MAY 12, 2021
A small but increasing number of gas stations along the East Coast reported fuel shortages Tuesday, as supply lines recover from a ransomware attack on a gas pipeline last week.
Six states along the hacked pipeline operated by Colonial Pipeline Co. are estimated to have gas station outages, with amounts ranging from 0.5 percent in Alabama to 7.6 percent in Virginia on Tuesday morning, according to GasBuddy analyst Patrick De Haan. The outages are creeping upward, with Virginia’s rising from 5 percent just a few hours earlier.
The critical pipeline runs from Texas to New Jersey and delivers nearly half of all refined fuel to the East Coast.
The supply shortfall on already tight reserves has bumped rising gas prices up even higher. Fuel demand for motorists has jumped over 30 percent in the East in the past week, over 16 percent in the Midwest, and 13 percent in the Gulf Coast, according to GasBuddy’s tracking.
The supply shortfall on already tight reserves has bumped rising gas prices up even higher. Colonial Pipeline reasserted Tuesday that it expects to restore much of its service by the weekend.
“Colonial Pipeline is continuing to work in partnership with third-party cybersecurity experts, law enforcement, and other federal agencies to restore pipeline operations quickly and safely,” the company said in a statement. It plans to gradually reopen sections of the pipeline. It is currently operating under manual control one line extending from North Carolina to Maryland, the company said.
But oil refiners and distributors are frustrated by what they say is a lack of communication and details from Colonial about next steps, Bloomberg reported.
Energy Secretary Jennifer Granholm said during a White House press conference Tuesday that Colonial’s CEO had told her the company will be ready to make a decision about restarting by the end of the business day Wednesday.
The Energy Department will instruct Colonial to direct its flow to hardest hit areas, she said. Officials will be monitoring the situation and said there would be no tolerance for price gouging.
“Just as there was no need to hoard toilet paper at the beginning of the pandemic, there should be no cause for hoarding gasoline, especially in light of the fact that the pipeline should be fully operational by the weekend,” Granholm said.
Even after service is fully restored, pricing and shortfall issues could linger, experts say. It takes 15 days for the gasoline, traveling at 5 miles per hour, to go from refineries in Houston to New York.
“This issue may be slow to improve even days after the pipeline reopens. Americans hoarding gasoline are running the system dry, a system that won’t be able to fully replenish retail stations for perhaps weeks, made worse by a shortage of tanker truck drivers,” De Haan told NBC News in an email.
De Haan estimated the oil supply system is down by over half a billion gallons of fuel from the shutdown. It would take 12,500 tanker drivers to deliver that amount, he said.
The outages and price hikes have sent users and politicians scrambling for solutions. The White House has formed an interagency task force to monitor and tackle the issue. The Environmental Protection Agency issued temporary fuel waivers to increase supply.
In Virginia, Gov. Ralph Northam declared a state of emergency, giving additional flexibility and funding for state and local governments to ensure adequate fuel supply.
Georgia Gov. Brian Kemp suspended gas taxes in the state through Saturday to help offset rising costs.
The air travel industry is also rushing to strategize in the face of depleting inventory. American Airlines added stops to some nonstop flights to avoid refueling in Charlotte, North Carolina. Southwest Airlines is flying planes with additional fuel to some East Coast airports.
On Monday, AAA said that the national gas price average had jumped 6 cents to $2.96. The motorist nonprofit said that prices were likely to continue to climb in response to the pipeline shutdown.
“This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. Areas including Mississippi, Tennessee and the East Coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week,” said Jeanette McGee, AAA spokesperson, in a statement. “These states may see prices increase three to seven cents this week.”
After national average gas prices fell from about $2.60 per gallon in January 2020 to $1.75 during the height of pandemic lockdowns in April 2020, prices have been on an upward swing. Prices rose to nearly $2.25 by June of last year and remained fairly steady until December. Then they began steadily climbing upward, buoyed by loosening restrictions, increasing vaccinations, warmer weather and more driving.
Several of the top providers of retail gas — BP, Exxon, Shell, and Speedway — could not be reached for comment, but industry sources said the larger retailers are closely monitoring market conditions and supporting Colonial in whatever way they can.
Chevron said its refining operations were not affected, but warned of temporary fuel disruptions in certain areas due to lower supplies and higher customer demand.
“We are actively managing fuel supply disruptions related to the Colonial Pipeline outage,” Chevron spokesman Tyler Kruzich said in an email. “While we continue to work hard to supply our customer network along the U.S. Gulf and East coasts, the duration of the outage may lead to limited disruptions in supply in some areas based on current inventory levels at our proprietary terminals and exchange partners, logistics constraints caused by the outage, and customer demand.”
Courtesy/Source: NBC News