ANTIESTABLISHMENTARIAN

This one is different.

For years I have written articles about how to prepare for hurricanes, but this year the storm risk goes far beyond wrecking your home or boat. Perhaps an even greater fear is a Category four or five storm tearing through the Gulf oil fields and coastal refineries. Katrina was bad, but it could have been worse. An Andrew type storm, heading generally east to west could wipe out most of our petroleum industry, unlike Katrina which was a north-south storm.

Be aware that not only are the above mentioned facilities in danger, but nearly half the nations oil enters by way of Gulf ports, meaning that not only could domestic production be shut down, but a large amount of import facilities as well. In other words, we could be hit with a loss of perhaps 60% of our fuel supply. I hardly need explain what that would be like. Equally appalling is the fact that our government is completely unprepared for such an event. Oh, sure, there is the strategic oil reserve, but you can be that there is no plan for how to distribute this oil to refineries around the nation. Nor is it comforting to know that the reserve’s locations are in a hurricane zones, two in Texas and two in Louisiana.

Those of us who’ve been through hurricanes know very well that in the affected zone, supplies of gasoline disappear in a heart beat. Hoarding begins days before the storm arrives so that by the time it passes all the gasoline is gone. Even if it isn’t, there’s usually no electricity to power the pumps to pump gas. Therefore, smart folks stock up well in advance. Otherwise, fuel supplies usually return to normal within a week or two after the storm.

This year, however, hurricane caused fuel shortages would affect even people who don’t live in hurricane zones. We should be mindful of what Katrina did to both Gulf oil production and shoreside refineries. With over 10% of fuel production knocked out, fuel prices skyrocketed and there were shortages that lasted much longer than usual. Expect the next hurricane to cause far greater disruptions as the result of a very tight world oil supply. Our overall system is materially weakened and more vulnerable now than ever.

Because we have reached or are reaching peak oil, there is no cushion between supply and demand. That means that if we think the price spikes from Katrina were bad, well, we haven’t seen anything yet. Back then, we complained when gas rose well over $2.00/gallon to as high as $3.25; it seemed like the end of the world – at least from the standpoint of all the howling going on.

If a bad storm enters the Gulf we shouldn’t be surprised to oil rocket to $200 or more and take wholesale gasoline along with it. That means we could see gas at $5 to $5.50 virtually overnight. Imagine $225 to fill your tank!

Our government won’t tell you this but I will: from August through October we need to be prepared to deal with as much as two months (not two weeks) of supply disruptions and shortages.

This year it will pay more than ever to stock up early. Buy a few five gallon plastic cans and fill them up. I keep what is now a permanent strategic reserve in my storage shed. Since gas is only good for about six months, I have to rotate it by putting it in my gas guzzling SUV and refilling the cans periodically. Make sure you buy cans with good spouts as it is awfully difficult to fill up your vehicle otherwise. The purpose of this is so you don’t get caught short; it gives you a bit more cushion in the event that there is no gas for weeks.

Here’s what can happen: After a storm, you used about a half tank of fuel in a week, just driving around doing this and that. The power is still not on, you don’t know when it will be on, and so you decide to go in search of fuel. But there isn’t any to be had and now you’ve just burned up the last of your gas trying to find some. That’s the way it happens. Been there, done that! An extra ten or twenty gallons will allow you to sit tight, hopefully until things begin to normalize.

Its not a good idea to store the gas in your garage if you don’t have a storage shed. Better to leave them outside and put a tarp over the cans, somewhere out of the sun. You can be sure that water will leak into the cans if you don’t cover them.

If you’ve got a generator, you need a lot of fuel, too much for portable cans. In this case its a good idea to buy a clean steel drum and a hand pump. Look in Yellow Pages under barrels. No doubt your local zoning prohibits this, but then . . . . regulations are made to be broken.

Another point, credit card purchases of gasoline are becoming increasingly unwelcome. In addition to a stash of gasoline, its a good idea to keep extra cash on hand.