Data: S&P Global Platts; Map: Lazaro Gamio / Axios
Colonial Pipeline is shutting down its major arteries that bring large amounts of gasoline and other refined products to markets thousands of miles into the Northeast and states in between.
- "Once Colonial is able to ensure that its facilities are safe to operate and refiners in Lake Charles and points east have the ability to move product to Colonial, our system will resume operations," the company said, via CNN.
- More context: "Colonial was already running at reduced rates due to Harvey-related disruptions at its origin point in Texas, but the closure of the entire system threatens to escalate concerns about fuel supplies in the world's largest oil consumer," the Financial Times reports.
Why it matters: It's the largest refined petroleum network in the country. The announcement from the supplier of 100 million gallons daily last night will further restrict fuel supplies and networks battered by the massive storm's flooding.
Sums it up: "Record flooding in Texas is straining superhighway of energy trade," is the subhead of this in-depth Wall Street Journal look at how the storm has snarled the vast network of refineries, ports, pipelines, trucking routes, and other energy infrastructure along the Gulf Coast.
Price surge: AAA reported early Thursday that the average nationwide price of gasoline is now $2.45 per gallon, which is nearly a nickel above yesterday's price and 10 cents higher than it was a week ago.
State of refineries: S&P Global Platts, in its latest update Wednesday evening, said roughly 3 million barrels of refining capacity remains offline in Texas. Combined with other refineries running at reduced levels, over a fifth of the U.S. refining has been affected.
- However, some refiners including Valero and Marathon are beginning to resume operations in some facilities.
Important point: Paul Sankey, a top analyst at Wolfe Research, said in a note that the direct harm to various kinds of energy infrastructure and companies in the Houston region is only part of the story.
- "Expressions of unharmed infrastructure may prove to be meaningless — there is no way to get people to run much of this asset base, regardless of its condition," Sankey wrote.
Warning: Via Reuters, "Concerns over fuel shortages ahead of the U.S. Labor Day weekend were mounting, said analysts at JBC Energy."