The images of Sandy that are dominating the airwaves have morphed from darkened skylines and flooded subway tracks into a new kind of menace: long lines. From commuters waiting for buses that never come to drivers stuck on bridge exit ramps and clogged streets. But the most persistent images of the day are pictures that hearken back to the disastrous economic troubles of the 1970s: Cars waiting on endless lines for gasoline.
Unlike the usual problems seen when storms hit along the Gulf of Mexico, oil drilling and gas refineries were largely unscathed by Hurricane Sandy. But much like the "perfect storm" itself, Sandy created another perfect storm of events that crippled the gasoline infrastructure of the region. The problem is most evident in New Jersey, where highways play a greater role in the community and coastline businesses were hardest hit.
Why can't gas stations keep up with demand? Here are some of the reason:
- Lack of working public transportation forces people to drive more.
- Heavy traffic means cars use more gas to get where they are going.
- Lack of electricity means more homes and businesses are relying on gasoline-powered generators.
- Those business include gas stations that can't open due to power outages or flooding.
- Fewer stations means more customers at those that are open.
- When people do reach the pump, they buy way more gas than they normally would.
- Gasoline distribution centers, which replenish the tanks at local stations, were also knocked offline. (They tend to be near coastlines and other transportation hubs.)
- Railroads and streets are blocked or damaged, which means new supplies can't be delivered from the distribution centers that are working to local stations.
- Ports are closed, which means more fuel can't make it to the region.
Each one of these issues by itself might make just a small dent in the supply and demand of gasoline, but when they all combine together it brings the whole system to a halt. The gas is out there, but it can't move around. One gas station closes and that puts a strain on others to keep up. The others run out of fuel more quickly, new deliveries aren't made, and soon the whole thing becomes a standstill. CNBC estimates that more than 80 percent of all New Jersey gas stations are currently closed and about half of New York City's.
As repairs are made and electricity is restored, the system (like everything else) will start to right itself. The good news is that gas lines have been mostly orderly and calm, but that levelheadedness won't last forever. People are getting impatient. Also, price is not a concern, because station owners are very conscious of laws against price gouging. However, a few pundits, like Matthew Yglesias, are arguing that we should be allowing "price gouging" because the market could help take care of this problem if only we would let it. It's a logical defense, but one that's hard to make when families with destroyed homes are paying $6 for a gallon of fuel.