This post is a part of our series on private infrastructure resilience – or lack thereof – during major disasters. Learn more here.
In October of 2012, Superstorm Sandy hit New York City. The storm caused a record high storm surge of 13.88 ft and power outages that affected 7.9 million businesses and households; this combination led to one of the most severe fuel shortages in the history of the Northeast United States.
New York’s fuel supply is transported to New York Harbor by land via pipeline, as well as by sea through tanker and barge. In large cities such as New York, there is limited capacity for storage of fuel; therefore fuel companies continuously import just enough fuel to keep operations running for a short period of time. The power outages and flooding caused by Sandy crippled the distribution of fuel over land by shutting down refineries and forcing pipelines to shut off segments or operate at reduced capacity, resulting in a widespread fuel shortage. Additionally, a diesel spill coupled with a large amount of debris in the waterways prevented vessels carrying fuel from reaching petroleum terminals by sea for a week after the storm passed, exacerbating the shortage.
Fuel shortages are particularly problematic in the immediate aftermath of a disaster. Fuel is needed to power critical emergency services such as fire trucks and ambulances, as well as organizations seeking to help victims. Prolonged fuel disruptions also impact the ability of the region to return to normal function by limiting transportation, rebuilding, and industrial activity. In the case of Sandy, fuel refining activity did not return to normal levels until a month later, due to an extended outage of the Phillips 66 refinery in New Jersey.
The United States government took several actions to compensate for the failure of the fuel distribution system. The Department of Homeland Security waived the Jones Act, enabling foreign-flagged vessels to ship petroleum products from the Gulf of Mexico to the Northeast. The Department of Energy authorized the Department of Defense to tap into and distribute ultra-low sulfur diesel from the Northeast Home Heating Oil Reserve (stored in Massachusetts, New Jersey, and Connecticut) to emergency services. Finally, the Obama administration directed the Defense Logistics Agency to purchase up to 380,000 barrels of unleaded gasoline and 317,000 barrels of diesel to be delivered to affected areas by truck.
The fuel shortage and resulting recovery challenges after Sandy highlighted the importance of access to fuel for critical functions and our dependence on the private sector for essential resources. The failure of refineries and pipelines left the government desperately scrambling to cover the gaps and restore at least the most basic emergency services. Considering the importance of fuel to the function of the surrounding communities, investments in resilient power systems and backup measures for privately owned fuel distribution infrastructure would be beneficial to the company, the communities that depend on it, and the government. By leveraging opportunity funds to create more resilient infrastructure, it could be possible to mitigate or even prevent the next big fuel shortage.
To learn more about Opportunity Funds, read the first installment in this series of blog posts: