The US Department of Energy (DOE) is estimating that a desire by consumers to fill up their gas tanks as a Y2K precaution could increase demand by an amount nearly equal to all the gasoline consumed on one day in the US.
This above-normal demand for gas -- estimated at 7.5 million barrels of oil -- will likely be spread throughout the week leading up to New Year's, said Dave Costello, the economist in charge of the short-term energy outlook at the DOE's Energy Information Administration. The US consumes on average about 8 million barrels of oil daily.
If that estimate holds, Costello doesn't think it will cause any significant supply problems, although he wouldn't rule out the possibility of shortages in some areas.
But this estimate is based on unscientific assessments of consumer response to Y2K and is uncertain, said Costello. The DOE has relied on a private survey of consumer response, which estimated that about 25% of motor vehicle owners would fill up as a Y2K precaution. Moreover, this estimate doesn't account for any regional differences in consumer demand.
"Assuming people don't go absolutely nuts, it could be interesting, but it shouldn't pose any real serious problems as far as supply is concerned," said Costello. "But a lot of this is very uncertain; we don't know if it's 25% [who will fill up because of Y2K] and don't know whether it will be different in one region to another."
If demand rises well above 25%, it could have a "significant impact" on supplies as could a last -minute rush for gas, said Costello The White House's Y2K office is recommending that people keep their automobile gas tanks "above half full."
Although the DOE doesn't know whether this increased demand will affect price at the pump, it has reported that increased demand for the winter and Y2K precautionary building of end-user inventories could raise the price of crude oil this month.
Public reaction to Y2K is the wild card in any Y2K assessment.
"The industry thinks it is ready and we have made every attempt to reassure people that there will be no breakdown in the supply system," said Mike Shanahan, a spokesman for the American Petroleum Institute in Washington. If the American public is confident about gas supplies, chances are there won't be a supply problem, he said. But "nobody can measure the psychology of it with any precision."