(Bloomberg) -- Reno, Nevada, is facing a two-pronged energy-supply problem during a national glut: a scarcity of pipeline space and a trucker shortage as crews combating West Coast wildfires command more fuel.
The airport serving the casino city of more than 200,000 and nearby Lake Tahoe resorts has asked for help in securing jet fuel. It sits at the eastern terminus of Kinder Morgan’s Northern California pipeline system, making it the last stop for gasoline, diesel and aviation fuel churned out by San Francisco Bay-area refineries.
“We’ve asked how officials can help get more fuel in the pipeline, as well as help to get more drivers to transport fuel,” Reno-Tahoe International Airport spokeswoman Stacey Sunday said. “The truck drivers are needed to bring fuel out to the firefighting aircraft, so if we can get more jet fuel in the pipeline here and allow the trucks to focus on the wildfires, everybody wins.”
A recent spike in tourism during the post-pandemic travel boom also has airlines draining fuel terminals, Sunday said. Jet-fuel demand is expected to be so strong next month that Kinder Morgan has rationed pipeline capacity on the pipes serving Reno, meaning shippers will get only a fraction of what they request.
Kinder Morgan cited Federal Energy Regulatory Commission regulations in an email Tuesday explaining the so-called allocation, the latest in a series of one-month rationing periods dating to April. On Monday, Delta Airlines Inc. asked FERC and pipeline operators to make more room for jet fuel that competes with gasoline and diesel for space on conduits.
“The problem is there isn’t enough trucking capacity there, including truck drivers,” FERC Chairman Richard Glick said at a U.S. House Energy and Commerce Committee hearing. It is “a matter that is of concern in Reno now it but it could spread to other airports.”
Jet fuel could be trucked from the Bay Area, where supply is ample, he said.
Maintaining market balance will be essential in solving the problem, a pipeline trade group said.
“Any additional space on the pipeline they give to jet fuel could take away space from an existing gasoline or diesel customers counting on that delivery to avoid other adverse impacts on the public,” Association of Oil Pipe Lines spokesman John Stoody said in an email.
American Airlines Group Inc., which had flights in and out of Reno, on Monday said fuel-supply problems around the country could last into August. The supply crunch comes as national jet-fuel stockpiles are near 10-year seasonal highs with consumption still short of 2019 levels.
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