Oil shortage sweeps US while Colonial Pipeline continues to fall Oil and gas news

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Drivers on a wide east and south coast of the U.S. are struggling to find gasoline and diesel as gas stations are dry amid an unprecedented pipe disruption caused by a criminal hack.
From Virginia to Louisiana, convenience stores and gas stations around the corner are driving customers away, buying tanks in panic. The White House relaxed some environmental regulations to allow gas to flow from other parts of the country.
A fuel distributor in Washington DC has warned of a “catastrophic” shortage and warned government officials to order school buses to be taken off the roads.
Four days after the crisis began, Colonial Pipeline Co. has only managed to restart a small segment of the pipeline, and does not expect to be able to significantly restore service before the weekend.
Beyond that, Colonial has said very little about the next steps, leaving oil refineries and distributors in the dark about what could happen in the next 48 hours.
Pipeline-based companies are increasingly frustrated by a lack of transparency, according to a carrier who asked not to be named for discussion in trade talks.
“We are updating our carriers daily and sometimes twice, and we have had close relationships with law enforcement agencies and federal agencies to provide information about our restoration efforts,” the Colonial media relations office said in an email. “We will continue to keep all our stakeholders informed and continue to appreciate the outflow of support we have received across the industry.”
Average U.S. retail gasoline prices have risen from the highest to the highest since the end of 2014, hitting nearly $ 3 a gallon. This can add to wider inflationary pressures as raw material prices also increase from wood to copper.
“It’s going to be catastrophic,” said John Patrick Liberty Petroleum LLC’s chief operating officer. “Governors should declare a state of emergency and urge people chasing tanker trucks to gas stations to stay home. School buses are at a standstill. “
Gasoline is not the only petroleum-derived product under threat. In an effort to strengthen its aircraft fuel inventories, Southwest Airlines Co. It has started supplying to Nashville, Tennessee and other cities. To date, no Southwest flights have been affected by the closure of the pipeline; rather, the airline said it is “actively managing” fuel cells.
Colonial gas is the most important pipeline for the distribution of gasoline, diesel, and fuel in the U.S., connecting refineries along the Gulf Coast with population centers in Atlanta, New York, and beyond. [File: Colonial Pipeline via AP]
Colonial pipeline is the most important pipeline for the distribution of gasoline, diesel, and aircraft fuel in the U.S., connecting refineries on the Gulf Coast with population centers in Atlanta, New York, and beyond. It sends about 2.5 million barrels (105 million barrels) a day, a figure that exceeds total German oil consumption.
Essential economic life has closed since the end of Friday. Without a colonial system, many cities and airports are forced to look for alternative supplies imported by ships, barges, or trucks.
On Monday, the Federal Bureau of Investigation pointed a finger at a group of ransomware known as DarkSide. Although cyberattacks are increasingly being used as a weapon against geopolitical enemies around the world, there was no indication that the current crisis could boil over internationally. President Joe Biden has stopped blaming the Kremlin for the attack, even though some hackers or used software have been proven to be “in Russia”.
Russia has nothing to do with the cyber attack, Kremlin spokesman Dmitry Peskov told reporters on Tuesday.
Supplies
Federal environmental regulators are banning regulations that prohibit the sale of conventional gasoline where recast fuel is needed. They will also allow the sale of gasoline that does not meet the requirements to help smoke. Exceptions will apply until May 18 in Maryland, Virginia, Pennsylvania and Washington, DC.
In New Jersey, the Bolkema Fuel Company began tightly maintaining its depots as soon as news of the Colonial’s suspension was spread.
“It creates panic, you know, when you hear something like that,” Vice President John Bolkema said. ”I called an additional driver and said just run some extra load. Let’s increase the inventory and wait. “
Its supplier raised prices at least three times on Monday because other businesses wanted to get supplies, and Bolkema’s commercial customers are demanding other shipments to avoid depletion.
Colonial CEO Joe Blount and a senior lieutenant assured Monday that Undersecretary of Energy David Turk and state official that the company has full operational control of the pipeline and will not restart shipments until the rescue software is neutralized.
Website Down
On Tuesday, the Colonial’s website was down due to an unrelated issue with the hack, a spokesman said.
Fuel supply is declining as the national energy industry prepares to meet stronger demand for summer travel. The Americans have gone to the office again and are booking flights for a year of Covid-19 restrictions. Citigroup Inc. the company said there is a “temporary but high shortage” of fuel on the east coast as a result of the colonial closure.
At the first sign of a possible disruption in air travel, American Airlines Group Inc. said it was adapting two long-haul routes originating in Charlotte (North Caroline) to add fuel stops. Flights from Hawaii will call at Dallas-Forth Worth Airport, and flights to London will stop in Boston.
The east coast of the U.S. is losing about 1.2 million barrels a day due to disrupted gasoline supplies, according to a note from FGE industry consultants.
Lining
In North Carolina, Asheville, Aubrey Clements, a station clerk at Exxon Mobil Corp., answered the phone: “Hello, I’m out of gas.” An employee said the Elizabethton Marathon gas station had approximately two dozen cars waiting.
Drivers pulling to a station with a sign offering lead-free gasoline in Manning, South Carolina, were paid $ 2,649 per gallon when they came across pumps covered in yellow and red “out of service” bags. Approximately 7% of Virginia’s gas stations were estimated to be at the end of Monday, according to GasBuddy analyst Patrick DeHaan.
At an 18-minute virtual meeting, Blount said Colonial is working with refineries, marketers and retailers to prevent deficiencies, according to a person who was not allowed to speak publicly about the discussion. The pipeline supplies 90 U.S. military facilities and 26 oil refineries, the person said.
Roads from Texas to gasoline and diesel emergencies are already on their way to Atlanta and other southeastern cities by truck, and at least two Gulf Coast refineries have begun cutting production in hopes of starting to protect supplies at the nation’s oil refinery link.
The national average retail price of gasoline rose $ 2,985 per gallon, the highest since November 2014, according to the American Automobile Association. New York’s wholesale gasoline premium expanded to its highest in three months.
The event is just the latest example of critical infrastructure targeted by ransomware. Hackers are increasingly trying to access key services such as power grids and hospitals. The increased threats the White House had to respond to last month with a plan to increase the safety of public services and their suppliers. Pipelines are a specific concern because of the major role they play in the U.S. economy.
In ransomware cases hackers grow networks with malicious software that encrypts data and leaves machines locked until the victims pay the extortion fee. It would be the largest attack on U.S. fuel pipelines.
The Northeast may ensure the transportation of gasoline from Europe, but it will have an increasing cost as the pipeline is closed. Meanwhile, Marathon Petroleum Corp. fuel producers are growing alternatives to send their products to the northeast.
Overseas cities have the highest risk of fuel shortages compared to those with access to water shipments, said Steve Boyd, Houston’s Sun Coast Resources Inc. the general manager of the distributor, if the pipeline is maintained for more days, predicts a “massive increase” in demand.
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