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Sandy: The October Surprise Comes in a Perfect Storm

By Daniel J. Graeber | Mon, 05 November 2012 23:46 | 0

The attorney general for the state of New York said Monday he had "zero tolerance" for inflating costs for essential items like gasoline in the wake of Hurricane Sandy. The state, as are those up and down the eastern U.S. coast, is struggling with recovery efforts after a so-called superstorm descended on the region last week. Last week, the EPA issued waivers on regulations regarding gasoline to ensure adequate supplies.  This week, responders are scrambling to control a series of fuel oil leaks at New Jersey terminals. The storm hit just days before voters take to the polls in what's billed as a very tight presidential election race. For 2012, it seems, the October surprise emerged as a perfect storm.

"Our office has zero tolerance for price gouging," said Attorney General Eric Schneiderman in a statement Monday. "We are actively investigating hundreds of complaints we've received from consumers of businesses preying on victims of Hurricane Sandy, and will do everything we can to stop unscrupulous individuals from taking advantage of New Yorkers trying to rebuild their lives."

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Motor group AAA reports parts of the east coast hardest hit by Sandy are paying more for gasoline than most of the rest of the country. In New York City, consumers Monday were paying $4.06 for a gallon of regular unleaded gasoline, compared to a national average of $3.47. The U.S. Environmental Protection Agency last week waived parts of the Clean Air Act to ensure east coast residents have ample supplies of gasoline. The Defense Department, meanwhile, was working to get generators to retail gasoline stations that are still without power from the storm. By Monday morning, the Energy Department said there were more than 1.3 million customers without power, a week after Sandy hit.

U.S. President Barack Obama, in a statement, said he found there was a "severe energy supply interruption" because of the storm. National home heating oil reserves were released from a Connecticut storage facility for the first time and the Energy Department said certain laws were suspended so that foreign vessels could ship petroleum products from the Gulf of Mexico to ports along the northeast coast. Some refineries in New Jersey, however, remained closed Monday, extended gasoline shortages into a second week. Phillips 66 reported a release from their New Jersey terminals this week.

New Jersey Gov. Chris Christie, a Republican, was lampooned on U.S. variety show Saturday Night Live for lauding Obama's relief efforts despite his allegiance to Republican presidential challenger and former Massachusetts Gov. Mitt Romney. Christie told an Israeli broadcaster last weekend he continued to support Romney, but praised the president for his ability to show leadership during a national crisis.

"The fact of the matter is that if the president of the United States comes here and he is willing to help my people, and he does it, then I'm going to say nice things about him because he's earned it," he said.

Most national polls suggest the race is very tight among likely voters. But the election is a state-by-state race, where the electoral college map paints a different story. That information suggests Obama may narrowly secure a second term. If that's the case, then the so-called October surprise arrived late last month by way of a perfect storm.

By. Daniel J. Graeber of Oilprice.com

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