Randall Walker Fuel commission chairman says community served by discussion

A Clark County advisory panel on Friday approved a package of recommendations for increasing gasoline, diesel and jet fuel supplies in Southern Nevada.

Yet the Blue Ribbon Fuel Commission already has served the community by focusing attention on looming concerns about fuel shortages short-term and long-term, said Randall Walker, commission chairman and director of the Clark County aviation department.

At the end of last year, the area had no prospects for new fuel supply lines. Now, the owner of the only Southern Nevada gasoline pipeline, Kinder Morgan Energy Partners, and three other pipeline companies are talking about proposals to build a new pipeline to Las Vegas.

Walker believes commission-generated publicity about the fuel issue attracted the pipeline developers.

"Clearly, I think the big need is just to get more pipeline capacity (for Southern Nevada)," Walker said.

Fuel reliability and diversity of supply are other key themes to the commission recommendations, he said.

At one point, the Las Vegas area was about one year away from hitting peak capacity on the Calnev pipeline, which Kinder Morgan uses to deliver most of the fuel consumed in Southern Nevada, Walker said.

"It was a very serious concern," Walker said.

Shortages probably would have resulted in higher fuel prices in the Las Vegas area, Walker said, or could have led to rationing.

Two developments eliminated short-term worries about having adequate fuel supplies for cars, trucks and airlines, Walker said.

Kinder Morgan improved its Barstow, Calif., lines to increase fuel supplies for the valley by 3.8 percent, Bill O'Brien, a Kinder Morgan official, told the commission.

In addition, Pan Western Corp. of North Las Vegas is building a rail spur so that diesel can be delivered by railway and that also will increase supply, Walker said.

Over the longer term, two of the four pipeline companies, Kinder Morgan and Pacific Texas Pipeline Co. of Phoenix, say they are proceeding with new fuel pipelines to Las Vegas. Kinder Morgan plans to build a larger pipeline to Colton, Calif., east of Los Angeles, and Pacific Texas says it will build a pipeline linking Las Vegas to Texas refineries.

Walker suspects only one of the two projects will happen within the next few years.

"Whoever does it first, that's probably going to be the one," Walker said.

Kinder Morgan says it offers fuel diversity already because it not only can carry refined products from Southern California but also overseas refineries that are shipped to Los Angeles. The commission, however, also would like the diversity that comes from having a second pipeline to another geographic area so that fuel supplies wouldn't be interrupted by, for example, an earthquake in the Los Angeles area.

The commission "agreed that the fuel should come from a source other than California, the current source of all Southern Nevada's fuel," the preliminary version of the commission report says.

Southern Nevada officials first became concerned about having only one pipeline during the energy crisis of 2001, when fuel shipments were interrupted because rolling blackouts stopped pipeline pumps in California, Walker said. Gov. Kenny Guinn negotiated a deal with the California Gov. Gray Davis to restore power to the pipeline.

Since then, there have been pipeline shipment interruptions because of a train derailment, flood and fire, Walker said. O'Brien of Kinder Morgan said none of the interruptions were longer than a few days.

At the meeting Friday, the commission added several recommendations to its report.

The panel advocated exploring opportunities to use the same winter gasoline fuel formulation as California because that would make it easier to replace gasoline supplies in Southern Nevada in case of a disruption.

The commission suggested the county act in advance to approve a site for a fuel storage tank on the south side of Las Vegas. This would streamline work if a company decides to build a storage tank, Walker said.

The advisory body urged the county to eliminate property and fuel taxes that might discourage development of a new fuel pipeline to Las Vegas. It also asked the county to encourage the Regional Transportation Commission continue to pursue expansion of mass transit.

The commission voted to approve a draft version of the recommendations and to authorize Walker to make nonsubstantive changes of the final document, which will be reviewed at a final meeting on Oct. 20.