To: Governor DaugaardFrom: Jason GlodtDate: June 22, 2012RE: Request for Executive Order for Hours of ServiceWaiver to address Fuel Shortages
I have been informed by the Petroleum Marketers Association that they are experiencing fuel shortagesand outages across South Dakota and the region. South Dakota has historically experienced fuel
shortages during summer months when demand increases with the “driving season”.
However, slightdisruptions or changes in supply have the potential for fuel shortages in SD since we are at the end of the supply line. We do not yet know the specific reason for the outages. However, an energy updatefrom Growmark Energy Risk Management states:
“ We have record high Crude oil inventories and refi
neries are running normal levels, but ourgasoline and diesel inventories are well below the 5 year average. The Magellan and Nustarsytems are experiencing outages and allocations in Kansas, Nebraska, South Dakota, and Iowa
We are still researching the issue to determine the reason for the decreased inventories. One plausiblereason may be a significant increase in fuel demand.Due to the lack of available gasoline supply in South Dakota and the region, suppliers are now forced totravel further distances to obtain fuel. As a result, petroleum marketers have requested an ExecutiveOrder for an Hours of Service waiver to avoid fuel outages as has been done in the past. I have attachedan Executive Order for your consideration. The Order would expire July 9
, however, you can extend itbeyond that date if necessary.South Dakota is at the very end of the fuel pipeline systems that supply our state. There are seventerminals located on the east river pipelines which are supplied by refineries from the central andsouthern US. Nustar has five terminals on a pipeline and Magellan has two terminals on differentpipelines. There is one west river terminal on a different pipeline which is operated by Rocky MountainPipeline and supplied by Rocky Mountain refineries that only supply 85 octane gasoline.
Outage Reports for 6/22/12Nustar
Terminal Supply Status Next Received
Out of unleaded gas
morning of 6/25/12
Mitchell Out of unleaded gas; Out of diesel morning of 6/25/12
Yankton Low on unleaded ?Wolsey Low on unleaded; Out of diesel ? - shortages will continue until FallAberdeen Out of unleaded; Out of diesel morning of 6/25/12