Fuel prices expected to heat up even more

By Terry Scruton
senior writer

This summer, it will be a race to see which rises faster: the temperature, the price of diesel or the blood pressure of the average trucker.

The U.S. Energy Information Administration's short-term energy outlook released in May called for an average summer diesel price of about $2.75 per gallon. That's up about 13 cents from the previous forecast released in April.

Compare that with last year's actual average of $2.59 per gallon for diesel from April through September.

Add to that the fact that the national average price for diesel for the week ending May 8 already beat the EIA's forecast, at $2.897 per gallon. And in California, diesel has been above $3 a gallon since April.

Put it all together and you've got a recipe for a long, expensive summer. In fact, the EIA's report said drivers shouldn't expect prices to drop any time soon.

"The prospects for significant improvement in the world petroleum supply and demand balance appear to be fading," the report said.

What that means, according to the report, is that while U.S. fuel production will continue to grow in 2006 as more refineries recover from last year's hurricanes, significant production increases are not expected from other sources, such as the Organization of Petroleum Exporting Countries.

In addition, world demand for oil is only expected to keep on rising, which will put further strain on supplies.

The good news, if it can be called that, is that the forecast said that - barring any further significant damage from hurricanes - fuel prices in September should be significantly lower than they were in 2005.

However, the report cautions, "with another active hurricane season possible this year, news of developing hurricanes and tropical storms with a potential to cause significant new outages could add to volatility" in prices toward the end of the summer.

Complicating factors
Another potential problem could be the switch to ultra low-sulfur diesel, which began at the refinery level on June 1.

Problems with the government-mandated switchover from gasoline additive MLBE to ethanol have already been blamed for some gasoline price increases. This could be a sign of things to come for the switchover to ULSD.

The Environmental Protection Agency said that any disruptions along the pipelines during the transition process could lead to spot shortages and localized price spikes. As it is, ULSD is expected to cost as much as 5 or 6 cents more than current diesel prices.

In the April forecast, EIA officials said that the transition to ultra low-sulfur diesel is "possibly the most difficult fuel specification transition the refining industry has had to make so far" and that transition will result in "increased production costs and distribution complexity."

Supplies of ultra low-sulfur diesel are another concern. The April report said it may be difficult to obtain imports of ULSD, which could cause localized price spikes in the event of a domestic supply disruption like last year's hurricanes.

Takin' it to the streets
There is already a growing resistance to the higher prices. The EIA report said that, although world demand is up in 2006 compared to 2005, rising fuel prices have kept the demand from going as high as predicted. And at the local level, things are heating up across the country.

The co-host of a morning show on a New York radio station called for truckers there to shut down their rigs on May 15 to protest the high price of diesel.

Bob Wolf of WPYX-FM radio said he got the idea when truckers called in to complain about the high price of diesel - which is at $3 per gallon or more at many New York truck stops.

Wolf told "Land Line Now" that truckers pay 28 cents a gallon just in New York fuel taxes, and that a work stoppage might prompt state lawmakers to lower that tax.

In addition, a truck stop owner in Connecticut urged truckers to park their rigs on May 30 to protest high fuel prices.

Walter Dethier, who owns the Berkshire Country Stop store in West Cornwall, CT, said he hoped four-wheelers will join the protest, too.

Land Line went to press before both of these events were scheduled to take place.

Meanwhile, in Texas, an entire county was getting into the act.

In May, officials in Bee County, TX, called on residents to boycott stations that sell Exxon-Mobil fuel.

The Express-News reported that County Judge Jimmy Martinez wanted retailers to drop prices to $1.30 per gallon.

And Exxon-Mobil was targeted, the paper said, because its former CEO got a $400 million retirement package.

Martinez said the resolution the county passed that calls for the boycott offers residents "a beacon of hope."

terry_scruton@landlinemag.com
Staff Writer Reed Black contributed to this article.

 

A tangled Web

A look at some of the fuel price info available online

By Terry Scruton
senior writer

Keeping track of fuel costs these days isn't easy. Blink once driving past a truck stop and the price may change.

The Internet can be a good source for fuel price information the next time you are planning a route or just looking for the cheapest place in town.

All of the major truck stops post up-to-date fuel cost information on their Web sites. Most of them keep fairly current information on which stations are out of fuel and which ones may be running low as well.

AAA posts daily fuel price averages for each state on its Web site. The auto club surveys more than 60,000 self-serve stations and posts pricing updates every business day. However, the information does not include truck stops.

For average truck stop prices by state, ProMiles is probably a trucker's best bet. ProMiles, which is posted on the OOIDA Web site every day, collects its price data from more than 7,000 truck stops.

A more consumer-oriented Web site is Gasbuddy.com, which provides daily updates on gasoline and diesel prices for every state and just about every major city in the country. The only drawback is that the information is submitted by users, so it may not always be accurate.

The site does provide links to a mapping service that also provides addresses and contact information, so a quick phone call can confirm any price.

MSN.com has a fuel price Web site at autos.msn.com. Type in your ZIP code and it will give you a rundown of the fuel prices in that area. One caution: prices on this Web site are not always updated daily. Some of them may be a day or two old. 

And then, of course, for weekly updates, there's the Energy Information Agency. The agency provides weekly price information based on region, so it's not as good for trip planning, but it is a good indication of the price trends in a given area.

Print and save this list to find fuel prices online

AAA:  www.fuelgaugereport.com/sbsavg.asp
Ambest:  am-best.com/fuel/fuellist.cfm
EIA weekly update:  tonto.eia.doe.gov/oog/info/wohdp/diesel_detail_report.asp
Flying J:  flyingj.com/fuel/diesel_CF.cfm
Loves:  loves.com/allstatesfuel_prices.asp
MSN:  autos.msn.com/everyday/gasstations.aspx
ooida.com Click on the "Fuel Prices" link on the left side of the home page.
Petro:  petrotruckstops.com/fuel_search.sstg
Pilot:  www.pilotcorp.com/locations/travel_centers/complete_pricing_list.aspx
ProMiles: Daily fuel prices from ProMiles are available on OOIDA's Web page.
Sapp Bros. Truck Stops:  sappbrostruckstops.com/
TA:  tatravelcenters.com

 

ULSD at the pumps not so ultra-low

Although ULSD is popping up around the country, it's probably not the real deal - just yet

By Terry Scruton
senior writer

Though the official deadline for retail roll-out isn't until October, ultra low-sulfur diesel may be closer than you think.

In fact, at some retail outlets, it's already here.

Mindy Long, spokeswoman for Natso, told "Land Line Now" in May that a handful of that group's members were starting to get deliveries of ULSD. Though she did not specify which truck stops those Natso members operate, Long said they most likely were just trying to get a head start on the switchover.

She also said drivers should not expect to find ULSD at too many pumps until it gets closer to October.

"It's still rare that locations will have UL because the refineries aren't producing as much right now as they will be after the EPA deadlines take effect," she said.

Some OOIDA members have reported seeing ULSD at truck stops in Nashville and Virginia. While Long did not confirm that, she did say that most likely some retailers are simply trying to clean the sulfur out of their underground tanks right now.

"(They) can either empty the tank and steam clean it, or, they will take a little more time and let the tank get down as low as possible, and then refill it with ULSD," she said. "They will do this process three or four times - however long it takes - to get the sulfur levels down low enough to meet the EPA guidelines."

Because of this, Long said that any retailer that might be selling ULSD won't label it as such yet because the pumps aren't completely cleaned out, so technically, what's being sold doesn't meet the EPA standard of 15 ppm for ULSD.

Meanwhile, a group called the Clean Diesel Fuel Alliance has launched a Web site aimed at providing information about the changeover to ultra low-sulfur diesel.

The alliance is a cross-section of government agencies and groups representing oil companies, engine manufacturers and the trucking industry, as well as government agencies concerned with ULSD.

The site, www.clean-diesel.org, provides, among other things, a breakdown of the deadlines for the rollout of ultra low-sulfur diesel, which are different for California than for the rest of the country.

The deadlines run as follows:

In other ULSD news, the Environmental Protection Agency has relaxed the testing limits on ultra low-sulfur diesel.

To give testing equipment a little more wiggle room and a little more time to adjust to the new fuel, the EPA has raised the sulfur tolerance level from 2 ppm to 3 ppm. The temporary adjustment will last through Oct. 14, 2008, according to a press release from the EPA.

According to the release, this means that testing instruments are essentially being given a margin of error of 3 ppm above the 15 ppm cap on sulfur limits. The EPA said it extended the limit to "ensure that fuel actually meeting the 15 ppm cap is not falsely rejected" as the switchover begins at the refining level in June.

The adjustment will also provide laboratories additional time to adjust their testing technology and develop more accurate measuring techniques.

terry_scruton@landlinemag.com
Staff Writer Reed Black contributed to this article.