Gas Prices and Crude Oil Problems with the Colonial Pipeline

The pipeline has a capacity of 1.4 million barrels a day, and was expected to come back online, but on Thursday the company delayed the restart until next week.

Both Georgia and Alabama have declared states of emergency because of the pipeline leak.

Almost a week after a section of a key gasoline pipeline was closed in Alabama, officials are saying the issue could lead to higher prices at the pump and temporary outages in East Tennessee until next week.

Prices on futures contracts for wholesale gasoline rose about 2 percent Friday to $1.46 a gallon after rising 5 percent on Thursday.

A leak in an Alabama pipeline is causing local fuel shortages.

The company has not yet given an explanation for the leak and Colonial Pipeline spokesman did not say how much gasoline was usually provided to Alabama service stations because it was confidential company information.

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The disruption will reverberate throughout the East Coast: gas prices are poised to rise as much as 20 cents in SC and up to in Georgia, North Carolina, Tennessee and Virginia, according to . The first states projected to be affected by shortages are all close to the leak - Alabama, Georgia, Tennessee, North Carolina and SC.

Although oil refinery maintenance this season may slightly lift prices, Kloza said he expects gas to stay fairly cheap. Georgia Gov. Nathan Deal has also issued a state of emergency. And the U.S. Environmental Protection Agency has sought to ease supply shortages by relaxing limits on the blend of gasoline that can be used across 18 counties in Georgia and Tennessee.

According to press releases from Colonial Pipeline Company, someone noticed the smell of gasoline on Friday, September 9 in rural Shelby County, Alabama near one of Colonial Pipeline's pipelines in the area. "It was 6,000 barrels but they said they can't figure it out yet", said Kilduff.

"I think crude oil is just being dragged with the products", said Andy Lipow, who heads the Houston oil consultancy Lipow Oil Associates. Colonial said work crews would begin excavation work Friday and repairs would continue through the weekend.

The pipeline's operator has said full service will not be restored until at least next week. Probably little effect in NY and New England, he said.

"You're looking at a lot of terminals that are running pretty tight on gasoline supply and ... it's becoming an issue where motorists are starting to feel it with their wallets", said Patrick DeHaan, petroleum analyst at Gasbuddy.


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