Hurricane Harvey Disrupts Auto Fuel Supply Line

Hurricane Harvey is behind us.  But the aftermath will be felt in Houston and surrounds for quite a while.

Even though Austin didn't get much of this storm, it was a good lesson in scarcity and the herd mentality.

Just-in-Time Doesn’t Guarantee Reliability

You see, many of our supply chains are now Just-in-Time.  And though that promotes improved quality of product and efficient pricing, it doesn’t always translate into a resilient supply chain.

Case in point: There was fuel aplenty in Austin and surrounds throughout the storm.  Within two days after, we began observing lines at gasoline stations.

Why?  When citizens heard that refineries had shut down and some would be delayed coming back online, most people went out and filled up their autos.  Then, when they used a quarter tank, they topped off.  So you had whole towns and cities of drivers who typically drove around on a quarter tank of fuel, filling and maintaining full tanks.

The gasoline supply chain, however, was optimized for non-scarcity.  So the service stations and distributors could not keep up with the new demand level.  Thus, yellow nozzle bags and lines for gasoline.

Diesel vs. Gasoline

This situation soon rectified itself. However, the shortage gave a relatively pain-free lesson:  While stations soon ran out of gasoline, most diesel pumps remained open.  Why? Diesel isn’t as widely used in passenger cars here in the US, so diesel availability remained good.

So when comes to choosing the fuel source of your backup power supply, consider carefully the potential availability during a national disaster. While there are no guarantees that diesel fuel will be available, the competition for a scarce motor fuel may be lower.