Panic drives up fuel demand as Colonial Pipeline shutdown continues
Secretary of Energy Jennifer Granholm compared stockpiling gas because of the Colonial Pipeline shutdown to the toilet paper hoarding seen early in the pandemic last year. Screen capture of White House livestream
The rush to fill up gas tanks after a cyberattack led Colonial Pipeline to abruptly shut down its operations has state and national leaders urging the public not to panic.
U.S. Secretary of Energy Jennifer Granholm told reporters Tuesday that she expects Colonial Pipeline to make a “full restart decision” by Wednesday for the rest of its system. The Alpharetta-based company, which supplies about 45% of the East Coast’s fuel, shut down its operations Friday following a ransomware attack.
The company has said it hopes to mostly ramp back up its system later in the week. Still, even when its system is fully back online, Granholm cautioned that it might take days for gas supplies to return to normal in Georgia and other southern states.
The more than 5,000-mile pipeline, she noted, has never been shut down like this before.
“I want to be clear that these states who are impacted, even with the turning on of the pipeline system, they still may feel a supply crunch as Colonial fully resumes,” Granholm said.
Georgia Gov. Brian Kemp joined the Biden administration in urging people not to stockpile fuel needlessly. Convenience store customers across Georgia were reporting fuel shortages by Monday evening, a problem that experts say is an overreaction to the situation.
The emerging crisis prompted Kemp to issue a state of emergency Tuesday and to temporarily suspend the state’s fuel taxes through Saturday as a way to help offset the rising price of gas. His executive order also prohibited price gouging and increased maximum weight load for fuel transportation.
The governor said the demand for fuel sharply increased as media coverage of the shutdown intensified early this week.
“We just need people to remain calm; just give us a few days,” Kemp said. “The company’s doing everything that they can to get the pipeline (running).”
But the potential long-term impact will depend on how much longer the system is out and whether other fuel sources can help satisfy the demand.
One potential source under consideration could come through a federal waiver. Department of Homeland Security Secretary Alejandro Mayorkas said Tuesday that his agency was preparing for a Jones Act waiver request, which would allow a foreign-flagged vessel to deliver fuel. The Jones Act normally dictates that only ships built domestically and staffed by U.S. crews move goods between U.S. ports.
“Much as there was no cause for, say, hoarding toilet paper at the beginning of the pandemic, there should be no cause for hoarding gasoline, especially in light of the fact that the pipeline should be substantially operational by the end of this week and over the weekend,” Granholm said.
“At the same time, it certainly is a reminder that we need to take a hard look at how we need to harden our necessary infrastructure and that includes cyber threats,” she added.
Mayorkas said the Colonial Pipeline ransomware attack is a “stark example” of the cyber security challenge facing the nation’s critical infrastructure that has been building for years.
“This threat is not imminent. It is upon us,” he said Tuesday.
The pipeline shutdown is likely contributing to higher prices at the pump. According to AAA-The Auto Club Group, by Monday, prices across Georgia rose an average of 6 cents per gallon. The average price for regular unleaded reached $2.76 in Georgia on Monday.
“This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally,” AAA spokeswoman Montrae Waiters said. “Areas including Mississippi, Tennessee and the east coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week.”
Angela Holland, president of the Georgia Association of Convenience Stores, also pinned the artificial demand for fuel on media reports about the Colonial Pipeline shutdown.
While a cyberattack is a new twist, she said the state has survived worse without panic at the pump. She pointed to 2016 when the fuel industry avoided any significant problems despite dealing with everything from major storms to a pipeline break.
Another major Georgia-based company, Plantation Pipeline, will continue sending fuel to some of the areas also served by Colonial, Holland said.
“We had four separate incidents within a span of eight weeks, and we didn’t see any widespread outages,” she said, referring to 2016. “It was all spotty shortages. There’s plenty of fuel. It’s just a matter of getting it to the market and meeting the demand.”
Georgia Recorder Deputy Editor Jill Nolin contributed to this report.
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