UPDATE: The Colonial Pipeline has announced it has "initiated the restart of pipeline operations today at approximately 5 p.m. ET" on Wednesday, May 12. Colonial Pipeline says "it will take several days for the product delivery supply chain to return to normal" and "some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period."
This story was written before Colonial Pipeline restarted its operations. The contents below are as initially written.
The Colonial Pipeline first announced on Saturday, May 8, that it was a victim of a cybersecurity attack. It said at the time that it took systems offline to contain the attack, and in doing so temporarily halted all pipeline operations.
Given the company’s website claims the pipeline transports 45% of the fuel consumed on the east coast, various headlines and posts proclaimed a gasoline shortage in the eastern United States and “#GasShortage2021” trended on Twitter. People across the eastern seaboard have queued up in long lines at gas stations attempting to fill up their fuel tanks and in some cases hoard gasoline for the long haul.
THE QUESTION
Did the Colonial Pipeline hack lead to a gasoline shortage in the southeast?
THE SOURCES
THE ANSWER
Yes, but that claim needs context.
Gas stations on the east coast are experiencing a shortage, but the pipeline shutting down is only part of the reason why. A shortage in fuel tanker drivers, a switch in seasonal fuel blends and panic buying from consumers are all contributing to the issue.
The actual supply is fine, it’s just an issue of getting that supply to retailers and consumers. Once the pipeline is back online, gas stations should slowly be able to return to normal supplies over the next few weeks.
But the problem will be much worse if people continue to panic buy.
WHAT WE FOUND
There’s no doubt that gas pumps on the east coast are running out of fuel.
“Throughout the week we’ve been in constant contact with NACS members in the affected regions who are running low on fuel inventory or completely out,” the NACS said in its May 12 media update. But the factors leading to that are a bit more complex than just the pipeline shutting down.
“Technically, what we are experiencing is not a shortage but an issue related to distribution,” explained Jeff Lenard, NACS vice president for strategic industry initiatives, in an email to VERIFY. “However, we also know that if you really need fuel and can’t get it, it doesn’t matter what the situation is called.”
But that distinction does matter in how this will affect consumers. The supply of fuel in the country is unchanged by the pipeline’s shutdown, but now producers face an issue in getting that supply to consumers. The Energy Information Administration explained in its weekly report on petroleum that some refineries have already cut some production because of logistical constraints. The NACS has noted in its updates that there could also be delays down the road because it takes 15 to 18 days for fuel to move through the pipeline from Texas to New York.
The NACS has highlighted various waivers from the federal government that have helped gas stations’ attempts to keep up with demand, including waivers on weight limits for fuel trucks. But Lenard explained that those issues only help so much when there is also a shortage in truckers complicating the situation.
“Normally, retailers can expand their zone for finding supply when there are distribution challenges but that is a little harder now,” Lenard said.
Another contributing factor is the time of year this is occurring. The NACS explained in its May 10 update that gas stations are switching from winter-blend fuels to summer-blend fuels, which increase the cost of gas because of a longer production process that outputs less fuel per oil barrel. The NACS said inventories have been readied for the summer driving season and are replenished every five to six days.
On top of everything else, consumer demand has left gas stations unable to keep up.
“We know it’s human nature to want to have enough fuel for normal driving, but please don’t fill up every available container with gas,” Lenard said. “Not only does that take away fuel from those who need it, it also creates concern over transport and storage.”
He said gas stations are seeing two to four times the normal amount of demand, and areas that shouldn’t see fuel runs are seeing them anyway. He said that although Florida isn’t supplied by the Colonial Pipeline except for in the panhandle, he’s seeing panic buying as far south as Ft. Myers and Naples in southern Florida anyway.
“Panic buying or hoarding of gasoline will prolong outages and price spikes, making them much worse,” GasBuddy, a travel and navigation app specializing in fuel savings, said in a May 9 blog post. “It is true that if the pipeline remains out of service into the early part of next week, roughly Tuesday or so, that some gas stations may run low on gasoline. Tank farms that take the gasoline from the pipeline are likely starting to see supply run low, so it is vital that motorists do not overwhelm the system by filling their tanks.”
So what does this all mean for your ability to fuel up your car? GasBuddy’s blog post warned that it may take some time for things to normalize, particularly considering the panic buying that has already occurred.
“The longer the problem continues, the more it will likely affect motorists in the aforementioned states. Once the pipeline restarts, it will take days for normal conditions to occur. If motorists hoard gasoline, the problem may stretch for several weeks with continued outages and further pricing impacts.”
AAA, which updates the national average gas price more regularly than the EIA’s weekly updates, estimates the national average cost of gas is just over $3 per gallon now. That’s two cents higher than it was yesterday and eight cents higher than it was a week ago.
But there’s no need to hoard gas. The EIA said some of the pipeline’s smaller lines have resumed operations and Colonial Pipeline hopes to return service to its main pipeline by the end of the week. Lenard has said those smaller lines have already moved about 1 million barrels in the last few days.
And, once again, the fuel supply in the United States is fine. The issue is in distributing that supply. Once the pipeline is back online fully, the distribution process can begin to return to normal. It will slowly get easier for gas stations to restock their supply over the next few weeks at that point.
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