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To: Mark Adams who wrote (84695)	1/18/2001 10:34:00 PM
From: Mark Adams	Respond to of 95453

The CA power problem secondary ripples: biz.yahoo.com Calif. Gasoline Shortages Possible By MICHAEL LIEDTKE AP Business Writer SAN FRANCISCO (AP) -- The power crisis temporarily shut down California's main gasoline artery for more than 10 hours for the third consecutive day, raising the threat of widespread fuel shortages. Kinder Morgan Energy, one of many businesses agreeing to go without power in exchange for lower rates, couldn't pipe gasoline from major California refineries to terminals around the state for 12 hours on Thursday. The California pipeline, which distributes up to 900,000 barrels of gasoline during a normal day, didn't operate for 18 hours Wednesday and 10 hours Tuesday, said Kinder Morgan spokesman Larry Pierce. The pipeline has been shut down several other times in the last few months, but usually for no more than a few hours at a time. Pacific Gas and Electric Co. sought a waiver Thursday allowing Houston-based Kinder Morgan out of its service-interruption contract, but PG&E spokesman Ron Low said the state Public Utilities Commission denied the request. The volatile situation soon could lead to long gas lines and higher prices at the pump, warned Bill Greehey, CEO of Valero Energy, which operates a 125,000-barrel-per-day Benicia refinery that produces about 10 percent of the state's gasoline supply. ``California is getting to the point where they are going to have a crisis that is a helluva lot bigger than the one it already has on its hands,'' Greehey warned. Fuel is sitting in refineries instead of making its way to gas pumps because of the pipeline outages. If the gasoline deliveries continue to back up, industry executives warn they will have to curb production at refineries because they won't have anywhere to store the fuel. ``If this continues like it has the last few days, this is definitely going to become a huge issue,'' said Pierce of Kinder Morgan. A gas station in El Centro reported Thursday that it already is on the brink of running out of gasoline if it doesn't get a delivery in the next day or so, said Jay McKeeman, executive vice president for the California Independent Oil Marketers Association, a trade group. ``It's going to be a big problem if it goes on much further and it could take months to iron out,'' McKeeman said. He wrote a letter to Gov. Gray Davis and state regulators urging them to ensure that Kinder Morgan's power isn't interrupted. San Antonio-based Valero, which bought its Benicia refinery last year from Exxon Mobil, notified Attorney General Bill Lockyer of the looming gasoline crisis Thursday, Greehey said. Lockyer spokeswoman Sandra Michioku said Thursday evening the situation ``raises a concern for us, and we in communication with the governor's office about it.'' It doesn't take much to create gasoline shortages in California because of the state's strict regulations requiring clean-burning fuel. In recent years, refinery fires and plant closures have created shortages that left the state with much higher gas prices than the rest of the country. If the backlog in the delivery pipeline persists, industry executives said California gasoline supply might not be restored to normal levels until the spring. Unleaded automobile gasoline isn't the only fuel that has been affected by the delivery problems. Diesel and jet fuel supplies also aren't getting to customers. Kinder Morgan believes it has found a way to ensure deliveries of jet fuel to San Francisco International Airport, Pierce said Thursday. Similar problems are threatening southern Nevada. A pipeline operator said electricity to five pumping stations between Los Angeles and Las Vegas has been cut from 24 hours a day to less than six overnight hours, and that could lead to shortages of jet fuel at McCarran International Airport in Las Vegas.

To: Mark Adams who wrote (84695)	1/18/2001 10:39:24 PM
From: Douglas V. Fant	Read Replies (1) \| Respond to of 95453

Mark Adams, You also have a credit crunch for about 30% of the farmers in the Central Valley of California. Fertilizer plants use lots of NG and fertilizer prices have doubled since last growing season while prices on commodities like cotton have dropped about 9 cents and also true for winter wheats. So look for cotton and wheat crops to be affected- truck farming of produce like lettuce and melons will continue unabated, and of course orange growers must keep watering their trees, unlike seasonal crops... Also must distinguish between furrow flooding operations and drip farms for energy usage....