Consumers will once again feel the effects at the pump following an explosion along a stretch of pipeline in Shelby County, Alabama, according to Fitch Ratings. Those in the mid-Atlantic states are most likely to feel an impact in gas prices given their dependence on the Colonial Pipeline (Colonial) for refined products.
Consumers in the Northeast are less likely to be affected since the region receives refined products from Colonial as well as from imports, typically from Europe. Refined products are now being moved to impacted regions by truck and cargo ships from Europe and the Caribbean. Until supplies are flowing freely again, gasoline prices in impacted regions will remain elevated.
On Monday, a deadly explosion occurred on the Colonial Pipeline, which is the country’s largest refined products pipeline and has been in service since 1962. Colonial’s pipeline is a vital energy infrastructure along the East Coast, and refined products such as gasoline, jet fuel and diesel are moved from the Gulf Coast up to the Northeast.
A portion of the pipeline has been shut down in Alabama, meaning all delivery points north of the explosion will experience a shortfall in supply, prompting prices for refined products to temporarily spike. It is still unclear when the pipeline will reopen, but Colonial is targeting a reopening for this Saturday.
This is Colonial’s second time shutting down a portion of its pipeline in Shelby County in recent months. In September, the pipeline was partially shut down for 12 days after it was discovered that over 7,000 gallons of gasoline were leaking from its main gasoline line, several miles away from this week’s explosion. The line carries 1.3 million barrels per day, and the 12-day shutdown caused prices in certain mid-Atlantic states to spike by over 20 cents per gallon.
