No, California, you don't need to stock up on gasoline

A man fills up a plastic container at a gas station

San Diego Union-Tribune

May 12, 2021 7:48 PM PT

California motorists have seen an uptick at the pump, but fuel analysts say the state has plenty of fuel — and there’s no reason for drivers to make a run to gas stations to fill up, as seen in the Southeast in the wake of the Colonial Pipeline cyberattack.

“Colonial has got nothing to do with California,” said David Hackett, president of Stillwater Associates, a transportation energy consulting company in Irvine. “There’s plenty of gas out here in California.”

Inventories for gasoline in the western region that includes California are down compared with this time last year, but that is to be expected because of the early days of 2020’s stay-at-home orders that led to empty freeways and a dramatic drop in gas consumption as millions stopped commuting to work and school.

But even as traffic in some areas has returned to something resembling pre-pandemic levels, gasoline inventory in the West is above the normal five-year range, according to data from the U.S. Energy Information Administration.

The story is quite different, though, in the South and along the Atlantic Coast, in the wake of the hack that shut down the Colonial Pipeline — and a panicked run on gas stations that has made the fuel shortage worse in those states.

As of late Wednesday afternoon, 52% of gas stations in Virginia reported fuel outages, according to GasBuddy.com, a tech company that helps drivers find the cheapest places to fill up. That’s up from just under 17% at the start of the day, indicating the shortage is worsening because motorists are rushing to fill up their tanks while they can.

By 5:23 p.m. Eastern Daylight Time, GasBuddy reported 48% of stations in South Carolina and 46% in Georgia said they were out of gas.

“It’s mind-boggling to see the amount of panic that was induced here,” said Patrick De Haan, GasBuddy’s head of petroleum analysis. “It became more about hoarding and panic than anything else.”

Good news, though, arrived Wednesday evening: Officials at Colonial reported the pipeline had resumed operations.

“Following this restart, it will take several days for the product delivery supply chain to return to normal,” a statement on the company’s website said. “Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period.”

The 5,500-mile conduit that runs from refineries in the Gulf Coast into Southeast states and up the Atlantic seaboard as far north as New Jersey had been out of commission since Friday.

A ransomware attack that U.S. officials believe is linked to a group in Eastern Europe calling itself DarkSide took down the pipeline.

The average price for a gallon of regular gasoline in the U.S. rose to $3.01 on Wednesday, according to AAA, the first time since November 2014 that gas cracked the $3 level nationally. In Atlanta, the price for a gallon of gas has gone up 30 cents in the last week.

The average price for a gallon of regular in California has gone up a nickel since last week, to about $4.11. In Los Angeles County, the average Wednesday was $4.16.

But fuel experts said the increase is not related to the Colonial Pipeline shutdown.

That’s because California’s specially formulated gasoline is largely produced by refineries within the state, plus a refinery in Washington state, said Jeffrey Spring, a spokesperson for the Automobile Club of Southern California.

In addition, a little more than 50% of the crude oil used to refine California’s gasoline comes from foreign sources, such as Saudi Arabia. The rest comes from California itself except for a small amount from Alaska.

“The only pipelines in California are going to other places in California, or they’re going to Nevada or Arizona — and those are outbound,” Spring said. “We don’t have any connection physically to refineries anywhere else in the country.”

Spring associated California’s recent increase in gas prices to short-term issues, such as flaring at local refineries that pinched production capacity as well as the annual switch to summer-blended fuel, which is more costly to produce by about 10 to 12 cents a gallon.

But over the last several months, the biggest reason for higher gas prices has been an increase in demand, as more Americans get vaccinated and get back on roads and highways — especially with the summer driving season approaching.

AAA’s travel advisors have seen an uptick in Memorial Day travel plans to places such as national parks. “People want to go outside and they want to stay outside,” Spring said. “Where someone might have hopped on a plane to go somewhere before, they’re now hopping in a car or truck and driving to a destination.”

In the meantime, the cyberattack has heightened concerns about ensuring the durability of energy infrastructure.

Kinder Morgan, the largest independent transporter of petroleum products in North America, operates the 566-mile Calnev pipeline system, which transports gasoline, diesel and jet fuel from Los Angeles to the Las Vegas area.

Melissa Ruiz, a Kinder Morgan spokesperson, said that the company’s crucial systems are fully redundant and that a cyber incident response plan “ensures if an incident occurs, the threat is identified, contained and eradicated.”

Hackett of Stillwater Associates said he thinks pipeline companies are “absolutely freaked out” by the hack.

“I’m quite confident they have all gone to battle stations to make sure [they understand] what went on at Colonial so they can share that information and then make sure they are armored up to prevent that from happening to their business,” Hackett said. “Their boards are asking them that question now.”

Nikolewski writes for the San Diego Union-Tribune.

No, California, you don’t need to stock up on gasoline

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