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Adding ethanol led to hiccups in the supply chain

12:00 AM CDT on Sunday, May 28, 2006

When several stations ran out of gasoline in April, some drivers began to have visions of a long summer spent waiting in 1970s-style gas lines. Other drivers saw another excuse for fuel companies to raise prices.

In reality, the process of moving gasoline from refiner to service station hit some temporary snags.

Service stations in Dallas, Tarrant, Denton and Collin counties must use a reformulated blend of gasoline for environmental reasons. This year, refiners began using ethanol to make that blend.

That adds a whole new aspect to the gasoline supply chain. Ethanol must be delivered to terminals in enough time and in sufficient amounts to be added to the gasoline that goes to retail stations.

Further, distributors and retailers had to prepare their equipment to handle the ethanol. That's because ethanol mixes with water, and water can corrode gasoline pipelines and tanks.

Water isn't an issue with regular gasoline, which repels water.

So distributors and gasoline station owners had to empty their tanks of the gasoline – literally run out – and make sure the tanks contained no water before filling them again with the ethanol blend of gasoline.

A few hiccups in the supply chain led to shortages at some stations and boosted prices.

Conspiracy Theory

Gasoline shortages during the spring were a scam to drive up prices

Reality

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