The Sun Herald: Shell shuts pumps in parts of South

By ALAN SAYRE

THE ASSOCIATED PRESS

Posted on Sat, May. 29, 2004

New Orleans on empty

Shell stations on the Coast were not affected by the problem at the Norco refinery because the gas they sell comes from the Mobile area.

Tom Russell, owner of Russell's Service Center on Scenic Drive in Pass Christian, said a number of customers asked him about the problem. "Ours comes out of Mobile," he said. "This is different gas altogether. I doubt if anybody in this part of the country picks up in Norco anymore."

Mike O'Quin, a vice president of Burns Oil in Gautier, said the company's Shell station in Ocean Springs also receives gas from the Mobile area. O'Quin said Shell stations on the Coast generally get their gas from Saraland, Ala.

As of Friday, 119 Shell and Texaco stations were closed in the New Orleans area.

Just before the heavy-driving Memorial Day weekend, Shell Oil has stopped the sale of gasoline at more than 500 of its stations in parts of the South because of high levels of sulfur that can damage vehicle fuel gauges and make an empty tank appear full.The damage done by the bad gasoline could cause some drivers to run out of gas unexpectedly. Also, car owners may have to replace their fuel gauges - a repair job that can easily cost $400 to $600.

The problem occurred at an especially bad time for gasoline retailers, who had been expecting brisk fuel sales, at high prices, ahead of the holiday weekend.

"The pumps have been off since Wednesday," said Sri Guntaka, a cashier at a Shell station in New Orleans. "We've lost a lot of customers, hundreds of them. It's very bad."

"When people don't stop to get gas they don't come into the store," he added. "There's no money coming in from anything."

The tainted gasoline originated at the Motiva Enterprises refinery in Norco, La., according to Shell. Motiva is the refining arm of Shell in the East and South.

The company said it is investigating how the high sulfur levels occurred. Sulfur is naturally present in crude oil; some of it is supposed to be removed during refining.

New low-sulfur standards for gasoline established by the Environmental Protection Agency went into effect at the beginning of 2004, but analysts said it is not clear whether this played any part in the problem.

"The big question mark is whether this can happen to other refiners," said Tom Kloza, director of the Oil Price Information Service of Lakewood, N.J., a provider of industry data.

As of Friday, 119 Shell and Texaco stations were closed in the New Orleans area, and 400 were not selling fuel in Florida, said Shell spokeswoman Helen Bow. Shell owns the Texaco brand.

Gas tanks have a float ball that rises and falls with the fuel level. An electrical system reads the float ball's level and transmits the information to the dashboard fuel gauge. The system uses silver electrical contacts, which can be quickly corroded by sulfur.

The problem came to light this week after drivers began complaining about inaccurate fuel gauge readings.

In addition to the New Orleans area, problem fuel turned up in shipments to Miami, Tampa, Sarasota and Fort Lauderdale, Shell said.

Shell is replacing the gasoline at its stations, but Bow did not have an estimate of when all the stations would be pumping again.

Don Redman, a spokesman for Louisiana AAA, said that before the shutdown was announced, he fielded several calls from the auto club's members complaining that their gas readings were way off.

"People have been looking at their odometers because of the high prices and saying, 'Hey, wait a minute,"' Redman said.

Shell said it had received 1,800 queries and 825 claims from people who said their fuel gauges had been affected.

Mark Hebert, who lives in Luling, La., said he filled up at a Shell station in Kenner on Monday, and 200 miles of driving later, his gauge still reads full. Normally, his 2002 Impala gets slightly over 300 miles per tank, he said.

"I just know it has to be between a quarter and a half full at this point," said Hebert, who has submitted a claim to Shell and planned to take his car in next week for a replacement gauge.

Guy Valvis, owner of an auto repair shop in Metairie, said he normally handles about two gauge replacements a year. "I've fixed three or four here in the last week, and I've got two in here right now," he said Friday.

Valvis said the repair job entails draining the fuel and removing the gas tank.

http://www.sunherald.com/mld/sunherald/business/8790082.htm