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Prep the pumps: Gas stations brace for next Sandy

Tuesday, 29 Oct 2013 | 2:27 PM ET
In the aftermath of Superstorm Sandy, patrons wait in line for gas in Seaford, N.Y.
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In the aftermath of Superstorm Sandy, patrons wait in line for gas in Seaford, N.Y.

One year after Superstorm Sandy wreaked havoc on East Coast power supplies and immobilized countless gas stations, many consumers are wondering whether they'll be able to fuel up if another storm of Sandy's magnitude hits again.

In parts of New York and New Jersey, where Sandy packed the most punch, motorists recall how difficult it was to find open gas stations—and how to survive their lines even if they did. In New Jersey, drivers were asked to comply with alternate license plate fueling, an emergency provision put into place by Gov. Chris Christie to help ration limited gasoline supplies.

The problems at the pump were many: Power outages across the East left stations without backup power generators unable to operate to dispense the supplies that they had on hand; power issues and flooding at major refineries crimped supply from getting to stations at all. Even further complicating matters, the Colonial Pipeline system, the region's main conduit for the transport of fuel supplies, couldn't pump from its Linden, N.J., fueling station.

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States and municipalities still coping with $65 billion in property damage have been taking measures since the superstorm to try to address some of the tangential problems like fuel shortages that arose during Sandy.

In New Jersey, the Christie administration last Monday announced $7 million in grants that would give retail fuel stations on and near evacuation routes faster and more reliable access to backup power in the event of an energy emergency.

Currently all 22 gas stations on the Garden State Parkway, the New Jersey Turnpike and the Atlantic City Expressway are equipped with backup power for outages. Under this new program, more stations within a quarter mile of key evacuation routes across the state would benefit from quicker access to backup energy.

What caused the shortages last time? The refineries

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"We learned firsthand during Superstorm Sandy that a reliable fuel supply is critical in a disaster to support essential facilities and emergency response operations," Gov. Christie said in a statement. "By enabling gas stations to stay open in the event of a disaster, the State will be better prepared."

While the initiative is a step in the right direction, critics contend that $7 million offered to roughly 250 stations, or less than 10 percent of New Jersey's fueling points, seems insufficient.

"This program is going to help. Is this going to alleviate the problem we had a year ago? The answer to that is 'no,' " said Sal Risalvato, executive director of the New Jersey Gasoline, C-Store, and Automotive Association.

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"I keep telling people, even if we had backup generators prior to Sandy, we would have had the same experience with long gas lines because the problem wasn't power and electric generation. The problem was receiving gasoline deliveries," Risalvato said.

"We had many gasoline facilities that had their power restored rather quickly ... [h]owever, after their power was restored, they quickly ran out of inventory and sat for as long as another week before receiving a gasoline delivery."

And the problem with gasoline deliveries goes back to the source: East Coast refineries.

The Phillips 66 Bayway Refinery in New Jersey was just one that was affected by Sandy. The facility was hit by a 14-foot storm surge and was without power and steam immediately after the storm's landfall.

Power was restored to the refinery and its Linden, N.J., fuel terminal two days after the storm, but it still took time to get operations up and running smoothly.

"We made it a priority to reopen the terminal and resume supplying our customers as quickly as possible," said Dean Acosta of Phillips 66. "We had adequate supplies of fuel on hand, and made arrangements with third-party pipeline and marine transport providers to ensure fuel supplies would continue to be delivered to the terminal until the refinery returned to operation."

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But it took nearly a month for the refinery to become functional; the flooding caused damage that had to be corrected by Phillips 66 employees and contractors, including more than 100 employees brought in from other locations—many of them from Phillips 66's Gulf Coast refineries with hurricane recovery expertise.

"After every storm, we review and update hurricane response plans based on lessons learned," added Acosta. "We've also made some physical improvements to the Bayway Refinery to help better withstand future major storm events, such as elevating electrical equipment. We installed critical control buildings and electrical systems above the 100-year flood plain in order to minimize future damage at our Linden fuel terminal."

So a year later, is the area better prepared?

"We're definitely better prepared," Risalvato said. "I can tell you that the administration has made preparations to get emergency gasoline delivered to New Jersey retailers from out of state. They've eased some of the trucking requirements and put things in place rather quickly, whereas during Sandy there was a process that caused some delay."

—By CNBC's Jackie DeAngelis. Follow her on Twitter @JackieDeAngelis.

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