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Economic and dam related articles

Gas Prices Likely to Spike in 2011

by Dean Brickey
East Oregonian, November 12, 2010

Lock closure will increase transport costs, bump up the price of fuel early next year.
The locks at The Dalles and John Day dams will be closed for 14 weeks for repairs, beginning Dec. 10

(Army Corps of Engineers) Workers walk near the The Dalles downstream gate during last year's outage. The lock will be closed from Dec. 10 to March 18 to replace the two downstream miter gates. Fuel shortages and higher prices could occur in Northeastern Oregon this winter while some Columbia River barge locks are being repaired.

The U.S. Army Corps of Engineers will close the locks at The Dalles and John Day dams Dec. 10 to begin maintenance work. Those closures are scheduled to last 14 weeks, until March 18, 2011.

Locks at McNary Dam will be closed five weeks beginning Feb. 6 and the locks at Bonneville Dam will be closed the first 18 days of March.

Normal barge traffic up and down the Columbia River will be interrupted during the three-month closure, including those that haul fuel upriver to terminals at Umatilla and Pasco, Wash.

Tidewater Barge Lines of Vancouver, Wash., uses 240-600 barge shipments annually to transport 12- to 15 million barrels of refined petroleum products on the Columbia River, said Deanna Henry, emergency preparedness manager for the Oregon Department of Energy. A barrel contains 42 gallons, so 12- to 15-million barrels equals 504- to 630-million gallons.

"This fuel supply and distribution system is considered fairly tight during normal conditions," Henry said. "As a result of the extended outage, Eastern Oregon communities can anticipate higher fuel prices and possible mild supply disruptions."

Carrie Gaines of Tidewater said her company has been working with fuel shippers since August 2009 to prepare for the lock closures. "We have done everything we can to provide for their needs and provide the assets we have," she said.

Henry said Tidewater plans to stage six barges containing 228,000 barrels of refined petroleum near the Pasco terminal before the lock closure.

"This fuel is expected to last up to three weeks," she said.

Gaines said Tidewater's upriver supply should last four to six weeks.

"It won't provide the amount of supply for normal consumption over this period of time," she said.

That leaves fuel dealers eight to 10 weeks of uncertainty.

A number of Tidewater's customers have made alternate plans to obtain fuel during the shipping interruption, she said. Some will ship fuel by rail, some by truck and others by pipeline.

Henry said the petroleum industry is working with refineries in western Washington; Billings, Mont.; Salt Lake City and northern California to acquire adequate fuel supplies for the region.

"Product normally transported by barge will shift to other transportation modes," she said. "The U.S. Coast Guard expects an increase of approximately 1,750 tanker truck shipments dispersed over several major highways during the … closure."

The four- to six-week supply Tidewater expects to have available in December and January does not include any of the resupply options the company is working on, Gaines said, so she couldn't estimate how helpful those resupply efforts will be.

Mike Heller of Heller & Sons' Distributing in Hermiston said he didn't think the distribution problems would trickle down to retail customers in December and January.

"February and March is when it's going to be critical," he said. "It depends on how supply gets. If supply gets tight, the prices are going to go up."

Potential winter weather-related road closures in the Columbia River Gorge also could be problematic for petroleum truckers, Heller said. Lengthy highway closures could exacerbate dwindling regional fuel supplies.

Richard "Dick" Devin of Devin Oil Co., Heppner, said his drivers will go to Portland for fuel, but he wouldn't know about prices until they pick up their loads.

"It's obviously going to be a lot of transportation," he said. "Our truck drivers are going to like the added income."

Dean Brickey
Gas Prices Likely to Spike in 2011
East Oregonian, November 18, 2010

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