The Colonial Pipeline system spans more than 5,500 miles and transports about 45% of all fuel consumed on the East Coast. It transports 2.5 million barrels per day of gasoline, diesel, jet fuel and home heating oil.
“We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations,” it added in a statement.
The shutdown could extend a recent jump in gasoline prices — especially if the outage persists — piling on the pain for drivers as the seasonal peak in demand approaches.
“The number of days that the line is out of service is critical,” Tom Kloza, global head of energy analysis for the Oil Price Information Service, which tracks gas prices at 140,000 US stations, told CNN Business.
Limited supply could mean higher fuel prices for motorists during the spring driving season. US gasoline futures for May delivery gained 1.5% on Monday, rising to $2.16 a gallon. Prices had spiked as much as 4% in early trading.
Analysts at GasBuddy, which tracks over 150,000 gas stations in North America, said that it will take days for normal conditions to return even after the pipeline is back online.
“It’s very difficult to pin the exact amount prices may rise, but for now, it appears to be a few cents per gallon, possibly growing more significant if the pipeline remains shut down for more than 2-3 more days,” wrote the analysts.
Andy Lipow, Houston-based oil consultant and President of Lipow Oil Associates, emphasized that the timeline is crucial. “Two days can be made up in orderly fashion,” he said of the current shutdown. Five days, however, could be a much more significant blow to logistics.
The attack could also trigger challenges for jet fuel deliveries, Kloza said. Many major East Coast airports maintain only three to five days worth of inventory, so a two to five day suspension of a pipeline that in some cases moves fuel directly to major airports — such as Atlanta’s Hartsfield Jackson Airport — can have a dramatic impact.
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