Friday, June 4, 1999

Experts: Y2K
won’t drain
isle gas pumps

Nevertheless, a surge by
panicky drivers may cause
a short-term problem

By Christine Donnelly


Millennium special The so-called "Y2K bug" should not cause gas shortages in Hawaii or the rest of the nation as the New Year rolls around -- but panicky motorists topping off their tanks en masse or storing gas at home might, oil industry representatives say.

"Consumers need to know we are well-prepared, we've been at work for years to ensure that Jan. 1, 2000, is just like any other business day," said Susan Hahn, spokeswoman for the Washington-based American Petroleum Institute, in a telephone interview this week.

"Get the facts. Don't rely on rumors or outdated information. Otherwise, how people react could end up causing a problem that would not have existed otherwise."

Spokesmen for Chevron and Tesoro, two oil companies with refineries in Hawaii, echoed that sentiment, saying there should be no major disruptions to the supply of gasoline, jet fuel, diesel, propane and other petroleum products.

But some outside observers are more skeptical, including the U.S. General Accounting Office, which in a recent report warned that a quarter of the U.S. oil industry was behind schedule in Y2K preparedness, and that some foreign suppliers were even farther behind. (According to state statistics, about 70 percent of the crude oil consumed in Hawaii in 1997 originated outside the United States, mainly Indonesia, Australia, China, Korea and Vietnam.)

Industry representatives countered that the GAO report was outdated and that virtually all major U.S. producers would be ready in time. Even if some foreign supply sources are temporarily disrupted, U.S. oil companies should have plenty in reserve, they said.

But if consumers panic and rush the pumps on New Year's Eve, that alone could create the long lines, shortages and other problems the industry has worked long to avoid, said John Tantlinger, an energy planner at Hawaii's Department of Business, Economic Development & Tourism.

"Our general conclusion at DBEDT, even considering the (GAO) report, is that Hawaii's energy system is reliable and will continue to be reliable," said Tantlinger, a member of Hawaii's Energy Council, whose members are from the oil, gas and electric industries, and state and county governments.

Tantlinger noted that oil companies in Hawaii would likely increase storage before the New Year and if those reserves ran low, the state was guaranteed access to the U.S. reserve of oil on the mainland.

Hawaii motorists with a half-tank of gas or more in their cars on New Year's Eve "should be just fine," Tantlinger said, echoing the Energy Council's recommendation. "You don't need to go out every day to fill it to the rim."

However, Michael Otten, a financial analyst for Florida-based Weiss Ratings Inc., which rates companies' Y2K readiness for investors, said it was only natural consumers would top off their tanks around New Year's Eve.

"If the oil industry is really ready, they have to do a better job of communicating that and proving it to the average guy who isn't going to take any chances," Otten said.

Among the nation's 100 largest nonfinancial companies, Weiss rated the oil companies Atlantic Richfield Co., Exxon, Mobil and Phillips Petroleum Co. average in Y2K readiness and Chevron and Texaco below average. Tesoro was not large enough to be rated.

Albert Chee, Chevron's public affairs manager in Hawaii, said all critical Chevron outlets in Hawaii -- including the refinery, distribution centers and gas stations -- would be fully Y2K compliant by September. "Everyone is working along and on schedule and feeling very confident," he said. Tesoro spokesman Nathan Hokama was equally optimistic. "Planning for the worst-case scenarios is part of the job, but we're really expecting it to be business as usual."

The so-called Y2K or millennium bug stems from the inability of some older computer hardware, software and microprocessors to decipher dated the year 2000.

Frequently asked questions

The Year 2000 problem is especially complex in the oil industry, which must juggle customer worries, safety and environmental concerns, and supply questions. Here are the industry's responses to some frequently asked questions. The answers came from the American Petroleum Institute, or Chevron or Tesoro in Hawaii.

QUESTION: Will there be a gasoline shortage because of Y2K?

ANSWER: People in Hawaii and the rest of the United States should expect few, if any, shortages.

Q: Will gas stations be open on Dec. 31 and Jan. 1?

A: Yes, only those outlets normally closed for a holiday won't open.

Q: Will the price of gas go up the closer we get to Jan. 1?

A: Impossible to say yet. "I don't think anybody knows the answer to that question right now," said Nathan Hokama, spokesman for Tesoro Hawaii.

Q: Will there be gas lines such as in the 1970s?

A: That's highly unlikely. The gas lines of the 1970s resulted from government-mandated price controls and rationing, not a shortage of gasoline. However, increased demand driven by Y2K fears could lead to long lines at stations and some distribution problems.

Q: Will the gas pumps keep working?

A: The pumps themselves are not considered susceptible to the Y2K bug, but if there are electrical power outages that could affect their operation. And computers could have problems with some credit card purchases. But those problems are not expected to be widespread.

Q: Are there any plans to ration fuel?

A: The oil and gas industry has no such plans.

Q: What if the refineries at Campbell Industrial Park have to shut down?

A: That's very unlikely, since millions of dollars and several years have been spent to ensure their computer systems are OK. Plus, the refineries have their own co-generators to supply electricity in case of power failures outside the companies' control.

Q: Do oil and gas pipelines have embedded microchips susceptible to the Y2K bug?

A: Yes, but the companies that operate those pipelines have done extensive testing and fixing of those built-in chips.

Q: Is it safe to store gas at home?

A: The industry does not recommend it, citing the risk of fire and explosion.

Christine Donnelly, Star-Bulletin

Y2K bug concerns
neighbors of
industrial park

By Christine Donnelly


Since so many companies at Campbell Industrial Park house toxic chemicals, residential neighbors of the Kapolei complex want to know what's being done to prevent the so-called "Y2K bug" from causing hazardous accidents.

Nearby residents are especially concerned about accidental air pollution emissions from the industrial park, which houses two highly computerized oil refineries along with many other smaller companies that use toxic chemicals.

Among those present are ammonia, chlorine, carbon dioxide, hydrogen sulfide and sulfur dioxide, according to the park's emergency management plan. Pipelines run through the area, carrying volatile liquids near major roads.

According to the U.S. Chemical Safety and Hazard Investigation Board, small- and medium-sized companies nationwide run a greater risk of accidents because they lack the resources of larger companies to combat the bug.

"We want to be sure that pollution control is under control and not out of control" when the New Year arrives, said Maeda Timson, chairwoman of the Makakilo-Kapolei-Honokai Hale Neighborhood Board.

At the board's request, air quality scientist Helen Mary Wessel, the state Health Department's compliance coordinator for Campbell Industrial Park, is surveying the Y2K risks of about 25 of the roughly 140 businesses there.

"I don't care so much about whether computers keeping their books are OK," she said. "What I'm trying to find is if there's anything that might affect their pollution control systems."

So far, companies have been "very cooperative," she said.

"They understand (area residents) want as much information as possible," said Wessel, whose position was created after airborne chemical emissions in 1995 and 1996 sent some nearby residents, including students at Barber's Point Elementary School, to the hospital with respiratory complaints. The oil companies Tesoro and Chevron were fined.

Chevron spokesman Albert Chee said the company shares the nearby residents' concerns and has contingency plans to safely cope with the worst-case Y2K scenarios. "Each and every day it is our goal to operate our facility with the utmost safety for our workers, our neighbors and our environment," he said.

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