Political Leaders Urge Gas Conservation Gasoline prices spike above $3 a gallon in many parts of the country, and some stations have no gas to sell at any prices, as the fallout from Hurricane Katrina spreads. Energy companies have resorted to de facto rationing, and political leaders are urging the public to resist panic buying to avoid making matters worse.
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Political Leaders Urge Gas Conservation

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Political Leaders Urge Gas Conservation

Political Leaders Urge Gas Conservation

Political Leaders Urge Gas Conservation

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Gasoline prices spike above $3 a gallon in many parts of the country, and some stations have no gas to sell at any prices, as the fallout from Hurricane Katrina spreads. Energy companies have resorted to de facto rationing, and political leaders are urging the public to resist panic buying to avoid making matters worse.

RENEE MONTAGNE, host:

There are reports this morning that the US will receive emergency oil and gasoline from European stockpiles. An announcement about the release is expected later today. It would supplement oil that's being tapped from the domestic strategic petroleum reserve all being done to ease the energy supply shock caused by Hurricane Katrina. Gas prices have soared above $3 a gallon in many parts of the country. Political leaders are urging the public to avoid the panic buying that would make matters worse. NPR's Scott Horsley reports.

SCOTT HORSLEY reporting:

Katrina's awful damage is quickly making its way through the nation's fuel network, triggering 1970s-style gas lines as pumps run dry as far away as Wisconsin. Charles Cole resorted to pushing his truck outside an Exxon station in Jackson, Mississippi. The station had run out of gas Wednesday evening. And when a fresh delivery arrived yesterday, cars lined up for half a mile in both directions.

Mr. CHARLES COLE: I mean, I've just been sitting here waiting in line. My truck is low on gas. It's just about completely out. And since I'm on a down slope now, I'm going to push it down, stay in line and push it down until I'll be able to get some gas.

HORSLEY: Some consumers, whose gas tanks were already nearly full, tried to beat rising prices or suspected outages by adding extra gallons, which only aggravates the problem of long lines and shortages. President Bush yesterday urged drivers to conserve gas and not resort to panic buying.

President GEORGE W. BUSH: Americans should be prudent in their use of energy during the course of the next few weeks. Don't buy gas if you don't need it.

HORSLEY: The administration also warned retailers against price gouging. Some of the most expensive stations in and around Atlanta began to cut their prices.

The Gulf Coast refineries shut down by Katrina produce about 10 percent of the nation's gasoline, but the ripple effects are broader than that, because the storm also idled pipelines and buried Gulf coast supply terminals underwater. One big wholesaler says the major oil companies are effectively rationing gasoline among dealers in an effort to spread the pain. Still, economist Sarah Banaszak of the American Petroleum Institute says actual shortages of gas are relatively isolated.

Ms. SARAH BANASZAK (American Petroleum Institute): In some cases, it may be people lining up. In some cases, the retailer may only be able to receive a more limited amount of gasoline from the wholesaler while they sort out exactly where they are with things. So, you know, since nobody planned for that, then they might find themselves a bit short that way, as well.

HORSLEY: Banaszak says there's some encouraging news on the pipeline front. Major arteries, like the Capline and Colonial Pipeline, which carry gas and crude oil to the East Coast and Midwest, are slowly coming back in service.

Ms. BANASZAK: The situation with the pipelines was primarily a loss of power, and they've been able to get power supply back to these pipelines so they can at least begin some operations.

HORSLEY: Authorities say most of the immediate distribution problems will probably be corrected quickly, although prices will likely rise. So far, Katrina has had a mixed impact across the country with gas prices rising as little as 10 cents a gallon in some areas and more than a dollar in others. How high prices eventually climb will depend largely on how quickly refineries are repaired. The Valero refinery in St. Charles, Louisiana, got power back yesterday. The Energy Department says some damaged refineries could be up and running in a week or two while others may be down for several months. Even before the hurricane, a growing economy had pushed gasoline prices to record levels. Consumers largely shrugged off those earlier price increases, but Phil Flynn of Alaron Trading in Chicago worries these new price hikes could be different.

Mr. PHIL FLYNN (Alaron Trading): This is probably going to, you know, hurt the consumer more than the price rises we've already seen, because this price rise is not being caused by economic growth. It's being caused by a catastrophe.

HORSLEY: Beyond gasoline, the storm will affect supplies of heating oil and natural gas. The Gulf ordinarily supplies almost 20 percent of the nation's natural gas, and the vast majority of that production is shut down. Scott Horsley, NPR News.

MONTAGNE: A Weblog on the aftermath of Hurricane Katrina is at npr.org. Included is a link to the Energy Department, which is monitoring gas sales for price gouging.

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