Drivers to feel Harvey fury at gasoline pump
- Author: Anthony Vega Sep 04, 2017,
Sep 04, 2017, 7:04
Gasoline shortages that can be attributed to tropical storm Harvey will begin to appear in other parts of the United States by Friday, pushing pump prices higher as the Labor Day holiday weekend begins.
Still, huge challenges remain for the nation's system of getting gasoline to the pumps of service stations, since Hurricane Harvey forced the shutdown of at least eight Texas refineries, according to AAA.
Colonial Pipeline Co, the biggest USA fuels system operator, on Sunday said it would address storm-related gasoline shortages by seeking federal approval to move nonsummer grade gasoline from Texas to the Northeast.
One of the most important pipelines that ships refined products to the Eastern Seaboard shut down on Thursday, which means that the U.S. Southeast, Mid-Atlantic, and Northeast could see supply disruptions and price increases.
ExxonMobil Corp said on Sunday that its Hadrian South subsea production system and Galveston 209 platform in the U.S. Gulf of Mexico were back online after shutting due to storm Harvey, a spokeswoman said in an email on Sunday.
Almost one-third of the nation's refining capacity is along the Gulf Coast from Corpus Christi to the Lake Charles, Louisiana, area, according to the Associated Press, and about one-quarter of the Gulf Coast's oil refining capacity was taken offline. Gov. Roy Cooper said the emergency declaration, which waives the maximum hours that fuel truckers can drive in North Carolina, will "make it easier to get gasoline into our state so North Carolinians who need gas can get it".
It knocked out about 4.4 million barrels of daily refining capacity - slightly more than Japan uses daily - and the signs of restarts were tentative. Crews will have to inspect the portions of the pipelines in Houston that are underwater to resume operations.
Whether prices will climb higher remains to be seen, although experts think that it's nearly a certainty.
Suppliers in Chicago were trying to secure supplies after the Explorer Pipeline, which typically carries about 350,000 barrels a day (bpd) to the region, shut down. The price spike is more dramatic in some states such as Georgia, where the average cost per gallon of regular gas has climbed from $2.22 a week ago to $2.39 now.
Gas prices have skyrocketed since Hurricane Harvey slammed into the Texas coast and shutdown refining and pipeline operations.
The U.S. average price for a gallon of regular gasoline rose from about $2.35 a week ago to $2.45 now, AAA reported.
The national average of $2.45 a gallon is the highest in two years.
Benchmark US gasoline prices and margins surged anew in overnight trading yesterday. The premium for Chicago-area gasoline above benchmark futures is at its highest since June 2016, while the Gulf Coast price is at its widest above futures since August 2012.
"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".
The Energy Department announced Thursday morning that the agency would pump 500,000 barrels of oil from the USA strategic reserve. The tanks that supply gas for the East Coast sit right off I-40 in Greensboro.