BAF IN THE NEWS:
WHAM13
http://13wham.com/news/features/this-morning/stories/829-new-app-traffic-complaints-442.shtml
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WXIX-CIN FOX19 Morning News Extra
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NATIONAL NEWS:
National Journal: The Chairman Has No Driver!
http://www.nationaljournal.com/daily/the-chairman-has-no-driver-20130902
Wednesday could be a very interesting day for House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa. He is taking a 30-mile ride in a car that drives itself. The route from suburban Cranberry, Pa., to Pittsburgh International Airport includes multiple intersections, low-speed single-lane roads, and high-speed highway traffic with complex traffic lights.
Los Angeles Times: Across U.S., bridges crumble as repair funds fall short
http://www.latimes.com/nation/la-na-aging-bridges-20130904,0,4964515.story
SCHWENKSVILLE, Pa. — Engineers think that three of the bridges closest to Dave Wisler's home are about ready to collapse.
Washington Post: AP: World Economic Forum sees US rise in global competitiveness, but Europeans still top list
GENEVA — The United States’ competitiveness among global economies is rising again after four years of decline, though northern European countries continue to dominate the rankings published annually by the World Economic Forum.
New York Times: App for N.F.L. Players to Promote Safe Rides
The problem of players driving under the influence has long bedeviled the N.FL. and its 32 teams, costing players millions of dollars in fines and in one case last season, a player’s life.
Progressive Railroading: USDOT proposes rule to help expand transportation project delivery program to more states
The U.S. Department of Transportation (USDOT) is proposing a rule that would provide states an opportunity to manage the federally required environmental review process for rail, transit and highway projects.
Progressive Railroading: TIGER V grants on tap for six rail projects, congressmen say
Six freight- and passenger-rail projects will receive Transportation Investment Generating Economic Recovery V (TIGER V) grants from the U.S. Department of Transportation, a number of congressmen announced on Friday.
Railway Age: UP Arrowedge technology to debut this month
Union Pacific has formally unveiled its Arrowedge® employee-designed aerodynamic technology for fuel and locomotive emissions reductions for use on double-stack intermodal freight trains. UP expects to introduce the technology on intermodal service between Joliet, Ill., and Long Beach, Calif., this month.
StreetsBlog: Nine Days in September: Congress’s Chance to Break the Gridlock
http://dc.streetsblog.org/2013/09/03/nine-days-in-september-congresss-chance-to-break-the-gridlock/
What would a good authorization bill look like? We laid out some ideas in the spring. Another option would be to take a page from the Senate Commerce Committee’s playbook and pick up the rail title the committee wrote for MAP-21, which ended up on the cutting room floor. The freight rail industry is also interested in a new bill — one that reduces cargo rates, they hope
STATE NEWS:
New York Times: Thomas Menino Is a Cranberry-Juice-Drinking Workhorse
There’s an old maxim that politicians are either show horses or workhorses. After 20 years as mayor of Boston, you’ve won a reputation as a workhorse. What do you think the show horses can learn from the workhorses?
Atlanta Daily World: Atlanta to Receive $18 Million Grant for BeltLine
The City of Atlanta will receive an $18 million TIGER V grant from the U.S. Department of Transportation for the development of a 2.5-mile portion of the Atlanta BeltLine in the southwest corridor, Mayor Kasim Reed announced on Monday.
Charlotte Observer: Charlotte’s streetcar misses grant, suffers setback
The city of Charlotte’s effort to extend its planned streetcar line has suffered a setback, as the project was passed over for a much-needed federal grant.
Strong Towns: Setting Priorities at the DOT
http://www.strongtowns.org/journal/2013/9/4/setting-priorities-at-the-dot.html
Last week I was asked to privately comment on a priority ranking system being developed by a state DOT. After providing a (not flattering) critique of the proposed ranking system, I then offered my thoughts on how I would develop a ranking system.
Transportation Nation: New York's Bike Lobby Now Has a Mayoral Candidate
Bill de Blasio, who once applauded a move to halt a bike lane in Brooklyn, has won the endorsement of a prominent lobbying group that represents cycling advocates and other street safety concerns.
Washington Post: O’Malley to announce weekend MARC service between D.C. and Baltimore, starting Dec. 7
Weekend MARC train service between Washington and Baltimore, which has never been offered before, is set to begin on Dec. 7, Maryland Gov. Martin O’Malley (D) will announce Wednesday.
Washington Post: Long-anticipated new section of SF-Oakland Bay Bridge opens, handles first morning commute
The gleaming white and newly built $6.4 billion eastern span of the San Francisco-Oakland Bay Bridge handled its first morning commute Tuesday with few problems other than the traffic snarls that were common around the old span.
Dallas Business Journal: BNSF to spend $240M improving its Texas rail system
http://www.bizjournals.com/dallas/blog/morning_call/2013/09/bnsf-to-spend-240m-improving-its.html Fort Worth-based BNSF Railway Co. said it plans to invest an estimated $240 million on rail capacity expansion and maintenance this year in Texas.
Railway Age: Alaska Railroad seeks new president and CEO
The Alaska Railroad Corp. is looking for a new president and CEO and is accepting applications up until Sept. 27. The railroad’s seven-member board of directors says it’s seeking “a decisive leader with strong business experience in the transportation industry or an in-depth understanding of supply chain management. Experience working in the Alaska business community is preferred.”
Wall Street Journal: Is Keystone Doomed To Be a Historical Footnote?
By Ben Winkley
September 4, 2013
WHO NEEDS KEYSTONE, ANYWAY?
As 2013 rolls on from summer into fall there is still no end in sight to one of the great energy impasses of the year—will the Keystone XL pipeline ever be approved, or is it fated to become a historical footnote?
The pipe, in case you have forgotten, is planned to allow 830,000 barrels a day of heavy crude to move from Canada’s oil sands development all the way to refineries on America’s Gulf Coast.
Keystone needs approval from the State Department because it crosses the Canadian-U.S. border. The debate on whether it is a good idea or not has seemingly been endless and a decision may not now be made until 2014.
U.S. refiners increasingly doubt that Keystone will ever be built, The Wall Street Journal’s Ben Lefebvre reports. Only now, thanks to the expansion of other pipelines, the record amount of oil being produced in the U.S. and the rapid expansion of crude-by-rail, they don’t particularly care.
Which is all well and good for American refiners—and probably for these seven adorable species threatened by Keystone—but potentially ruinous for Canadian drillers.
Extracting Canada’s huge deposits of oil sands in the next few years might not be economically viable without Keystone XL. Oil-sands production capacity is predicted to more than double by 2030, to more than 5 million barrels a day—if Keystone doesn’t happen, output could exceed shipping capacity as soon as 2016.
This will mean that Canadian heavy crude will continue to trade at a steep discount to other grades of oil for the next few years, which could weigh on the economics of developing the oil sands.
So Canada hopes to build some pipes of its own—one all the way from Alberta to the Atlantic coast, and one to the Pacific. The former faces the challenge of scale; the latter of local opposition.
If Canada gets one or both of these off the ground, however, it could mean that Keystone turns out to be a lot of fuss over nothing. A lifeline could be thrown its way, though. The U.S. Federal Railroad Administration has begun an investigation into the business of moving hazardous materials—read: crude oil—on the tracks in light of the fatal accident in Quebec earlier in the year.
Any new safety measures or restrictions (say, on moving crude through residential areas) could increase the cost of moving oil-by-rail, and make that pipeline look a more attractive option once more.
INDIA BETWEEN A ROCK AND A HARD PLACE
India is considering a plan to reduce its ballooning current-account deficit that includes holding its oil imports from Iran steady, potentially putting the country in jeopardy of losing an exemption from U.S. sanctions against countries that do business with Iran.
The subcontinent is stuck between a rock and a hard place. Its currency, the rupee, has recently hit record lows against the U.S. dollar, making crude-oil imports much more expensive.
India imports more than three-quarters of the crude oil it requires, and the depreciating local currency would make those imports more expensive in rupee terms and add to the costs of government fuel subsidies.
India is turning to the Middle East, looking for deals. Oil exporters are eager to boost supplies to India to compensate for shrinking U.S. demand.
India and Iraq are working toward a 10-year oil-supply deal and the former may offer a stake in state-run India Oil Corp.’s planned refinery in the east of the country, the Journal’s Saurabh Chaturvedi and Biman Mukherji report.
Dealing with Iran will prove more contentious. India buys oil from the Islamic Republic by depositing rupees into a bank account, and then Iran imports Indian goods, potentially including food, drugs, consumer products and auto parts, debiting rupee amounts from the same account.
A bizarre ongoing dispute over an Indian oil tanker that was detained by Iran’s navy threatens to stall negotiations, but India may feel its need for fuel is greater than America’s need to squeeze Iran.
MARKETS
Crude oil prices were lower in London trading Wednesday, after retreating from a spike that followed security alerts in the Mediterranean Sea on Tuesday.
http://blogs.wsj.com/moneybeat/2013/09/04/is-keystone-doomed-to-be-a-historical-footnote/
E&E News: 'Bakken blitz' sets up battle between oil producers, shippers
By Elana Schor, E&E reporter
Tuesday, September 3, 2013
The Obama administration's launch of a crude-by-rail safety inspection push dubbed the "Bakken blitz" could open fault lines between freight operators and oil producers that have turned to the tracks to tote a record-high volume of flammable fuel.
The potential for tension centers on parallel safety concerns stemming from the fatal July 6 derailment in Quebec of a 73-car Bakken oil train; operator choices such as using one-person crews on freight trains carrying hazardous materials, now prohibited in Canada; and shipper responsibilities such as classifying crude to reflect chemical properties that could lead to more severe fires and damage in the event of an accidental release.
A month before the Federal Railroad Administration and Pipeline and Hazardous Materials Safety Administration kick-started their joint oil-train inspection operation, a senior FRA official pointed to possible tank car corrosion from hydraulic fracturing chemicals and warned of regulators' inability to detect widespread misclassification of fuel shipments.
"FRA can only speculate as to the number of crude oil shipments that are being made" in tank cars not covered by new industry standards for durability in the event of accidents, the agency's acting director of safety assurance wrote to the American Petroleum Institute on July 29.
On the operator side of the ledger, the Transportation Department's rail safety advisory council agreed at the same Thursday meeting that yielded news of the "blitz" to open a long-term inquiry into whether to change crew staffing practices and strengthen safeguards against the accidental movement of parked trains.
Referring to an emergency order issued after the Quebec disaster, FRA chief Joseph Szabo stated in remarks prepared for the advisory council meeting that "we need to discuss how to make these provisions permanent" (Greenwire, Aug. 29). He also said the agency plans to start publicly "tracking industry compliance" with both the emergency order and a nonbinding, stricter safety advisory.
Asked about the FRA-PHMSA inspection operation, API spokesman Eric Wohlschlegel underscored the importance of railroads properly handling hazardous oil-industry cargo.
"We are eager to assist the rail industry in its efforts to ensure that its systems, its standards and its operating procedures are followed to the highest degree of safety possible and in compliance with all federal regulations," Wohlschlegel said in an interview. "We understand that rail operators are re-examining their rail systems, brake equipment, personnel requirements and other areas, and we believe the federal government's efforts to enforce rail standards are critical to protecting the environment and human lives."
FRA declined a union petition to require two-person train crews in 2009, but Szabo recently rapped the president of the railroad involved in the Quebec disaster for adding a crewman to his Canadian trains but not his U.S. counterparts. Maine Democratic Reps. Chellie Pingree and Mike Michaud introduced legislation last month that would make solo crews illegal.
Association of American Railroads spokeswoman Holly Arthur said that the rail industry would postpone official comment on FRA's recommendations until the agency's advisory council completes its months-long work. "We certainly support what FRA and PHMSA are doing with their examination of the oil that is being shipped," Arthur said via email.
The audits that sparked the Bakken blitz began before March, when regulators began formally planning the inspection push, an FRA spokesman said in an interview. While sampling of crude oil cargo by shippers and proper behavior by operators are both under the microscope, it remains unclear whether one end of the supply chain is set to be examined more closely than another.
Faulting the 'groceries'?
As oil shippers publicly look to operator behavior and rail operators publicly look to the crude cargo in the wake of the Quebec derailment, the prospect of two ends of the fuel supply chain butting heads over the response becomes more palpable.
"I find it really ironic that you have operating systems, braking systems, all of the other rail systems involved, and regulators are scrutinizing hydraulic fracturing fluid without providing data to support the move," said an oil industry source tracking the inspection blitz who spoke candidly on condition of anonymity. "Why are they going to fracking fluid? It's like blaming a car accident on the fact that there were groceries in the trunk."
At issue in FRA's scrutiny of fracturing fluid, the industry source said, is the potential appearance of deflecting rail operators' responsibility for the prevention of accidental releases onto shippers of Bakken crude.
The federal agencies' push to ensure proper classification of fuel cargo likely would not raise significant questions among crude shippers if it came in the context of a broader internal inquiry among rail operators themselves, the source added.
FRA outlined the risk of misclassified shale oil running the rails out of the Bakken in its Aug. 7 safety advisory, issued with PHMSA. Federal hazmat regulations allow liquid cargo such as crude oils "that do not meet the definition of any other hazard class to be reclassified as a combustible liquid," the agencies stated, which in turn would exempt that cargo from certain rules for handling dangerous materials, to include the requirement that the material be "transported in a DOT-specification" railcar, the agencies added.
Even when oil is shipped in DOT-specification cars, heightened danger in the event of a crash remains a major concern after the Quebec disaster for investigators on both sides of the border. PHMSA remains nearly a year behind schedule on its announcement of a proposed rule to strengthen safety standards for the DOT-111 tank car involved in the blast, a type of car that the National Transportation Safety Board and its Canadian equivalent have linked to a higher risk of rupture during accidents (EnergyWire, July 10).
The Transportation Safety Board of Canada continues to look at whether the composition of the Bakken crude that spilled in the Quebec town of Lac-Mégantic played a role in the intense nature of the resulting fire. "It was shipped as a Class 3, Packing Group 3 flammable liquid, and some of the fire characteristics" didn't align with that category, Donald Ross, the board's lead investigator in Lac-Mégantic, told Reuters last month.
Class 3 hazardous materials have a higher flashpoint than those in Classes 1 and 2, considered more dangerous and closely regulated under federal rules. Oil is historically considered a Class 3 material, though regulators have noted that excess hydrogen sulfide in sour crudes could add to the flammability and toxicity risks that typically keep the fuel in the lowest category.
Hydrogen sulfide found in light Bakken crude sparked a summertime tussle before the Federal Energy Regulatory Commission between pipeline operator Enbridge Inc. and some of its shippers (EnergyWire, May 30).
http://www.eenews.net/stories/1059986607
Politico Morning Transportation
By Adam Snider | 9/4/13 5:50 AM EDT
HAPPENING TODAY — This chairman doesn’t need a driver: House T&I Chairman Bill Shuster is hitching a ride to Pittsburgh International Airport today. Pennsylvania DOT Secretary Barry Schoch is catching a ride, too, but what’s notable is who won’t be in the car: a driver. The two will be taking a 3o-mile ride in Carnegie Mellon University’s driverless 2011 Cadillac SRX, going from the Pittsburgh suburb of Cranberry to the airport. The drive might be routine for a person, but the “multi-lane, high-speed highway traffic with complex traffic lights as well as low-speed, single lane connecting roads and multiple intersections” is pretty impressive for an autonomous car. Once at the airport, the duo and other officials will talk to reporters about the future of driverless cars. The school has kindly provided live GPS tracking and video of today’s event; the car leaves at 11 a.m.: http://bit.ly/15UCoR3
LaHOOD STILL WORKING ON DISTRACTED DRIVING: Former Transportation Secretary Ray LaHood might have left DOT two months ago, but he’s still working to build support for a national law against distracted driving. “I strongly favor a national law and hope to work in whatever way possible to get a substantial bill passed...I am still talking to different distracted driving organizations about how we can be involved,” LaHood wrote to MT in an email. While a vast majority of states have distracted driving laws on the books, a recent AAA study showed that Americans are less worried about inattentive drivers than they were a few years ago. LaHood’s calls for a national distracted driving law go back to last year, when he said a nationwide ban would be a “good next step” and that he would “try to get Congress to do that.” Current Secretary Anthony Foxx has said the AAA study shows that much work on the issue remains — but he believes the final decision should be up to states, many of which already have hefty penalties for being caught texting while driving.
What’s next? LaHood already has a few new gigs, but that doesn’t mean he’s stopping there. He told MT he’s “still spending lots of time with grandchildren in Peoria” but is also “talking to a number of people” about his “next chapter.”
WEDNESDAY, SEPTEMBER 4. Thanks for reading POLITICO’s Morning Transportation, your daily tipsheet on trains, planes and automobiles, where today we’re celebrating — but Ford is likely mourning — the 56th birthday of the ill-fated Edsel being delivered to auto showrooms. The History Channel’s write-up says a number Americans thought it was “a symbol of corporate hubris at its worst: it was an over-hyped, over-sized, over-designed monstrosity” (http://bit.ly/1agyHJy). Please be in touch: asnider@politico.com. And follow on Twitter: @AdamKSnider and @POLITICOPro.
“Both feet on the floor, two hands on the wheel …” http://bit.ly/1fvEeJk (h/t Justin Harclerode)
GAS PRICES AND SYRIA — Much ado about nothing? The unrest in Syria and possible military action have yet to make a major dent on gas prices here in the U.S., Pro Energy colleague Darren Goode reports. “This might be much ado about nothing really,” said Patrick DeHaan, senior petroleum analyst for GasBuddy.com. Syria was only the 34th largest oil producer in 2011, according to CIA data, so its impact on the global supply-demand balance is likely to be limited. But fears of rising tensions in the Middle East almost always lift crude oil prices, if only for short periods. Two years ago, the Arab Spring and a civil war that boiled over in Libya drove crude oil prices higher and pushed gasoline up to nearly $4 a gallon, and eventually led to the Obama administration to tap the Strategic Petroleum Reserve. Darren’s story has more: http://politico.pro/15WiSU7
WE’LL GET BACK TO YOU: A DOT official tells MT that the department will “respond directly” to Rep. Richard Hanna’s letter on the new trucker hours-of-service rules and FMCSA’s study on the issue. Hanna brought together a bipartisan coalition of 51 House members who wrote (http://politico.pro/17wgxzT) Secretary Foxx wanting to know when exactly a required study would be filed. Another DOT official noted to MT that the report itself isn’t actually due until the end of September — the field study portion was due earlier this year, but MAP-21 gave DOT six months to analyze the data and crank out the final report.
GARDEN STATE TRANSPO WOES: A primer on New Jersey’s Transportation Trust Fund points to a problem facing a number of states: How to pay for increased project costs in tight budget times. NJ Spotlight writes that “an almost total reliance on bonding and borrowing for transportation projects has exacerbated New Jersey’s state tax-supported debt burden, which was already among the heaviest in the nation.” And Gov. Chris Christie is to blame for the mounting debt, according to the site: “New Jersey ended up borrowing 97.4 percent of all transportation capital costs in the first four years of the Christie administration — a higher percentage and higher dollar amount than any previous four years.” http://bit.ly/15BbOId
LAWYERS IN COLGAN CASE WIN ACCESS: Ahead of a March 2014 wrongful death trial over the 2009 Colgan Air crash, a judge has ruled that the plaintiffs can see an internal safety report and interview a retired FAA safety inspector who had voiced concerns with the carrier before the crash. Colgan and its parent company, Pinnacle Airlines, had fought against both motions. The AP has more: http://abcn.ws/17psMtK
COYOTES OF INDIANA: It’s not as catchy as Warren Zevon’s “Werewolves of London.” But officials at an Indiana airport are now shooting coyotes on the airport grounds after two years of trapping didn’t nab a single canine. The animals have caused two aborted landings and one plane taking off missed a coyote by 20 feet. AP: http://bit.ly/17pvL5C
ISN’T IT FAIR, NORWEGIAN AIR? Norwegian Air Shuttle will set up shop in New York and Fort Lauderdale, Fla., in an expansion of the U.S. services thanks to a huge order of new planes that includes Boeing’s 787 Dreamliner. Reuters has more: http://reut.rs/1762TTh
PI THEFT — Waze inks Sisu: Makers of the traffic and navigation app Waze have signed their first lobbyist: Sisu Strategies. The app, voted best overall mobile app in by Global Mobile Awards in 2013, allows users to share live traffic updates while driving to create a network of time-saving maps. Firm President Audrey Jones will lobby for Sisu on issues related to software and traffic safety.
THE AUTOBAHN (SPEED READ)
- Out on a morning coffee run, Chicago Mayor Rahm Emanuel heard an accident and stayed with an injured bicyclist until the ambulance arrived. Trib: http://trib.in/1dF0ynf
- Maglev train in Japan sets new speed record of 310 mph. Grist: http://bit.ly/14p1Z0T
- Illinois DOT, Union Pacific Railroad begin second phase of work on Chicago-St. Louis train route. Amtrak release: http://bit.ly/17x98QD
- Honda is working on a way to notify drivers of nearby pedestrians by using the walkers’ smartphones. Wired: http://bit.ly/1eby2Iw
- BWI Airport beat out Dulles as the region’s busiest passenger hub in 2012. WaPo: http://wapo.st/15qk4f1
- Shutting down a bus company isn’t as easy as it might seem — a look at New York. Bloomberg: http://bloom.bg/19fIMC5
THE DAY AHEAD: 9 a.m. — DOT, NHTSA hold the 21st public meeting of the Crash Injury Research and Engineering Network, which conducts research on crashes and injuries at six Level I Trauma Centers across the United States. DOT, 1200 New Jersey Ave. SE.
11 a.m. — Carnegie Mellon University hosts T&I Chairman Shuster on a 30-mile highway trip in a driverless car from Cranberry, Pa., to Pittsburgh International Airport.
2 p.m. — Maryland Gov. Martin O'Malley makes a Baltimore region transportation announcement. West Baltimore MARC Station, 457 North Smallwood Street, Baltimore, Md.
THE COUNTDOWN: DOT funding and passenger rail policy both run out in 27 days. Surface transportation policy is up in 392 days and FAA policy in 757 days. The mid-term elections are in 426 days.
CABOOSE — Robbed: An MT source passed along word that the Sun Trust Bank branch right near DOT got robbed yesterday at lunchtime (http://on.wusa9.com/1fx2jiW). After your host joked that maybe it was Ray LaHood back in D.C. needing a few more dollars, the source came right back with the joke of the day: “Campaigns for a national distracted driving law don’t fund themselves!” MT can’t write that story but kindly asks The Onion to get on it.
Politico Pro: U.S. gas prices may shrug off Syria fears
By Darren Goode | 9/3/13 5:47 PM EDT
As the Obama administration pushes for a military strike against Syria, energy experts are keeping their fingers crossed that U.S. motorists may avoid getting hit at the pump.
So far, gasoline prices have been mostly stable — despite jumpiness in crude oil markets and the threat of U.S. military action in Syria escalating tensions in the oil-rich Middle East and North Africa — mostly because of robust domestic oil supply and declining seasonal demand from drivers.
“This might be much ado about nothing really,” said Patrick DeHaan, senior petroleum analyst for GasBuddy.com, referring to the Syria price worries.
Syria was only the 34th largest oil producer in 2011, according to CIA data, so its impact on the global supply-demand balance is likely to be limited, although fears of rising tensions in the Middle East almost always lift crude oil prices, if only for short periods.
Two years ago, the Arab Spring and a civil war that boiled over in Libya drove crude oil prices higher and pushed gasoline up to nearly $4 a gallon, and eventually led to the Obama administration to tap the Strategic Petroleum Reserve.
“The biggest difference here is this is coming towards the close of the summer driving season while those other events took place as we approached the summer driving season [when] it doesn’t take a whole lot to spook the market,” DeHaan said.
U.S. gasoline prices averaged $3.59 a gallon Tuesday, just a couple of weeks before refiners typically begin their seasonal switch over to a less expensive winter blend on Sept. 15, according to AAA.
Gasoline prices have fallen in September in four of the past five years, AAA said, with pump prices shedding an average of 8 cents per gallon. But the group wouldn’t predict whether a decline would occur this year.
“Escalating tensions in the Middle East and North Africa, possible U.S. action in Syria or a major hurricane could make it more expensive to buy gas, while a relatively calm month should send prices much lower,” said Avery Ash, AAA’s manager of regulatory affairs.
Gasoline prices are little changed since the start of August, when regular gasoline averaged $3.63 a gallon, even though U.S. crude has remained above $100 a barrel since the Egyptian military ousted President Mohammed Morsi in July.
So far, retail gasoline prices have been steady, mostly because of flat demand and inventories that are 8 percent higher than a year ago, Ash said.
U.S. refineries are able to tap into a stable supply of domestic oil from the growing production at fields in North Dakota and south Texas, and the EIA has also predicted that 2013 gasoline demand will drop to its lowest mark in a dozen years, at around 8.66 million barrels a day.
The price of West Texas Intermediate was below $108 a barrel Tuesday, while international Brent hovered at about $114 a barrel. Those prices could move even higher as the industry looks to the Gulf of Mexico as the busiest part of hurricane season looms.
The market’s nervousness was evident in the quick spike Tuesday that sent Brent up nearly $1 a barrel in less than four minutes and WTI up 50 cents after reports that two missiles had been fired in the eastern Mediterranean Sea, the Wall Street Journal reported.
Prices quickly returned to earlier levels after it was reported the missiles had been detected several hours before. There was no official verification of a launch, and Russian news agencies later reported the missiles landed in the sea.
Charles Drevna, president of the American Fuel & Petrochemical Manufacturers, said the group had “guarded optimism” that oil supplies would remain ample.
“But given the current situation, I would be really negligent to predict anything until we see what transpires, if anything, in the Middle East,” he said.
And there is some optimism that U.S. gasoline prices won’t see a jump, since Syria’s impact on U.S. oil supplies is far more limited than countries such as Egypt and Libya.
The U.S. hasn’t imported any oil from Syria in nearly two years because of the economic sanctions imposed on the the country, and it has not historically been a major supplier to the U.S. In September 2011, the last month of imports, the U.S. got 641,000 barrels of oil from Syria, just 0.19 percent of the 338 million barrels imported that month, according to EIA data.
Syria produced less than 400,000 barrels per day before the civil war, and it exported about 150,000 bpd, mostly to Europe and Turkey. Currently, its production is estimated at about 50,000 bpd.
That’s a far cry from the 1.5 million barrels per day that were pulled off the market when Libya’s civil war flared, sending Brent up $15 per barrel and U.S. gasoline prices to a high at $3.96 a gallon in mid-May 2011.
And Syria’s impact on oil economics is less than Egypt’s, which also does not produce much oil but is a major transit route for supplies between the Mediterranean and producers in the Middle East.
After peaking in February at $3.79 a gallon, U.S. motorists have enjoyed lower prices for most of the year compared to last year. Gasoline reached a summertime peak of $3.68 a gallon July 22 and fell to $3.55 a gallon Aug. 26, 19 cents below a year ago.
Tom Kloza, chief oil analyst for GasBuddy.com, said the trucking industry could face a bigger risk than motorists if diesel prices are pushed higher for a long period of time. Those higher shipping costs would eventually be passed on to consumers.
“What people aren’t realizing and aren’t talking about are that there’s some stealth increases,” Kloza said, citing also the threat to heating oil and jet fuel prices.
Diesel fuel averaged about $3.92 a gallon Tuesday — not unusual for this time of year, but Kloza fears a sustained high price if the Syria tensions grow.
BAF IN THE NEWS:
WHAM13
http://13wham.com/news/features/this-morning/stories/829-new-app-traffic-complaints-442.shtml