Finding Fuel In Houston

This morning, the front page of Financial Times carried a story about fuel shortages that may cause 100-mile long traffic jams as millions prepare to return to Houston. The Wall Street Journal reported today that most of the three million people are returning with empty tanks of gasoline. Authorities are asking people not to return to schools and businesses and stay out of town for two or three days. Perhaps, they should have assigned a random return date based on license number but how could they distribute the news of that policy with certainty that it would reach everyone? Why would anyone heed such a one time policy, specially in Texas? There are reports of some who have brandished weapons at gas stations. In the midst of traffic and other blockage, the Journal reports that Exxon Mobil was only able to deliver fuel to 14 service stations in Greater Houston on Saturday, a delivery that normally reaches hundreds of service stations. Journal also reported a conversation with one tanker driver who was suprised at the level of public panic regarding fuel. So, some of the reports may be a bit exaggerated.

There are blogs announcing open gas stations (and other Hurricate Rita related stories), run by Houston Chronicle. I wonder how helpful blogs can be to the majority of those stuck in a 100-mile long traffic? Here's the announcement from the Chronicle.

Do you have a blog, live in the Houston-Galveston area and plan to ride the storm out? If so, we'd like your help with an experiment in citizen journalism. We're launching a blog this afternoon called Stormwatchers. We'd like volunteers in key parts of the area with experience blogging to tell us what they're seeing as the Hurricane Rita comes closer, makes landfall and moves on.

We're particularly interested in bloggers who live in the I-45 South corridor; in the Freeport/Angleton area; and the southwest area, including Katy.

Why did fuel shortages lead to large traffic jams on the way out and the same on the way back to the city? How does the transportation system that is based on private automobiles fail to provide efficient movement of people for their various purposes? If 20 or 30 cars among hundreds of thousands of cars run out of fuel in the middle of a freeway, that's enough to stall a huge sea of people trying to use it to get home. The Journal puts the number of vehicles involved in the evacuation at 1.2 million, with many families taking all of their cars. Imagine what would have happened if larger numbers of people had left and returned using public transportation. Had the rails survived the disaster, the problem of fuel distribution would not have been as acute. (It is interesting that in the midst of recent Hurricane disasters, some in the Congress are advocating a cut in the AmTrak budget.)

The U.S. has in the past louded itself for its economic power. However, when I look around, I see great economic inefficiencies.

Part of the economic inefficiencies have to do with the inherent structure of society and the scale of its cities and roads. While roads and highways prove optimal for large deliveries to large retail stores, they are not optimal as conveyors of city traffic. The freeways do not create "live" city space. In fact, they divide and then kill live city space. The more of them means the more dead a city becomes. In contrast, tree-lined boulevards with wide pavements, trains and train stations, like the ones in Europe, help bring life to the city.

Note: Just to prove to the first commentator below that I do know some economics and queuing theory, here's a short analysis.

For an urban area, under normal conditions, refueling probabilities are probably fairly uniformly distributed over time, with some minor variations during the week. This is due to varying fuel capacity, driving habits and geographic distribution of people and service stations. This randomness, makes it possible to deliver fuel efficiently to a large number of service stations. When an event (like Hurricane Rita evacuation) causes people to fuel at a relatively short time interval in narrow geographic zones, the re-fueling distribution over time tends towards a delta function, with very sharp peak and low standard diviations over time and space. Of course, this grossly reduced randomness, strains the distribution system. However, it was not this but rather the inefficiencies inherent in the traffic jams caused which reminded me of the economic inefficiencies in our transportation system in general. These generally occur because of the large number of cars-per-capita. Of course, no one wants to sacrifice their "freedom of movement" for a more efficient economic set up. It is just not in our nature. Every morning, I leave my home in a suburb and get on a freeway, driving about 15 miles in a barren land before I get to the nearest exit to work, then I get onto a barren expressway and turn at a shoping mall with a huge parking lot to get into another huge parking lot at our Sun campus. I do all this while coming across with thousands and thousands of cars (mostly moving in the opposite or same direction on the freeway) with only one passenger. I know I can get to work spending far less fuel and time on the road if good, efficient public transportation was available. However, the fact that this is also true for almost everyone else means that everyone is wasting resources. If wasting resources is not economic inefficiency, I don't know what is, unless of course anyone really believes that a price of fuel that is lower than the price of drinking water is a real price to society in the long-run. Some might argue that the waste in resources is necessary as a transaction cost in order to maintain the system at the uniform probability distribution I mentioned earlier. Of course, this may be true, but I'd like to see a good proof of it on detailed data. One can never totally fix the problem but good public transportation systems might be a way to alleviate the extent of it. That's all I'm going to say on this, as there are other important things (like the protests in Washington D.C.) going on which are totally ignored by most media inundated with Hurricane news.

Comments:

Apparently you've missed a few economics classes if you think the fuel shortage is a testament to an ineffecient economy. Rather, the effecient fuel stations normally did not stock excess fuel in order to operate more effeciently! However, when an unusual event such as evacuating several millions of people occurs, demands sharply exceeds available inventories.

Think about it...no, really this time.

Posted by Wes W on September 26, 2005 at 02:07 AM PDT #

Dear Here@There.Com,

Fuel shortage has to do with the disaster. True. But when I read about the stories of traffic jam, I get to the same problem, i.e. an inefficient use and distribution of fuel in general. In Europe, there are far fewer gas stations than the U.S. but people seem to be getting around just as much. In both cases, under normal conditions.

The disaster is just reminding me of the economic inefficiencies. I've changed the blog entry name. Its initial name was not suitable.

Posted by M. Mortazavi on September 26, 2005 at 02:42 AM PDT #

I remember the fuel blockades in the UK several years ago - the mere thought of a fuel shortage (caused by striking truckers) caused everyone to immediately go and fill up - depleting the small supply in the gas stations pretty quickly and causing a (fairly minor) fuel crisis in some parts.

So it was a combination of the 'stupidity of crowds' and the 'overly efficient' fuel supply chain that caused the problems.

Interestingly - one thing that could stop this happening would be real-time demand pricing of fuel - but the fuel companies would be seen to be cashing-in on other's misfortune (the case in Texas is very different).

- Rich

Posted by Rich Sharples on September 26, 2005 at 07:42 AM PDT #

You're right. This is a classic supply chain problem.

Posted by M. Mortazavi on September 26, 2005 at 08:19 AM PDT #

Post a Comment:
Comments are closed for this entry.
About

MortazaviBlog

Search

Archives
« April 2014
SunMonTueWedThuFriSat
  
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
   
       
Today