tiptrot.com June 22, 2018

Valero Says Pipeline Blocking Its Efforts to Ship More Fuel After Harvey

04 September 2017, 06:56 | Cedric Leonard

Valero Says Pipeline Blocking Its Efforts to Ship More Fuel After Harvey

Valero Says Pipeline Blocking Its Efforts to Ship More Fuel After Harvey

Huge challenges remain for the nation's system of getting gasoline to service station pumps, since Hurricane Harvey forced the shutdown of at least eight Texas refineries, according to AAA. Colonial Pipeline, which operates the pipeline that moves almost 40 percent of the South's gasoline, estimates that it will resume carrying fuel through Texas by Sunday.

Retail gasoline prices have risen by 17 cents a gallon since August 25, the day Harvey first made landfall, and the motor fuel is likely to extend its rally, according to an AAA forecast. The Colonial Pipeline runs from the Houston area to the NY harbor and includes more than 5,500 miles of pipeline, most of it underground.

The closure of key refineries and some of the pipeline's own resources by Hurricane Harvey facilitated the partial closure.

According to The Wall Street Journal, flooding in Texas has led to fuel shortages across the state from Austin to Dallas and disrupted the flow of petroleum from the Colonial Pipeline that moves gasoline, diesel and jet fuel to the East Coast.

Many drivers said the long lines at the pump have shortened a bit each day, giving many North Texans hope as they enter the holiday weekend. The Pipeline originates in Houston and supplies the East Coast.

According to the WSJ, the Colonial Pipeline is the biggest fuel pipeline in the United States, stretching 5,500 miles through 12 states.

One Chevron station in downtown Dallas that sold regular gas for $2.29 a gallon just before the storm was charging $2.99 on Thursday.

Tropical Storm Harvey's impact on the energy industry spread worldwide as flooded US refiners and closed fuel pipelines threatened to squeeze national supply, roiling global fuel markets and rerouting millions of barrels of fuel to the Americas to avert shortages.

The AAA said early Wednesday - the latest data available - that retail gasoline prices were up 6 cents from a week ago at $2.404 per gallon of regular gasoline nationwide. In South Carolina, gas is up 23 cents. The national average is on pace to top $2.50 per gallon, coinciding with the busy Labor Day travel period.

Alabama's average Thursday was $2.21, up from Wednesday's average of $2.16. Colonial Pipeline said that its pipelines 1 and 2 continue to operate from Lake Charles to the East Coast, but deliveries will be "intermittent and dependent on terminal and refinery supply". Gasoline prices jumped a nickel overnight across the Washington metro area and the state of Virginia, and pump prices jumped seven cents within the past 24 hours in Maryland. Two refineries in the Gulf Coast region were operating at reduced rates.

"The refineries were built on the Gulf Coast with the idea that we're going to import", said Sandy Fielden, director of oil and products research at Morningstar in Austin, Texas, "That's why we're having problems today because that's where they were all built". Major refineries in the country have been shut, the largest USA pipeline of refined products has gone offline, crude oil production outages and logistical bottlenecks have led to a release from the Strategic Petroleum Reserve, and motorists will be pinched when filling up at the pump for some time.

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