County seeks long-term solutions to fuel woes

Tuesday, Aug. 16, 2005 | 11:07 a.m.

While Clark County officials hope a blue-ribbon committee will provide ideas to help solve a growing fuel-supply problem in Southern Nevada, it's the West's oil refineries that hold the key to long-term solutions to the problem.

Rick Rainey, a spokesman for Houston-based Kinder Morgan Inc., which operates 35,000 miles of pipelines for natural gas and petroleum products nationwide, including two 275-mile links between its Colton Terminal in Bloomington, Calif., and Las Vegas, said decisions to increase pipeline capacity are based on demand calculated by refineries.

The pipelines that supply Southern Nevada were built more than 40 years ago, when Las Vegas had a population of about 65,000 people.

"We're in discussions with the refineries on a regular basis," said Rainey, who likened the role of his company to "a giant toll collector" that provides for the transmission of fuel from the oil companies to customers.

So, until the refineries demand an increase in transmission capacity, Kinder Morgan wouldn't be compelled to undertake improvements for the transmission of fuel to Las Vegas.

"We have taken steps to increase the amount of fuel available in Las Vegas and are more than willing to keep open the line of communication between the refineries and the government leaders in Southern Nevada," Rainey said.

In all likelihood, local leaders will take the company up on the offer.

On Monday, Clark County Commission Chairman Rory Reid said he'll take a proposal to form a special committee to study the fuel-supply issue to the full commission at its Sept. 6 meeting. Reid says he hopes to form a committee of about 10 people by mid- to late September. Panelists are expected to be representatives of stakeholders in the fuel-supply system -- the airport, airlines and local petroleum wholesalers.

The committee would be similar to other special county task forces that have been formed to study Clark County growth, ethics and financial issues at the county-funded University Medical Center. County Manager Thom Reilly said special task forces have been effective in identifying problems and solutions to some of the gnarliest issues facing local government.

The move to form the committee was spurred by recent reports of fuel crunches at airports nationwide and the disclosure earlier this month that pipeline enhancements on Kinder Morgan's Colton-Las Vegas line have not delivered the capacity that was anticipated.

Clark County Aviation Department Director Randy Walker said the anticipated growth in the number of flights operating at McCarran International Airport would produce more demand than available supply by 2007.

McCarran is fed by an 8-inch pipeline that delivers nothing but jet fuel from Colton to the airport. The 8-inch line delivers 27,000 barrels of fuel -- about 1.13 million gallons -- a day. Currently, the airport uses an average of about 26,000 barrels a day.

But by 2007, demand is expected to climb to 29,000 barrels a day if growth continues at its current pace.

A second pipeline that carries other types of fuel delivers those products to a storage terminal in North Las Vegas, near Nellis Air Force Base. That 14-inch line carries about 96,000 barrels a day; there is no jet fuel stored at that terminal.

Storage tanks at McCarran can hold about 5 1/2 days' worth of fuel while the North Las Vegas Terminal can hold about 3 1/2 days' worth.

The pipelines delivering fuel to Southern Nevada were built in the mid-1960s by GATX Corp., a Chicago-based transmission and transportation leasing company. Kinder Morgan acquired the pipelines in 2001 and added storage tank capacity at McCarran in 2002 and at the North Las Vegas Terminal in 2003 as a short-term solution to capacity problems.

Compounding the supply problem in recent years, the Colton-Las Vegas pipelines have experienced a series of closures due to mudslides, power outages, flash floods and train derailments.

In January, a line was shut down for four days when heavy rain and floods uncovered the pipe. The shutdown was a precaution until inspectors could examine the line for damage.

In October, both pipelines were closed when heavy rain resulted in a train derailment that caused a two-day stoppage of fuel. In both cases, federal officials allowed additional fuel trucks to make runs from California to avert shortages.

Reid said the fuel-supply committee would study short-term, mid-term and long-term solutions to capacity problems.

Short-term solutions could include adding booster pumping stations along the pipelines to increase the flow and volume of petroleum. Long-term solutions may include adding a new pipeline from Colton or developing a pipeline from a different source, such as Utah, Northern California or Phoenix, where Kinder Morgan is building a 16-inch line linking Arizona with Texas.

Earlier this month, Kinder Morgan announced the 140-mile, $130 million project, which is expected to boost capacity for Tucson and Phoenix with added supply from Texas and New Mexico refineries.

That expansion is in addition to a $210 million project that already was under way in that region. The project, known as the East Line improvement, is expected to be in operation by the summer of 2007.

Rainey said the East Line project was supported by refineries responding to increased demand in Arizona.

Walker said a new line from Colton probably would take a minimum of three years and cost about $400 million to build.