will need to be brought on stream between 2007 and 2030.
-The IEA also indicates that energy investment has been falling with the economic downturn, and any prolonged downturn in energy investment may result in a shortfall in oil supply.
-The IEA further indicates that conventional oil production in non-OPEC counties will peak around 2010, so any future increases in oil production would need to come from OPEC countries (which control over 70 percent of global crude oil reserves).
-The U.S. Military warns that to meet climbing global oil requirements, OPEC will have to increase its output from 30 million barrels a day (MBD) to at least 50 MBD. “Significantly, no OPEC nation, except perhaps Saudi Arabia, is investing sufficient sums in new technologies and recovery methods to achieve such growth. Some, like Venezuela and Russia, are actually exhausting their fields to cash in on the bonanza created by rapidly rising oil prices.”
-This same report by the military further warns that as early as 2015, the shortfall in oil output could reach nearly 10 MBD.
-Before the OPEC oil embargo in 1973, the U.S. assumed that OPEC countries would not curtail oil production because they couldn’t afford a loss of revenue, but this proved not to be the case. Instead, the increased price per barrel of oil during the crisis more than compensated for losses from reduced production.
This essay summarizes how a few experts on commute trip reduction programs view local and regional preparedness for fuel supply disruptions. These views have been informed by the interviews the lead author conducted with local transportation providers and state energy office planners in 2006 as part of the research conducted for the January 2007 report listed below, as well as continuing discussions the authors have had on this topic with those involved in transportation and energy planning at the state and local levels. In addition to the interviews and on-going discussions, following are just a few of the reports that have contributed to our perspectives on our preparedness for oil and fuel supply disruptions:
-Transportation Research Board, TRB Special Report 191 –Considerations in Transportation Energy Contingency Planning (April, 1980)
-U.S. General Accounting Office, Comptroller General’s Report to Congress: Transportation Contingency Plans for Future Gas Shortages Will Not Meet Commuter Needs(July, 1981).
-Imperial College of Science, Technology, and Medicine, and University of Newcastle, How Much Disruption to Activities Could Fuel Shortages Cause? – The British Fuel Crisis of September 2000 (2003)
-Public Safety and Emergency Preparedness Canada (PSEPC), Impact of September 2000 Fuel Price Protests on UK Critical Infrastructure, (January, 2005)
-IEA, Saving Oil in a Hurry (April, 2005)
-Parsons Brinckerhoff, Implementing the Most Effective Transportation Demand Management (TDM) Strategies to Quickly Reduce Fuel Consumption(January, 2007).
-National Association of State Energy Officials, State Energy Assurance Guidelines (December, 2009)
Why Care About Fuel Shortages?
Fuel shortages can range from very minor to very severe. A very minor shortage may result in brief shortages at a few gas stations, with minimal impacts. However, a very severe fuel shortage can result in major impacts very quickly. The fuel blockade in the United Kingdom in the year 2000 offers an example how quickly a very severe fuel shortage can wreak havoc on the transportation system and the economy.
A chronology of the events is as follows:
“Protests were triggered on September 5, 2000 when it was announced that fuel prices were to rise again following a rise in the price of crude oil. The Channel Tunnel was blockaded in protest on September 6. On September 7, the first oil refinery … was blockaded. Protests spread rapidly with more refineries blockaded on September 8 resulting in nation-wide panic buying of fuel on September 9. On Sunday, September 10, the protests had closed Britain's largest oil terminal … and huge queues at gas stations were reported. By Tuesday, September 12, protesters had blocked six of the UK's eight refineries. Over half of Britain's gas stations were shut. The protest ended almost as quickly as it had begun. On September 14, the Stanlow blockage ended and on September 15 the first fuel deliveries were reaching some gas stations, although it was estimated that 90 percent of gas stations were empty of fuel.”
The media closely followed this nine day crisis, and summarized some of the impacts in a September 15, 2000 article in the Guardian Unlimited titled “Rationing keeps NHS afloat.” The article describes piecemeal local fuel rationing schemes, panic buying of food that led to shortages at grocery stores, efforts to provide fuel to doctors and nurses so they could get to work, and potential shortages of animal feed for pigs and poultry.
The transportation sector, including public transportation, was deeply impacted.
“Reports suggest that 29 percent of private motorists were forced to stop driving because they did not have gasoline. In turn, public transportation systems were strained by fuel shortages and an increase in the number of passengers. The London Underground experienced overcrowding as the number of users increased up to five percent on the three-million daily norm. Some train services in London were cancelled after fuel depots ran dry. Several London bus companies were forced to substantially cut their services because of the lack of fuel and because drivers could not get to work. Even when fuel deliveries started on September 14, bus companies across the country restricted their passenger services to conserve dwindling fuel stocks and warned that these measures could stay in place for several days.”
The financial impact of the week-long fuel supply disruption was estimated to be at least £1 billion (about $1.43 billion).
Obviously the 2000 U.K. example is an extreme one, but it does illustrate how quickly fuel shortages can become a problem today, with our widespread reliance on just-in-time delivery for fuel, food and many other products. More preparation for fuel shortages could help to more quickly conserve fuel during a shortage situation, and potentially better prepare the government to minimize panic buying of fuel and food. Perhaps most importantly, advanced planning could identify how the transit dependent, low-income, or other vulnerable populations in the local area may need special attention and service during a fuel supply disruption.
State Energy Contingency Planning
Today, transportation energy contingency planning occurs primarily at the state level. State energy offices each have a relatively small staff that handles all energy issues for an entire state, including administering energy grants, developing energy policy, and energy contingency planning. State energy offices monitor fuel supplies and maintain relatively close contact with fuel suppliers. They can establish levels of energy emergencies in the state, identify a set of priority fuel users, and work with fuel suppliers to secure fuel for priority users in emergencies.
State energy offices also identify potential strategies to reduce the demand for oil during an oil or fuel supply disruption, but at a fairly high level and without details on how these would actually be implemented. Many of the strategies that would be implemented would be administered at local and regional levels, and some would require time and coordination to effectively implement.
However, contingency planning at the statewide level only may not be enough. For example, following Hurricane Katrina fuel deliveries to much of the southeastern United States were disrupted due to the closure of two major refined product pipelines. North Carolina has a state energy emergency plan and the state implemented a number of strategies, but local government agencies didn’t have energy contingency plans. A few of the lessons learned from the fuel shortages in North Carolina include the following:
- Many cities and counties needed to have a better understanding of how much fuel their services required per day,
- Most state and local agencies were relying on just-in-time delivery of fuel. One transit agency that typically buys fuel from the local department of transportation (DOT) fuel depot indicated that during any kind of crisis the DOT immediately cuts down on the purchase of fuel by other agencies.
- Some buses quickly became overcrowded, and some transit agencies were running low on fuel.
- Some local transportation system operators indicated that to at least some degree felt they were on their own in dealing with their fuel shortage concerns.
What Would a Regional/Local Energy Contingency Plan Look Like?
Although regional and local governments generally no longer develop transportation energy contingency plans, these plans could include some of the following:
- Input in development of the plan from an advisory task force, which would include representatives from state and local governments, industry including those in food distribution, employers, social services agencies to represent low-income or other “at risk” populations, non-profit groups, neighborhood associations, etc.,
- Clear lines of responsibility for those who plan and implement strategies (who would lead, who would support, etc.),
- Identification of which approaches would be the most feasible to implement quickly, and which might result in “dead ends” so agencies can concentrate, early on, on the most promising strategies,
- Plans for how staffing at ridesharing organizations (carpooling and vanpooling programs), social services, and other programs would quickly be ramped up,
- Identification of local emergency service fuel requirements, as well as transit dependent, low-income, or other vulnerable populations in the local area that would need special attention and service during a fuel supply disruption,
- Potential options for mitigating economic hardships,
- Preliminary plans to address overcrowded buses and park-and-ride lots,
- Agreements with alternative vehicle fleet providers for spare vans or buses that could be used in emergencies,
- Agreements with transit unions about the use of emergency bus drivers and a reserve fleet in an emergency,
- Resolution of any legal barriers to using non-traditional public transportation services in an emergency,
- Identification of potential funding sources for the implementation of various strategies,
- Testing of the capability of online information systems (such as for ridesharing resources, transit services, etc.) to accommodate a rapid increase in activity,
- Testing of rapid increases in teleworking at a sample of worksites in order to have information to share with employers about actions that can be taken in advance to improve emergency preparedness.
“Top 7” List of Observations on Local Governments’ Preparedness for Fuel Supply Disruptions
Following is a list, in no particular order, of observations on our readiness to respond to oil and fuel supply disruptions.
1. Planning and preparation for potential fuel shortages from state energy offices remains important, but the effectiveness of plans during a widespread fuel supply disruption will be limited partially by the lack of preparation occurring at regional and local government agencies. State energy offices can “require county and municipal petroleum product emergency plans.” But unless and until the development of these plans is identified as an urgent need, and ideally funding is provided to develop these plans, it appears unlikely that local/regional transportation energy contingency planning will occur. While local and regional government agencies were focused on developing transportation energy contingency plans in the immediate aftermath of the fuel supply disruptions of the 1970s, this type of local planning is very uncommon now. However, on an encouraging note, a new and promising Federal initiative, called the Local Energy Assurance Planning initiative, has awarded about $8 million worth of grants to 43 cities to bolster local energy assurance planning. It appears that this initiative focuses primarily on electric power contingency planning, but does not appear to preclude considerations of transportation energy contingency planning.
2. Local and state government agencies will focus on the most pressing issues at any given time; right now preparedness for oil/fuel supply disruptions isn’t one of those issues. While regional and local governments understand the value of developing emergency plans or “continuity of operations” plans for a number of potential emergencies (such as earthquakes, pandemics, the failure of critical infrastructure, biological weapons attack, etc.), developing a plan for fuel supply emergencies is not viewed as a pressing issue right now. This is particularly true since little funding is available to work on these issues, and government agencies are seeing agency demands increasing while resources are dwindling. There are no incentives to undertake contingency planning at local and regional levels.
3. Why should regional and local governments bother? This is a different type of emergency than is typically prepared for. And we don’t have good information on how pre-planning would actually help during a shortage. Determining, with any certainty, how helpful contingency planning will be when the emergency arrives is challenging for any kind of emergency, including fuel supply disruptions. There has been only limited analysis conducted of how local and regional transportation energy contingency planning has helped conserve fuel during an actual emergency, or helped mitigate the economic impacts of a fuel shortage. While the IEA has estimated the impacts of various strategies to quickly reduce oil consumption, and encouraged pre-planning to be better prepared, those estimates have been developed across all IEA countries, or just U.S. and Canada (rather than for a city or region). It’s difficult to make the case for the benefits of pre-planning at the local and regional levels with only scant information about the benefits of doing so.
In addition, fuel supply disruptions usually represent an economic crisis, rather than one that puts lives at risks (although vulnerable populations may be at increased risk during a lengthy fuel supply disruption). Is regional contingency planning for a potential economic crisis warranted? Do we do this type of emergency planning for any other economic threats? We need to have a better understanding of the value of regional and local transportation energy contingency planning, and how to focus advance planning activities on those actions most likely to have the greatest impact, given the likely limited resources governments will have available.
4. It will be “all hands on deck” when a crisis occurs or is imminent. State and local government agencies can be adaptable and flexible, and once a fuel shortage crisis is imminent or underway it will be viewed as a major priority and will become an “all hands on deck” situation. Unfortunately, some of the pre-planning and coordination that would be very helpful to have occurred well ahead of time (see the list of examples provided above) to better prepare for fuel supply disruptions might occur during a crisis rather than beforehand. So some period of confusion and scrambling currently appears likely. More planning and preparation at local and regional levels before a crisis occurs would help reduce the negative impacts and the scrambling that would occur during a crisis.
5. In urban areas, public anger over the response to fuel supply disruptions may to a large degree focus on transit agencies, due to their inability to quickly increase transit service in response to overcrowded buses and trains. The general public will likely have unrealistic expectations about how quickly transit agencies can increase service to respond to fuel shortages, and unrealistic views on the impact of an increase in transit service on the region’s overall demand for fuel. When a fuel shortage occurs, providing timely and realistic information to the public on how quickly service can be increased and by how much will be critical to maintaining public confidence. It will also be important to direct the traveling public to the most viable options to modify their own travel behavior. A general public statement such as “the transit agencies are working to quickly increase transit service” may mislead the public, as the public may underestimate the time it will take to increase service, and overestimate the amount of additional service that will be provided.
6. Many of the obstacles identified in the early 1980s still exist today. While the internet makes information sharing about transit service, and how to find vanpool and carpool partners much easier today than in the 1970s, many of the barriers to effective transportation energy contingency planning and response at the local and regional levels identified in 1981 are still obstacles today. These obstacles previously identified and still problematic today include the following: (1) few regional/local transportation energy contingency plans have been developed; (2) there will be problems with acquiring, maintaining, and activating a reserve bus fleet to respond to fuel shortages; (3) there are conflicts between planned actions and labor agreement provisions; and (4) there is a lack of funding for contingency actions.
7. The strategic petroleum reserve (SPR) can help with short-term oil supply disruptions, but some parts of the country are not easily served by the SPR. The strategic petroleum reserve sites are concentrated along the gulf coast, in the heart of the U.S. energy industry. Therefore, the SPR can fairly quickly provide oil in response to spot oil supply disruptions to the refineries in the gulf coast, and to the crude oil pipelines originating in the gulf coast area. The SPR has proven to be helpful during spot shortages in the past. However, almost all of the west coast, for example, does not have quick access to oil from the SPR since there are no oil or refined product pipelines connecting the hub of the U.S. energy infrastructure in the gulf coast area to the west coast. For the west coast, the “energy infrastructure provides only limited flexibility to accommodate short-term issues. Thus, if a few refineries encounter operating problems, if there is a problem in the distribution system (pipeline or other) or if prevailing prices jump, there is no quick mechanism for the energy industry to respond.” The federal government is already aware that there are some risks associated with the concentration of emergency energy response systems along the gulf coast, since this area is subject to frequent hurricanes.
A Short Wish List To Improve Preparation for Fuel Supply Disruptions
We may be at risk again for widespread or localized fuel supply disruptions. Below are a few ideas for how government agencies could start to work together more actively so regional and local communities can be better prepared to quickly help the traveling public respond to fuel supply disruptions:
(26) http://www.pipeline101.com/Overview/crude-pl.html and http://www.pipeline101.com/Overview/products-pl.html
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