As the week ends, here are a few things going on with Sandy and oil markets that are trying to get back to normal.

Several developments Thursday showed companies were taking significant steps to go around the power problems in the New York area. Most facilities in the area–particularly those in the whole New Jersey-Staten Island corridor–continue to struggle with no power, flooding, or both. By the end of the day Thursday, though, there was a fair amount of good news. Buckeye Pipelines said it had restored most of its eastern pipeline system. It doesn’t have power at its Linden, NJ terminal, but it brought in generators to allow the terminal partial operations.

Similarly, Kinder Morgan said it was bringing in backup generators to allow its terminals in the New York area to operate. (A thought: did company officials need to wait on line at Home Depot to buy them?) But in the statement announcing the restart, Kinder did concede that its three terminals in New York did suffer flooding.

Colonial Pipeline said it was going to resume deliveries into Linden late Thursday. But like others in the Linden area, it’s going to be doing so with generators brought in. Ironically, one other Linden facility–the Phillips 66 refinery known as Bayway-does have power, but it also reportedly has serious damage and flooding. But the other Linden refinery–the Hess facility that is actually just an FCC unit, without crude distillation–does not have power.

There’s increasing talk about the condition of the International-Matex Tank Terminal in Bayonne, with a heavyweight capacity of 16 million barrels. To give you a sense of the size, Hess has an adjoining terminal; it’s 10% of the IMTT capacity. Terminal manager Richard Fisette said in an email that he has no estimate on when power restoration will take place. Hess could not be reached for comment on the status of its Bayonne terminal, but “they’re talking maybe Monday” for a restoration of power, a bunker trading source said Wednesday. The sheer size of IMTT and its problems is being cited as a reason why “normal” still may be sometime away.

Also late in the day, one of New York’s two US senators, Charles Schumer, said the Coast Guard had reopened New York harbor to limited petroleum traffic. Tankers won’t be coming all the way into port; they’ll be lightering on to barges outside the Narrows. But combined with the work-arounds that some terminals are putting together to get operations going, these two developments are creating some hope for people waiting in hour-long lines to get gasoline.

• We wrote earlier this week about the economic difficulties a company might encounter trucking gasoline from areas that had it to areas that don’t, like New Jersey or Long Island. And just like that, a company went out and did it, even though spreads may not make it a profitable move. PBF Energy has begun to load fuel trucks at its Delaware City refinery racks in Delaware City, Maryland, for delivery to the New York, New Jersey and Maryland areas, the company said Thursday. The 190,000-barrel refinery remained open throughout the landing of Sandy with its status listed as routine, company spokesman Michael Karlovich said in an email. Maritime traffic out of the refinery has also been opened by the US Coast Guard.
• As far as steps to be taken to waive regulations that might be hindering resupply, there was no rush to take advantage of any of them. There are no applications for Jones Act waivers to allow shipments of products from the Gulf Coast to the East Coast on a non-US flagged vessel. With a waiver in place to allow conventional gasoline to be burned in the 16 states that normally consume reformulated gasoline, Colonial Pipeline said it would commingle RBOB with CBOB “only when necessary,” which doesn’t sound like it’s getting done any time soon. (Furthermore, there is an expectation that conventional supplies would be trucked in to New York from close-in areas, not shipped on a pipeline, so Colonial policy wouldn’t matter). And there are still no requests to release heating oil from the strategic heating oil reserve.
• But there is a new proposal out there to help alleviate the shortage, compliments of the Iowa Renewable Fuels Association. The IRFA sent a note to President ABM asking him to suspend what it calls the “petroleum mandate”–a term used by absolutely nobody else–to allow blends with 15-20% ethanol to be sold. There are a few issues that the group’s proposal skips. For example, the number of cars that can safely burn E15 and E20 is certainly limited, though the precise number is in dispute. Use of these fuels may violate a car’s warranty, no matter what the President might say. The number of stations that now sell E15 is less than a dozen, a Presidential waiver is not going to suddenly change that, and stations aren’t going to open themselves up to liability issues by suddenly dumping more than 10% ethanol into their existing tanks. But the use of the term “petroleum mandate” is certainly a new type of spin. It is the ethanol industry’s perspective on fuel regulations, and implies not that the fuel mix needs to be a certain amount of renewable fuels each year, but that the mandate is that the balance of non-renewable consumption is petroleum, given problems blending more than 10% ethanol. Therefore, it’s a petroleum mandate, not a renewable fuels mandate. It’s a phrase not likely to catch on.