Gasoline stations and terminals from Florida to New Jersey are running dry as shortages worsen five days into the shutdown of the biggest US fuel pipeline.
As the Colonial Pipeline system — hit by a cyberattack and forced to shut on May 7 — struggles to recover, fuel terminals are being drained. In parts of the US South, three in every four gas stations have run dry, while in Washington, D.C., cars are lined up for blocks as they wait to fill up. US pump prices have topped $3 a gallon for the first time in six years.
“The situation completely changed overnight,” said Gary Kandola, chief financial officer at Express Fuel Distributors Corp., which supplies gas stations in New Jersey and Pennsylvania. “They have people coming in from Virginia, Maryland” to acquire fuel.
The escalating disruption underscores just how vulnerable America’s fuel supply system has become in the wake of increased attacks on energy infrastructure by hackers over the past few years. The fuel shortage is also adding to growing inflationary pressures that have spurred rallies in commodity prices from timber to copper this month.
The White House has so far announced several measures to blunt the growing crisis, including fuel waivers and additional weight limits for some trucks. It is also taking initial steps that could permit foreign tankers to transport gasoline and diesel to East Coast ports.
“Colonial has announced that they’re working toward full restoration by the end of this week, but we are not taking any chances,” Transportation Secretary Pete Buttigieg said at a daily White House briefing on Wednesday. “Our top priority now is getting fuel to communities that need it, and we will continue doing everything that we can to meet that goal in the coming days.”
About 65 percent of stations in North Carolina are without fuel and at least 40 percent in Virginia and Georgia, according to retail-tracker GasBuddy on Wednesday. Three distribution hubs in Pennsylvania have run dry and long lines of tanker trucks are forming at terminals in New Jersey. New Jersey Governor Phil Murphy said Wednesday the state does not have a supply issue.
Colonial each day normally ships about 2.5 million barrels (105 million gallons), an amount that exceeds the entire oil consumption of Germany. The company has only managed to restart a small segment of the pipeline as a stopgap measure. Even when full service is restored, it will take about two weeks for gasoline stored in Houston to reach East Coast filling stations.
As the outage drags on, traders are booking larger vessels that can send more fuel from the Middle East and Asia west to destinations such as the US East Coast, according to shipbrokers and fixtures data compiled by Bloomberg.
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 in some states. Both companies said they’re taking extraordinary measures to replenish tanks.
The Biden administration issued an order on Sunday extending the amount of time truck drivers can spend behind the wheel when transporting fuel across 17 states and the District of Columbia. On Tuesday evening, the Transportation Department said 10 states could allow heavier-than-normal truck loads of gasoline and other fuels.
Federal transportation regulators also took the first step toward waiving the 101-year-old Jones Act that prohibits foreign-flagged and -staffed ships from hauling products from one US port to another.
“The Department of Homeland Security is standing ready to review any requests for a temporary waiver of the Jones Act from companies that demonstrate that there’s not sufficient capacity on Jones Act-qualified vessels to carry specific shipments of fuel in and around the region,” Buttigieg said on Wednesday. He declined to speak to “any specific waiver requests going on right now.”
Meanwhile, most Gulf Coast refineries are expected to trim output amid expectations that supplies will begin backing up in the nation’s oil-refining nexus. Much of the cuts may be shouldered by refineries from Port Arthur, Texas, and eastward. At least one refinery each in Texas and Louisiana already reduced production.
The Environmental Protection Agency moved to allow the sale of gasoline that doesn’t satisfy requirements meant to help combat smog in certain areas. An initial order allowed the sale of conventional gasoline in areas where reformulated gasoline is required across Maryland, Pennsylvania, Virginia, and the District of Columbia. A second order went further by waiving low-volatility requirements governing conventional and reformulated gasoline in those areas, as well as nine other states.
Gasoline isn’t the only oil-derived product under threat. In an effort to bolster jet-fuel inventories, Southwest Airlines 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 loaded extra fuel on flights to preserve local supplies in places like Baltimore and Greenville-Spartanburg, S.C.