Glitch fuels Vegas gasoline shortages

Chris Jones

Thursday, Jan. 17, 2002 | 11:11 a.m.

A software glitch at a Las Vegas-area gasoline and diesel fuel depot Tuesday and Wednesday left scores of truckers with empty tanks for about 36 hours and prompted temporary shortages at some local truck stops and service stations.

The problem began around 10 a.m. Tuesday at a Las Vegas fuel terminal operated by Kinder Morgan Energy Partners LP, a Houston-based pipeline company that transports gasoline, diesel and jet fuel from California to Southern Nevada.

An attempt to upgrade software in the system that handles the fueling of gasoline and diesel tanker trucks went awry and resulted in a shutdown of fueling at the site, said Rick Rainey, spokesman for Kinder Morgan. The problem was resolved around 10 p.m. Wednesday.

A separate line used to supply jet fuel to McCarran International Airport was not affected.

Although there was no reported damage to the pipeline itself, the software problem cut off delivery of fuel to the tanker trucks that would normally fill up at the depot before delivering gasoline and diesel fuel to service stations and other fuel providers in the area.

"We're back up and had put more than 100 trucks through by 7:30 a.m. (today)," Rainey said. "On a normal day we'll process about 300 trucks, so we're going as fast as we can to get caught up."

Before the software problem was resolved, it forced drivers to park their trucks and wait for a resolution.

Among the stranded was Darrell Kirby, a driver for Tri-Valley Distributing of St. George, Utah. He arrived at Kinder Morgan's terminal, located on Sloan Lane just north of Nellis Air Force Base, around noon Tuesday. He said as many as 75 drivers were awaiting gasoline late Wednesday afternoon before many left their trucks at the depot and went home.

"My company asked me to wait here so I slept in my truck's cab," said Kirby, who added he's encountered software-related delays at least three times since Kinder Morgan took over the pipeline from GATX Corp. last year.

"Whenever they try to upgrade their system, it goes down," Kirby said. "It's not our fault when stations are empty. It's because we can't get to the gasoline and Las Vegas is going to be running out of gas because we've been sitting too long."

That was the case at the Pilot Travel Center at 3812 E. Craig Road, which sold the last of its regular unleaded and diesel fuel around 10 a.m. Wednesday. While drivers in need of diesel fuel were forced to wait or look elsewhere until a shipment of fuel could arrive by truck from Barstow, Calif., Manager Ed Dempsey temporarily satisfied others by selling midgrade unleaded at regular unleaded prices.

"It was that or shut the pumps down," Dempsey said.

David Robinson, general manager of River City Petroleum in Las Vegas, said his company tapped into its underground reserves to supply its gasoline customers with product. To acquire additional diesel fuel for his client, the local bus company Citizens Area Transit, he paid an additional $1,200 to bring in two tankers from Barstow.

"Letting the city's buses shut down was not a risk we were willing to take so we opted to use trucks," Robinson said. "Anytime there's a problem with (the pipeline) it creates this dilemma for distributors and the economic impact has to be passed on to the customer or absorbed by us.

"You're caught in the middle between making sure your customer doesn't run out while trying not to take on additional expenses."

Peter Krueger, state executive for the Nevada Petroleum Marketers Association, said unexpected or long-term shutdowns of access to Kinder Morgan's CALNEV pipeline forces gasoline wholesalers to import fuel reserves by truck from locations outside the Las Vegas Valley. That method increases wholesalers' fuel costs, however, and Krueger said anything more than a two or three day disruption could translate to higher prices at the gas pump.

"The cost per gallon to truck is more than the cost per gallon from the pipeline," Krueger said. "I haven't gotten any indication that this has shown up at the pump yet, but I suspect that if this thing isn't fixed pretty quickly, there would be some upward pressure on price because of the transportation costs."

Krueger said shipping fuel by truck or train are the only options currently available to maintain fuel supplies to Southern Nevada should problems arise on the CALNEV pipeline.

"There are no new pipelines planned, and this pipeline's chances of failure stem from wear and tear, electricity going down or even terrorist actions," Krueger said. "Trucks would be the first option (following a disruption), and any outage of around two or three weeks would probably prompt the distributors to start lining up rail cars, but that's a much slower process.'

Obtaining fuel from outside the valley is also complicated by environmental concerns. Nevada law requires the use of oxygenated gasoline to reduce pollution from vehicle emissions, but similar restrictions aren't in place in every adjoining state -- possibly making some nearby gasoline unfit for local use.

"There may be a whole bunch of fuel sitting in Salt Lake City, but it may not be compatible," said Krueger, who listed Reno, California and Arizona as suitable targets for gasoline acquisition.