SPECIAL REPORT: Diesel continues to run low in Colorado, Wyoming

| 8/8/2006

Diesel rationing in Colorado and Wyoming is apparently not widespread at the consumer level, but wholesalers and retailers are feeling the pinch as several forces combine to slow the flow of fuel.

Low supplies in and around Denver led to rationing - or "allocating," as the corporate spokespeople like to say - late last week at a TA where the limit was 50 gallons of diesel per customer. Reports Tuesday in The Rocky Mountain News said that a Shoco Oil station in Commerce City, CO, had a 50-gallon limit in effect because of limited supplies.

Similar problems are occurring along Interstates 80 and 25, as well as in the Cheyenne, WY, area. Supply problems have been reported in Nebraska and Kansas as well.

The Denver TA was able to resume regular operations Saturday, according to TA spokesman Tom Liutkus, but Tuesday in Fort Collins The Coloradoan newspaper reported that a Shell station was out of diesel.

"We're already out of diesel," assistant station manager Allyson Brenda told the newspaper. "We got the notification from Shell this morning that we would not get anymore."

A Shell Oil Co. spokeswoman told Land Line Tuesday afternoon that its supplies were not disrupted in Colorado, but that individual stations that use fuel other than Shell brand diesel may be experiencing problems.

At the Denver-based Gray Oil Co., which supplies mostly large account customers such as trucking fleets, government agencies and construction firms, Bryant Gimlin summed it up simply.

"This town is out of diesel," said Gimlin, energy risk manager for Gray Oil Co.

"A confluence of events - both planned and unplanned - have combined to create this situation."

Gimlin said that officials for the two main pipelines supplying the Denver area decided to switch over to ultra-low sulfur diesel at the same time, which caused a supply slowdown. That, combined with high summer demand and high demand for off-road diesel for harvest season, is just more than the supply chain can handle.

Steve Douglas, a manager with Suncor Energy, agreed with Gimlin's assessment.

Suncor operates refineries and supplies about a third of the state's diesel requirement - about 20,000 barrels per day. Douglas said that a high demand for jet fuel - which Suncor also produces - is contributing to the supply crunch.

Douglas said that Suncor, which is the exclusive supplier for Phillips 66 brand products in Colorado, is limiting its customers to their contracted amounts only. Usually they provide as much as their customers can sell, but that's not the case right now.

"We are even allocating based on a weekly or daily basis at some locations," Douglas said, explaining that Suncor officials want to make sure that the flow is not completely disrupted for anyone.

"We are operating full-out, trying to maintain maximum production. We can adjust our gasoline-diesel production a little and we are doing so to meet the diesel demand."

- By Coral Beach, staff editor