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Gas shortage in the Southeast - What's the outlook?

Posted by: Erik Bjornstad

There are 149 refineries in the United States, all working at high capacity around the clock to pump out enough gas and diesel to meet ever-increasing demand. When all parts work as designed, everyone gets what they need, when they need it. It’s a nice system. But when the unexpected happens, like one part getting knocked out or a hurricane disrupting supply on the Gulf Coast, it causes problems.

alabama-pipeline-leak-colonial-pipeline.jpgUnfortunately, that’s the current situation affecting the Southeastern United States.  In early September, a leak was discovered in a part of the Colonial Pipeline that runs through rural Alabama. 250,000 gallons of fuel had been lost into a local lake.  They actually were able to shut that part of the pipeline down within just 20 minutes of detecting the leak, averting an environmental disaster. While it’s great that they discovered the leak when they did, it meant closing a section of the pipeline.  And that’s bad news for consumers.

The Colonial Pipeline is one of the most essential pipelines in the country. It runs all the way from Houston up to New York/New Jersey and supplies gasoline to about 50 million people along the East Coast – about 40% of the total gasoline for all of those people. Any shutdown of the pipeline is a considerable threat to the consistent gasoline supplies that these people need.

It only took a few days for the supply disruption to affect gas prices in the Southeast. Five states – Tennessee, Alabama, Georgia, South Carolina, North Carolina – were reporting substantial gas shortages as of September 19th, with many stations running out completely.  Gas prices have spiked about 15-20 cents a gallon in those areas.  For other customers in the Northeast, they aren’t seeing nearly the same effect because they can get gas from other areas. The Southeast, unfortunately, is out of luck.

How much longer can we expect this to go on?

Fuel producers have had to scramble to figure out alternatives to get fuel where it needs to go. Ships are being pressed into service to move gas from Texas up to New York.  And they’re running as many tanker trucks out there as possible.  But these are a lot more expensive ways to move gasoline than the pipeline is.

When will this whole thing be resolved? They’ve got over 700 people currently to dig out parts of the area and help construct an alternative pipeline to re-reroute the gas supply.  But experts don’t anticipate the problem being fixed until next week at the earliest. So we will all watch and pray.

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Image Credit: al.com via Colonial Pipeline

This post was published on September 23, 2016 and was updated on September 23, 2016.

Topics: Fuel Policy