AAA: Colonial Pipeline explosion to cause spike in gas prices

(CBS News)

ATLANTA, Ga. (AAA) — Drivers in the Southeast and Mid-Atlantic will likely see rising gas prices in the coming days, according to AAA Auto Group. Colonial Pipeline has suffered yet another setback, as a fire erupted in the same area where a leak occurred in September.

“We were just beginning to recover from the gas price hikes we saw from the pipeline closure in September,” says Garrett Townsend, AAA Georgia Public Affairs Director. “The explosion will at least temporarily put a halt to the pump-price dip we’ve experienced over the past 30 days.”

Colonial Pipeline shut down its Lines 1 and 2 in response to what they call an “integrity event.”

The gasoline explosion was reported on Monday in Shelby County, Ala., the same county where Colonial reported a gasoline leak in September. It’s believed the explosion could be related to repair and construction work on site.

Following the leak, Line 1 was shut for a few weeks, causing major supply issues in the Southeast and the Mid- Atlantic. Following the leak, state average gas prices rose 28 cents in Georgia (9/15-9/21) and 17 cents (9/15-9/24) in Tennessee.

Colonial’s Line 1 has a capacity of 1.3 million b/d of gasoline, and Line 2 has a 1 million b/d capacity for distillates shipping. An extended shutdown of both lines would have a major impact on supplies and prices from the Gulf Coast to East Coast. In September-October, Southeast and Mid-Atlantic faced supply run outs, with unbranded retailers bearing the brunt of the tight supply. The Southeast had to rely on long-distance truck deliveries from as far as Chicago and waterborne fuel deliveries.

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