If Nevada had a pipeline, fuel shortage would be nil
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Airline travel is coming back in a big way and, while Nevada's second-largest airport, Reno-Tahoe International, is warning of fuel shortages, it has little to do with supply and more to do with the lack of pipelines to get the fuel to the airport.
NEVADA AIRPORT FACES FLIGHT DELAYS AMID FUEL SHORTAGE
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JETS | ETF SERIES SOLUTIONS US GLOBAL JETS ETF | 19.38 | -0.16 | -0.82% |
Nevada officials, including Gov. Steve Sisolak, bemoaned the situation earlier this week on reports a shortage of jet fuel could cause the cancellation of cargo and passengers flights, a move that could threaten the state's economy. Other small airports are also reporting tight supplies, which may cause some airlines to either carry extra fuel on the plane to some destinations because they know they can't get filled up when they land or cancel flights to some cities entirely.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAL | AMERICAN AIRLINES GROUP INC. | 12.94 | -0.21 | -1.60% |
Carriers such as American Airlines are pleading with their pilots to conserve jet fuel, saying that every gallon counts. Other airlines are taking similar precautions to make sure that they don't run out of fuel.
So what is the problem?
The larger issue is infrastructure, currently being debated with a massive spending bill in Washington. U.S. airports are showing their age and desperately need to be upgraded all around the country. Major airport hubs have a better infrastructure that allows them to bring in jet fuel by pipeline and have also places to store it. Smaller airports in many cases have oil trucked in. This is not very efficient as many smaller airports are handling a lot more air traffic than they would have, say, 20 years ago.
Additionally, without a pipeline, fuel needs to be trucked in. But the labor shortage grappling the country is hampering those efforts. It is very difficult to get people to come back to work especially when it comes to the fuel industry. Transporting fuel in or around an airport requires a lot of screening and security and a lot of compliance training. After COVID-19, many of those workers were laid off and at this point don't want to come back to work. Nevada's airport also had some runway construction issues which slowed the movement of fuel, further complicating the situation.
A solution: More pipelines?
One of the things that we could do in the future to avoid this type of situation is build more pipelines to move fuel to the smaller airports. The problem with that, of course, is that there are many opponents to building new pipelines — especially anything to do with fossil fuels. So if you are against pipelines, the next time you're sitting on the tarmac and your flight has been canceled due to lack of fuel, maybe you might want to reconsider your opposition to pipelines.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UAL | UNITED AIRLINES HOLDINGS INC. | 41.04 | -0.76 | -1.82% |
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Building more pipelines would assure the free flow of jet fuel when it is needed. Building more storage tanks at smaller airports or expanding these airports would allow for plenty of available fuel.
Oh sure, there are going to be new planes, some of them electric that will fly on short routes; and there will be planes that will come across more fuel-efficient.
While I believe in the future of aviation and expect to see some miraculous things happen in this industry in the years to come, I'm still based in reality in the here and now.
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Phil Flynn is senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com.