Gas stations report shortages as pipeline shutdown drags on

Photo: The Canadian Press

More than 1,000 gas stations in the southeast United States report running out of fuel, primarily because of what analysts say is unwarranted panic-buying among drivers, as the shutdown of a major pipeline by a gang of hackers entered its fifth day, Tuesday.

Government officials acted swiftly to waive safety and environmental rules to speed the delivery of fuel by truck, ship or rail to motorists and airports, even as they sought to assure the public that there was no cause for alarm.

The Colonial Pipeline, the biggest fuel pipeline in the U.S., delivering about 45% of what is consumed on the East Coast, was hit by hackers who lock up computer systems and demand a ransom to release them.

A large part of the pipeline resumed operations manually late Monday, and Colonial anticipates restarting most of its operations by the end of the week, U.S. Energy Secretary Jennifer Granholm said.

Motorists may still feel a crunch because it takes a few days to ramp up operations, but she said there is no reason to hoard gasoline.

“We know that we have gasoline; we just have to get it to the right places,” she said.

S&P’s Oil Price Information Service put the number of gas stations encountering shortages at more than 1,000.

“A lot of that is because they’re selling three or four times as much gasoline that they normally sell in a given day, because people do panic,” said Tom Kloza, an analyst with S&P. “It becomes a self-fulfilling prophecy.”

The pipeline runs from the Texas Gulf Coast to the New York metropolitan area. The states most dependent on the pipeline include Alabama, Georgia, Tennessee and the Carolinas, Kloza said.

In Virginia, 7.7% of the state’s nearly 3,900 gas stations reported running out of fuel Tuesday, according to Gasbuddy.com, which tracks supply. In North Carolina, 8.5% of almost 5,400 stations were out, the company said.

There were scattered reports of higher gasoline prices, but prices were rising even before the pipeline incident heading into the busy summer driving season. Nevertheless, Granholm warned gas station owners, “We will have no tolerance for price gouging."

To ease brief shortages, the White House is considering temporarily waiving a law that says ships delivering products between U.S. ports must be built and manned by Americans.

The Transportation Department also is relaxing some workforce requirements and enlisting railroads to deliver fuel inland. And the Environmental Protection Agency lifted some fuel quality requirements on an emergency basis.

“We’re looking at every option we have across the federal government and all of the federal agencies,” Granholm said.

In Georgia, Gov. Brian Kemp suspended state taxes on motor fuels through Saturday. Georgia collects a gasoline tax of 28.7 cents per gallon and a diesel tax of 32.2 cents per gallon.

“It will probably help level the price at the pump off for a little while,” Kemp said.

However, he urged people not to hoard gasoline, saying he expects the situation to be resolved soon.

“You don’t need to go out and fill up every 5-gallon can you’ve got,” the governor said.

Scattered gas stations in metro Atlanta were out of fuel Monday and Tuesday. In Georgia, nearly 6% of about 6,400 stations had run out of fuel, Gasbuddy.com said.