• ITVI.USA
    15,617.100
    -3.950
    0%
  • OTRI.USA
    22.450
    -0.220
    -1%
  • OTVI.USA
    15,623.470
    -3.010
    0%
  • TLT.USA
    2.760
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    3.450
    -0.070
    -2%
  • TSTOPVRPM.CHIATL
    2.920
    -0.040
    -1.4%
  • TSTOPVRPM.DALLAX
    1.580
    -0.030
    -1.9%
  • TSTOPVRPM.LAXDAL
    3.210
    -0.130
    -3.9%
  • TSTOPVRPM.PHLCHI
    2.040
    -0.060
    -2.9%
  • TSTOPVRPM.LAXSEA
    3.800
    -0.060
    -1.6%
  • WAIT.USA
    127.000
    2.000
    1.6%
  • ITVI.USA
    15,617.100
    -3.950
    0%
  • OTRI.USA
    22.450
    -0.220
    -1%
  • OTVI.USA
    15,623.470
    -3.010
    0%
  • TLT.USA
    2.760
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    3.450
    -0.070
    -2%
  • TSTOPVRPM.CHIATL
    2.920
    -0.040
    -1.4%
  • TSTOPVRPM.DALLAX
    1.580
    -0.030
    -1.9%
  • TSTOPVRPM.LAXDAL
    3.210
    -0.130
    -3.9%
  • TSTOPVRPM.PHLCHI
    2.040
    -0.060
    -2.9%
  • TSTOPVRPM.LAXSEA
    3.800
    -0.060
    -1.6%
  • WAIT.USA
    127.000
    2.000
    1.6%
Driver issuesFuelNewsTop StoriesTrucking

News Alert: Colonial Pipeline announces restart; operations coming back Wednesday

In Wednesday afternoon announcement, company says it may take ‘several days’ to get back to normal

The Colonial Pipeline said Wednesday it is resuming full operations but may take several days to get back to normal.

The restart began at 5 p.m. Wednesday, it said, a little more than five full days after the company first announced it was the target of a cyberattack and was shutting down. The line carries more than 2 million barrels per day of petroleum products, including gasoline and diesel, from the Gulf Coast area to the Southeast, Mid-Atlantic and Northeast.

“Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period,” Colonial said in its statement. “Colonial will move as much gasoline, diesel and jet fuel as is safely possible and will continue to do so until markets return to normal.”

The announcement Wednesday marks the beginning of the end of the Colonial saga that saw gasoline lines pop up, stations close and the federal government taking steps to alleviate problems caused by the shutdown, including granting an hours-of-service waiver to drivers involved in moving emergency fuel supplies.

Colonial’s announcement was something of a surprise. Earlier in the week, it had said it might be able to resume operations Friday. On Tuesday, Secretary of Energy Jennifer Granholm said at a White House press briefing that Colonial had told her it would be in a position to confirm the Friday reopening by Wednesday. Instead, it not only confirmed the reopening; it moved it up two days.  

The announcement came after an eventful day in market reaction to the pipeline shutdown. Some of the developments may turn out to be moot, but others may continue to be a factor until supplies start getting back into the system.

— While information on the number of diesel outages has been more difficult to come by than data on gasoline shortages — thanks mostly to the widely watched information coming out of the Twitter feed of GasBuddy — Racetrac is providing a detailed list of what supplies are available through its network of almost 750 gasoline stations and convenience stores. At approximately 3:30 p.m. Eastern time, the company’s station-by-station breakdown listed more than 100 outlets with no diesel availability. At the beginning of the day, it was about 65. In a midday update published by Pilot Flying J, it listed five truck stops as having no diesel and two that did not have gasoline or diesel. Those same numbers were in place Tuesday evening. But in the fluid nature of this supply squeeze, the lists of truck stops that were out had partially changed overnight, with some outlets that had no supply Tuesday no longer on the list, replaced by new ones that had run out. At Love’s, a list of outlets with no diesel that stood at three Wednesday morning had risen to eight by midafternoon Wednesday. Additionally, a list of outlets that were at risk of running out of supplies of gasoline or diesel — which fuel was at risk was not specified — had grown considerably since the morning.

— At a press briefing pulled together Wednesday afternoon by key trade groups in the petroleum supply chain, Rob Underwood, the president of the Energy Marketers of America, said a request has been submitted by the groups to widen the HOS waiver to a nationwide waiver for those involved in the transport of fuel. “This is a severe issue across the country, and the best thing the Biden administration could do is a national hours-of-service waiver,” Underwood said.

— One of the more featured individuals on the call was Ryan Streblow, interim president of the National Tank Truck Carriers. It is his member companies that are taking fuel from terminals to retail outlets and are now being called upon to move fuel even greater distances than normal. The Tank Truck Carriers made news several weeks ago when it chimed in on the issue of an inadequate number of drivers, specifically in his group’s area of activity. The Colonial shutdown has only exacerbated the situation, he said. Tank truck drivers previously might do a “turn” of roughly 120 miles in length. “But now they’re being asked to do 200- or 300-mile turns, so we have delays,” Streblow said. He said the group’s petroleum carriers are “doing everything they can,” but “safety comes first.” Earlier in the day, Patrick DeHaan, the head of petroleum analysis at research firm GasBuddy, said he had not seen significant drops in supply at the wholesale depots, known as the rack. “This seems to be turning into a not-enough-truck-drivers-to-get-it-there story,” he tweeted.

Streblow recapped the situation with tank truck drivers, which reflects what is going on in all driver categories. Fuel sales are about where they were in 2019, he said. In between, “as we went through 2020, we had an exit of petroleum truck drivers from the industry as the American people stopped traveling,” Streblow said. Some were furloughed; others retired early. CDL schools stopped producing new hazmat drivers. The number of petroleum drivers is down about 10% compared to two years ago, carrying roughly the same amount of fuel as 2019 before the Colonial shutdown. 

But the demand for their services has soared in recent days. Ryan McNutt, the CEO of the Society of Independent Gasoline Marketers of America, said many of SIGMA’s locations might only get a delivery every two days in the past. “But now you’re seeing several days worth of product move in a couple of hours, and to try and refill the tanks becomes extremely challenging,” McNutt said. 

— Whether commodity market prices are being impacted by the shutdown is not easy to determine. The price of ultra low sulfur diesel on the CME commodity exchange rose Wednesday by 1.36% to $2.0695 a gallon. But if that was being driven by the Colonial shutdown, the price of RBOB gasoline should have been up by roughly the same amount. It wasn’t; the price of RBOB was up just under 1%. The price of global benchmark Brent crude was up more than 1.1%, and its market would be weakened by the shutdown should refineries start to cut runs with no place to take their product. ULSD prices Wednesday were impacted by the weekly Energy Information Administration inventory report, which showed ULSD inventories at their lowest level in a year. However, the weekly inventory numbers were not far off their five-year average for the first report of May.

More articles by John Kingston

Diesel outages starting to rise in Southeast on back of Colonial closure

Renewable fuel requirements threaten to play bigger role in diesel price

Jobs report shows getting drivers into the pool remains a struggle

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.

Leave a Reply

Your email address will not be published. Required fields are marked *

We are glad you’re enjoying the content

Sign up for a free FreightWaves account today for unlimited access to all of our latest content

By signing in for the first time, I give consent for FreightWaves to send me event updates and news. I can unsubscribe from these emails at any time. For more information please see our Privacy Policy.