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Fuel delivery problems caused by ethanol switch Original Source Link: (May no longer be active)
http://www.bloomberg.com/apps/news?pid=10000103&sid=ak62_ygR4P4o&refer=ushttp://www.bloomberg.com/apps/news?pid=10000103&sid=ak62_ygR4P4o&refer=us
U.S. May Raise Gasoline Truck Hours on Ethanol Switch (Update2)
April 28 (Bloomberg) -- The U.S. Transportation Department may relax rules that limit the hours tanker truck drivers can work, after fuel-delivery problems caused filling stations to run out of gasoline.
Nine Shell stations in the Houston area were out of fuel today because tanker truck delays caused by the switchover to ethanol in reformulated gasoline, said Stan Mays, a spokesman for Motiva Enterprises LLC. About 60 stations were out of at least one grade of gasoline yesterday, he said. Motiva is jointly owned by Royal Dutch Shell PLC and Saudi Arabia.
New Mexico Senator Jeff Bingaman, the ranking Democrat on the Senate energy committee, and some states have asked the Transportation Department to extend driver hours, department spokesman Robert Johnson said.
``We are evaluating those requests at this time,'' Johnson said yesterday. ``In the administration's effort to help relieve the pain at the pump for consumers, we are considering all options at this point.''
Union Pacific Corp., the biggest U.S. railroad, slowed ethanol shipment to Dallas/Fort Worth because rail cars can't be unloaded fast enough to avoid congestion.
Pump prices have surged in recent weeks partly because gasoline for blending with ethanol is more expensive to make than fuel geared toward MTBE, the additive ethanol is replacing.
Crude Oil
A 25 percent rally in crude oil since Feb. 15 helped send prices higher. Crude accounts for about 55 percent of gasoline prices.
The average U.S. pump price for regular gasoline was $2.929 a gallon yesterday, up 17 percent from a month ago, according to the Web site of AAA, the nation's largest motoring club.
States including Pennsylvania, Virginia and Maryland have already extended the hours that drivers can work, Johnson said. New Jersey raised the hour limit until Monday, state Transportation Commissioner Kolluri Kris said in an interview.
A federal extension of hours would allow drivers to cross state lines.
Some service stations in Texas and eastern states including Pennsylvania and Maryland ran out of fuel this month as they emptied their tanks to prepare for new gasoline blends that contain the ethanol.
Union Pacific
Union Pacific alerted its customers in a letter dated April 26 that it would slow shipments of ethanol to the Dallas/Fort Worth area because of ``significant congestion'' at its rail terminal there.
``Ethanol in the Texas market is relatively new,'' Union Pacific spokesman James Barnes said. ``We want to make sure we can handle what is being transported efficiently so we don't add more congestion.'' Barnes would not say when ethanol shipments would return to normal.
Union Pacific has placed additional pumping units into service and increased operator staffing to process more trucks, the company told its customers.
The switchover to ethanol is part of a nationwide phase-out of the additive MTBE, or methyl tertiary butyl ether, in reformulated gasoline. Unlike ethanol, MTBE can be blended with gasoline at refineries and shipped to regional terminals by pipeline.
Most refineries will have switched to producing ethanol- blend gasoline by early May.
``I believe it may be appropriate to waive the caps placed on driver service hours to address or prevent spot shortages during this transition period,'' Bingaman said in his letter to Transportation Secretary Norman Mineta.
Driver Hours
Under federal guidelines, drivers are not allowed to work more than 11 hours for every 10 hours they're off duty, according to the Federal Motor Carrier Safety Administration's Web site.
In August, the Transportation Department suspended rules limiting trucker hours after Hurricane Katrina struck the U.S. Gulf Coast.
The wholesale price of ethanol, currently $2.6286 a gallon, has more than doubled over the past year ago, according to data compiled by Bloomberg.
Last Updated: April 28, 2006 16:21 EDT
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