U.S. government approves Colonial
Pipeline restart after leak
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[September 21, 2016]
By Devika Krishna Kumar and Jarrett Renshaw
NEW YORK (Reuters) - The U.S. government
approved a Wednesday restart for Colonial Pipeline Co's main gasoline
pipeline, authorities said on Tuesday, after the line's biggest leak in
nearly two decades caused supply shortages that pushed pump prices
The largest gasoline conduit in the United States was partially shut
down after a leak was discovered on Sept. 9 in Alabama, and motorists
have since suffered long waits to fill up at forecourts across the
U.S. gasoline futures tumbled 5 percent on news of the restart. Gasoline
futures had surged 9 percent and spreads had rallied last week after the
The U.S. Department of Transportation Pipeline and Hazardous Materials
Safety Administration (PHMSA) issued a written approval for restart of
the line late Tuesday. Earlier in the day, Reuters reported that the
approval was forthcoming, citing an official familiar with the matter.
The line carries 1.3 million barrels per day of gasoline from the
refining hub on the Gulf Coast to the East Coast.
Colonial has built a 500- to 700-foot (150-210 meter) bypass line to
resume full operations of Line 1.
The line is expected to operate at reduced pressure around the damaged
section, but the company said it could still maintain normal flow rates.
A Colonial spokesman declined to comment on the approval.
The leak, discovered by a mining inspector who smelled a fuel odor in
Helena, Alabama, released about 6,000 to 8,000 barrels (252,000-336,000
gallons) of gasoline. The cause of the leak remains unknown.
When Line 1 restarts, it will take several days for the fuel delivery
supply chain to return to normal, and some markets served by the
pipeline may experience "intermittent service interruptions," Colonial
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Out of fuel signs are pictured on gas pumps at a Mapco gas station
at Spence Lane and Lebanon Pike in Nashville, Tennessee, U.S.
September 17, 2016. REUTERS/David Mudd
Retail prices may continue to climb until supply kinks are
Georgia has been the hardest hit, with gasoline prices rising 4.5
cents from Monday to Tuesday. At $2.361 per gallon of regular
gasoline, the cost of fuel has risen by more than 25 cents in a
week, compared with an increase of just over 3 cents nationwide,
according to motorist advocacy group AAA.
North Carolina Governor Pat McCrory welcomed news that the line
would likely restart on Wednesday.
"North Carolina is currently receiving about one-third of our normal
supply of fuel," he said at a news conference in Charlotte on
The industry has sought to plug the supply gap with shipments by sea
into the U.S. East Coast. Waterborne shipments rose by about 58
percent and volumes rose by 23 percent between Sept. 9 and Sept. 15
compared with the previous three weeks, according to data from
Panjiva, a trade data company which tracks imports and exports.
About half of the 10 gasoline shipments to the East Coast during the
period were from the U.S. Gulf, Panjiva said.
(Reporting by Devika Krishna Kumar in New York, Colleen Jenkins in
Winston-Salem, North Carolina; Additional reporting by Barani
Krishnan; Editing by Cynthia Osterman and Leslie Adler)
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