Colonial Pipeline Co. told federal officials it will know by late Wednesday whether it’s safe to restart gasoline and diesel shipments that have been on hold since criminal hackers targeted the company last week.
Beyond that deadline, vouchsafed to U.S. Energy Secretary Jennifer Granholm by Colonial Chief Executive Officer Joe Blount, details about when the biggest North American fuel pipeline will recover have been scant. It’s been more than 24 hours since Colonial issued a statement pledging to be back online by the weekend, and the growing frustration among political leaders is palpable as gas stations across the East and South run dry.
“This is something that demands really serious federal attention,” Florida Governor Ron DeSantis said on Tuesday, prior to declaring a state of emergency. “The U.S. government needs to be involved, they need to help mitigate this. My fear is, you have these gas shortages, it’s going to cause a lot of problems for people.”
Fuel shortages that first emerged in South Carolina have metastasized across a wide swath of the South and East, shutting pumps at convenience stores and truck stops from Tennessee to Tallahassee. Granholm told a media briefing that even if Colonial decides to restart on Wednesday, it’ll take days longer to fully restore shipments.
The situation across the southeastern states is “rapidly deteriorating,” Brad Jenkins, a senior vice president at truck-stop owner Pilot, said in an email.
The White House relaxed some environmental rules to allow gasoline to flow in from other regions even as some Gulf Coast refiners were forced to curtail output to cope with logjams of fuel they can’t ship to eastern markets.
The Colonial pipeline is the most important conduit for distributing gasoline, diesel and jet fuel in the U.S., connecting Gulf Coast refineries to population centers from Atlanta to New York and beyond. Each day, it ships about 2.5 million barrels (105 million gallons), an amount that exceeds the entire oil consumption of Germany.
The vital economic lifeline has been shut since late Friday, prompting a run on filling stations by panicked motorists in several states. Even when the pipeline is restored to full service, it’ll take about two weeks for gasoline stored in Houston to reach East Coast filling stations, according to the most recent schedule sent to shippers.
For diesel and jet fuel, the transit time is even longer—about 19 days—because they are heavier and move more slowly.
End Of Day
Granholm said she’s been in regular contact with the Colonial CEO in recent days to track the company’s progress in neutralizing the ransomware attack.
“By the end of business tomorrow, Colonial will be in a position to make the full restart decision,”’ she said. “But even after that decision is made, it will take a few days to ramp up operations. This pipeline has never been shut down before.”
Colonial issued a statement hours later confirming the energy secretary’s account.
Meanwhile, fuel shortages continued to worsen. In Atlanta, 20% of filling stations were dry by Tuesday afternoon, according to retail-fuel tracker GasBuddy.
School Buses
One Washington D.C.-area fuel distributor warned that “catastrophic” shortages are imminent and called on government officials to order school buses to stay off the roads. More than our days into the crisis, Colonial has only managed to restart a small segment of the pipeline as a stopgap measure.
“We have been providing daily and sometimes twice daily updates to our shippers, and have been in close contact with law enforcement and federal agencies to relay information on our restoration efforts,” Colonial’s media relations office said earlier in the day. “We will continue to keep all of our stakeholders informed and appreciate the outpouring of support we have received throughout the industry.”
The company’s corporate website went down twice on Tuesday because of issues unrelated to the hack.
U.S. average retail gasoline prices have risen to their highest since late 2014 due to the disruption, almost touching $3 a gallon. That could add to broader inflationary pressures as commodity prices from timber to copper also surge. Virginia and North Carolina are under states of emergency.
Two of the nation’s largest truck-stop owners—- Love’s Travel Stops & Country Stores Inc. and TravelCenters of America Inc.—confirmed that fuel is scarce is some states. Both companies said they’re taking extraordinary measures to replenish tanks.
Airlines
“It’s going to be catastrophic,” said John Patrick, chief operating officer of Liberty Petroleum LLC. “Governors should declare a state of emergency and ask people chasing tanker trucks to gas stations to stay home. School buses stay put.”
As part of the Biden administration’s effort to ease the burden on consumers, federal transportation regulators took the first step toward waiving rules that prohibit foreign-flagged and -staffed ships from hauling products from one U.S. port to another.
Gasoline isn’t the only oil-derived product under threat. In an effort to bolster jet-fuel inventories, Southwest Airlines Co. has begun flying supplies to Nashville, Tennessee, and other cities. So far, no Southwest flights have been affected by the pipeline closure; rather, the airline said it’s “actively managing” fuel stockpiles.
United Airlines Holdings Inc. loaded extra fuel on flights to preserve local supplies in places like Baltimore and Greenville-Spartanburg, South Carolina. Problems are “relatively minor so far,” however, Chief Executive Officer Scott Kirby said at the Resources for the Future Forum.
Federal environmental regulators are waiving rules that bar the sale of conventional gasoline in areas where reformulated fuel is required. They also will permit the sale of gasoline that doesn’t satisfy requirements meant to help combat smog. The waivers apply to Maryland, Virginia, Pennsylvania and Washington, D.C., through May 18.
Emergency shipments of gasoline and diesel from Texas are already on the way to Atlanta and other southeastern cities via trucks, and at least two Gulf Coast refineries began trimming output amid expectations that supplies will begin backing up in the nation’s oil-refining nexus.
The national average retail gasoline price rose to $2.985 a gallon, the highest since November 2014, according to auto club AAA. The premium for wholesale gasoline in the New York area expanded to its widest in three months.
