Wednesday evening, The Colonial Pipeline Company, which operates the nation’s largest pipeline system for refined petroleum, reported that the 5,500-mile system is finally operational, with service expected to return to normal by the end of the week. It had been four days since the pipeline collapsed in one historic – and scary–ransomware attack.
And yet, starting Thursday morning, cars continued to meander around gas stations along the East Coast, waiting their turn to fill up at the tank. It turns out that if you tell people that something is threatening their oil supply, they will panic and buy a lot. The National Convenience Stores Association reported Wednesday that stations are doing two to four times their usual job, with some retailers emptying several days of gasoline – about 16,000 gallons per station – in a matter of hours. That’s the kind of buying behavior the industry usually sees around hurricanes, says Jeff Lenard, the association’s vice president of strategic industry initiatives.
The panic buying has spread to areas that don’t even get their gas from the Colonial pipeline: On Wednesday, the association reported high sales as far south as Naples, Fla., An area that gets its gasoline from the Colonial Pipeline. cargo ships.
The pipeline closure has resulted in supply problems, according to industry executives. But many of the gas shortages at retail outlets happen because the oil is simply in the wrong place. Mostly unable to use the pipeline in recent days, the oil and gas industry has turned to other modes of transportation: rail, ships and, most importantly, tankers. Lots of tanker trucks.
Usually, tankers are the last part of the long journey of oil from the refinery to the fuel tank. Ships, rail lines and pipelines do most of the work, delivering gas to distribution terminals scattered across the country. Trucks complete the journey from the distribution terminal to one of the country’s 150,000 service stations. Due to the pipeline slowdown and rising demand around the world, truckers now have to run faster turnaround times and sometimes longer trips – up to 80 to 180 extra miles each time, according to Ryan Streblow, Acting President of National Tank Truck Carriers. , an industrial group.
However, there are only a limited number of trucks to pick up the pace, and a limited number of drivers. Thousands of tanker drivers are on the road this week, according to the National Tank Truck Carriers, carrying between 8,000 and 11,500 gallons of gasoline each. It will probably take several days before everything at the pump returns to normal.
In an effort to move gas faster, the federal government has granted area-specific exemptions allowing tankers to carry more gasoline than safety guidelines usually allow. It has also waived some hours-of-service rules, allowing drivers to stay on the road longer than usual.
Michael Belzer, an economist at Wayne State University who studies trucking, compares the state of the oil and gas industry to the type of supply chain issues many other sectors have been confronted with Covid-19 pandemic – of toilet paper at milk at wood. “Like everyone else in the Covid economy, you have supply chain dislocations,” he says, meaning products that aren’t where they’re needed. “It takes time to catch up with the slight increase in demand.”
Oil industry executives say it would be easier to get gas to the right places if there were more tanker drivers. In April, the oil industry group started warning of a shortage of drivers, especially in light of the expected increase in gas demand during the busy summer travel months. The industry has 10% fewer drivers than in 2019, Streblow said on Wednesday. “You magnify that challenge when you experience a disruption in the supply chain, and that’s what we have right now on the East Coast. So, therefore, he is even more stressed.