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October 14, 2005

ARCHIVE: Fuel Shortage


Las Vegas's fuel supply lines are at 97 percent of capacity and fuel reserves would sustain the state's needs for less than two days. That puts Nevada in such a precarious position that the aftermath of Hurricane Katrina prompted Governor Kenny Guinn to urge Nevadan's not to make panic purchases of fuel. KNPR's Ky Plaskon reports efforts to alleviate Las Vegas fuel supply woes.

SOUND: Fill'er up.

PLASKON: This week city and state officials joined downtown to christen the state's first public biodiesel gas pump. John Haycock, CEO of Haycock Petroleum, says it cuts down on demand for fossil fuels in the valley since it's partially made of vegetable oil.

HAYCOCK: Is this the answer to all of our fuel problems, no, not by a long way, this is one product that is going to have an effect on diesel fuel and the amount of petroleum diesel consumed in Southern Nevada.

PLASKON: Another effort to diversify the fuel supply was made earlier this year with another pump was unveiled in Henderson for gas vehicles that dispenses 85 percent corn-based fuel.

SOUND: County commission.

PLASKON: The county commission is also studying how to diversify the valley's fuel supply.

REID: It is a complex issue and one we need to confront because if we don't do it today we are going to have a crisis and we need to plan before we have a crisis.

PLASKON: County Commissioner Rory Reid explains that the airport prompted the commission to create a task force to study the valley's 40-year old fuel supply infrastructure that according to the airport is at 97 to 99 percent of capacity. Already there are monthly interruptions in the valley's supply says Reid, regularly putting gas stations out of commission.

REID: Tell the community about the problem and then bring a bunch of people together that don't agree and create a forum where they can argue with one another, because the truth of the matter is when you have an honest argument, the truth emerges.

PLASKON: The task force includes representatives of the nature conservancy, airport, gas stations and the owner of the fuel pipelines feeding the valley. Reid says part of the point is to avoid litigation. Conservation groups tend to file suit when companies try to build new fossil fuel pipelines.

REID: That is why this group we have put together includes environmental groups because their view is that we are too reliant on fossil fuels so we have a member of the committee who is from the nature conservancy, and they will say that we need to diversify and they are probably right about that.

PLASKON: While it will take a year for the task force to come up with a recommendation, Reid and other say there are short-term solutions. Increase the strength of pumps to push more fuel through the current pipelines. Another idea is to drive trucks full of fuel to Las Vegas if need be.

WALKER: One thing that is happening on a greater basis is that airlines are actually tankering fuel out of McCarran.

PLASKON: Clark County Aviation Director Randall Walker explains tankering: Planes fill up their tanks here with more than they need because its cheaper to fill up here than in California. If airlines stopped doing that, it would significantly increase fuel availability in the rest of the valley according to Reid and Walker.

WALKER: That is the way the problem is solved, if the price goes up then people use less gas and it gets more in balance.

PLASKON: While a higher price would reduce demand, price would tip the tourism scale too.

GORDON: Ha ha ha, right, if there is a concern that people are concerned that they will not be able to fill up their tank then we have some concerns in that regard.

PLASKON: Brian Gordon is the principal researcher at Applied Analysis. He issued a report this month that the margin of demand outpacing supply in Las Vegas is wafer thin. He and others doubt there will be an altogether interruption in fuel supply, but a study last week by MRC group showed that a price increases to 3 dollars a gallon could cost Las Vegas a million tourists. That's something Las Vegas has little control over when a quarter of the city's tourists come from Los Angeles where gas prices are only a few cents from the 3-dollar mark. Dave Schwartz, director of UNLV's center for gaming research says the gaming industry has to some extent inadvertently insulated itself from gas-price driven drops in tourism.

SCHWARTZ: If people have a second home here then they are much more likely to come here even if travel is a little more expensive because they already have such a huge investment.

FELDMAN: I suspect that people who own a half million or million dollar property are less concerned with getting here than people who are looking for a budget room and show package.

PLASKON: Alan Feldman Senior Vice President of Public Affairs for MGM Mirage says offering high-end condominiums is part of the gaming industries approach, offering attractive products to attract the right people who aren't affected as heavily by gas prices.

FELDMAN: Sort of up the ante, that way rather than try to manipulate gas prices which is virtually impossible."

PLASKON: Inadequate fuel supply, says Feldman, isn't the only challenge Las Vegas faces by outgrowing its infrastructure.

FELDMAN: I suppose you could sort of create a doomsday scenario with any one of them.

PLASKON: Air quality, power costs, water and housing prices could threaten the economy too he says.

FELDMAN: All of these things are sort of interrelated, we have really got to be dealing with all of these things.

Mayor Oscar Goodman (second seat in black) PLASKON: He says Las Vegas needs to approach alternative transportation options throughout the city with a much more spirited discussion.

SOUND: Viva Bike Vegas. Viva Bike Vegas.

PLASKON: That spirit came alive this month as an Elvis impersonator christened Mayor Oscar Goodman's first bike ride in a decade. The event promoted the Regional Transportation Commissions' new bike map. It's part of a 100- million-dollar effort to get people to engage in the alternative transportation of commuting on bikes to cut down on traffic and gas consumption.

Ky Plaskon, News 88-9 KNPR

See discussion rules.


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