Skip to Content
Money

Colonial Pipeline is restarting but the gas crisis isn’t over

The Colonial Pipeline is back in action after a six-day shutdown, but widespread gas station outages in the Southeast could linger for days.

Industry executives and government officials warned it will take time to refill gasoline supplies depleted by panic-buying, a truck driver shortage and the ransomware attack on the pipeline.

As of 7 a.m. ET Thursday, a staggering 71% of the gas stations in North Carolina and 55% in Virginia were without gasoline, according to GasBuddy, a platform that tracks fuel demand, prices and outages. And 49% of the stations in Georgia are without gas.

That means all three states only saw “limited overnight improvement” in the availability of gas, according to Patrick De Haan, head of petroleum analysis at GasBuddy.

GasBuddy reported major outages in Washington DC (47%), South Carolina (54%), Florida (31%), Tennessee (34%) and Maryland (34%).

Major cities including Atlanta, Charlotte, Myrtle Beach and Raleigh are seeing “some” improvement in outages, De Haan wrote on Twitter.

‘Substantial progress’ means back to normal by Monday?

Operators of the Colonial Pipeline said Thursday morning that they have made “substantial progress” in restarting the pipeline system, adding that fuel has begun flowing to most of the markets it serves. By midday Thursday, they expect every market the pipeline feeds will receive fuel from the system.

A map distributed by the company indicates segments of the pipeline that run in North Carolina, Virginia, and Maryland are expected to be operational by noon ET Thursday.

Colonial Pipeline launched its restart Wednesday evening after a six-day shutdown caused by a malware attack. Energy Secretary Jennifer Granholm said Thursday the successful restart of the 5,500-mile pipeline “should mean things will return to normal by the end of the weekend.”

Jones Act waiver granted

One issue is that the 5,500-mile pipeline flows at just 5 miles per hour, meaning it could take days or even weeks for gasoline, diesel and jet fuel to flow through to most places and refill nearly empty storage, Platts analysts said.

“We are not out of the woods yet, but the trees are thinning out,” Richard Joswich, global head of oil analytics at S&P Global Platts, wrote in an email.

At the same time, a massive shortage of truck drivers is snarling the delivery of badly needed fuel to stations in the Southeast.

“The restarting of the Colonial Pipeline is the beginning of the end of the crisis, not the end of the end of the supply crunch,” Michael Tran, managing director of global energy strategy for RBC Capital Markets, said in an email. “With an operational pipeline, the race to logistically replenish regional and localized gas stations is the next step.”

Oil industry executives urged Americans on Wednesday to not hoard gasoline, warning that panic-buying is exacerbating the situation. Officials said some gas stations blew through days’ worth of inventory in mere hours.

After pleas from the oil industry, the Biden administration announced late Wednesday it would approve a temporary and targeted waiver of the Jones Act, which requires ships sailing between US ports to be American flagged and domestically built. Homeland Security Secretary Alejandro Mayorkas approved the waiver to an individual company “in the interest of national defense.”

Allowing foreign vessels to move fuel from the Gulf Coast to the Eastern Seaboard could ease supply constraints.

CNN

Comments

Leave a Reply

Skip to content