Pipeline Shutdown Has Had Little Impact on Supplies So Far

0
31
pipeline-shutdown-has-had-little-impact-on-supplies-so-far

HOUSTON — The shutdown on Friday of the most important petroleum pipeline between Texas and New York after a ransomware assault has had little speedy affect on provides of gasoline, diesel or jet gas. But some power analysts warned {that a} extended suspension might elevate costs on the pump alongside the East Coast.

Nationwide, the AAA motor membership reported that the average price of regular gasoline didn’t budge from $2.96 a gallon from Saturday to Sunday. New York State costs remained steady at $3, and in some Southeastern states like Georgia, that are thought-about notably susceptible if the pipeline doesn’t reopen shortly, costs moved up a fraction of a penny a gallon.

There’s been no signal that drivers are panic shopping for or that gasoline stations are gouging their prospects initially of the summer time driving season, when gasoline costs historically rise.

But some analysts warned of gasoline shortages if the shutdown of the pipeline, operated by Colonial Pipeline, continues into the week.

“Even a temporary shutdown will likely drive already rising national retail gas prices over $3 per gallon for the first time since 2014,” mentioned Jay Hatfield, chief government of Infrastructure Capital Management and an investor in pure gasoline and oil pipelines and storage.

The shutdown of the 5,500-mile pipeline that carries practically half of the East Coast’s gas provides was a troubling signal that the nation’s power infrastructure is susceptible to cyberattacks from prison teams or nations.

Colonial Pipeline acknowledged on Saturday that it had been the sufferer of a ransomware assault by a prison group, that means that the hacker could maintain the company’s information hostage till it pays a ransom. The company, which is privately held, wouldn’t say whether or not it had paid a ransom. It did say it was working to begin up operations as quickly as attainable.

Today in Business

May 7, 2021, 1:12 p.m. ET

One purpose that costs haven’t surged to date is that the East Coast usually has ample provides of gas in storage. And gas consumption, whereas rising, stays depressed from prepandemic ranges.

Still, there are some vulnerabilities within the provide system. Stockpiles within the Southeast are barely decrease than regular for this time of year. Refinery capability within the Northeast is restricted, and the Northeast Gasoline Supply Reserve, a provide held for emergency interruptions, incorporates solely a complete of 1 million barrels of gasoline in New York, Boston and South Portland, Maine.

That will not be even sufficient for a single day of common regional consumption, based on a report revealed on Saturday by Clearview Energy Partners, a analysis agency based mostly in Washington. “Much depends on the duration of the outage,” the report mentioned.

When Hurricane Harvey crippled a number of refineries on the Gulf Coast in 2017, suspending Colonial Pipeline flows of petroleum merchandise to the Northeast for practically two weeks, spot gasoline costs at New York Harbor rose greater than 25 p.c and took practically a month to ease.

Regional refineries can add to their provides from Kinder Morgan’s Plantation Pipeline, which operates between Louisiana and Northern Virginia, however its capability is restricted and it doesn’t attain main metropolitan areas north of Washington, D.C.

The East Coast has ample harbors to import petroleum merchandise from Europe, Canada and South America, however that may take time. Tankers crusing from the port of Rotterdam, the Netherlands, at speeds of as much as 14 knots can take so long as two weeks to make the journey to New York Harbor.

Tom Kloza, world head of power evaluation at Oil Price Information Service, mentioned the Biden administration might droop the Jones Act, which requires that items shipped between American ports be transported on American-built and -operated vessels. That would enable foreign-flagged tankers to maneuver extra barrels of gas from Gulf ports to Atlantic Coast harbors. The Jones Act is often suspended throughout emergencies like hurricanes.

“One could make the case that the Biden administration might consider such a move sooner rather than later if Colonial software issues persist,” Mr. Kloza mentioned.

LEAVE A REPLY

Please enter your comment!
Please enter your name here