Why the Colonial Pipeline Shutdown Is Causing Gasoline Shortages

The attackers who hacked into Colonial Pipeline systems chose one of the most important segments of the U.S. energy infrastructure. The 5,500-mile pipeline, the largest in the U.S., carries gasoline and other products to 14 states and Washington, D.C., including nearly half of all fuel consumed on the East Coast. Colonial’s shutdown has caused gasoline shortages in states in the Southeast serviced by the line, highlighting the pipeline’s crucial role in U.S. energy distribution.

The federal government divides the nation into five regions for collecting data and analyzing patterns of fuel movement throughout the country. The East Coast petroleum-refining region, which covers the Northeast and Southeast, is the biggest net recipient of energy fuels from other regions.

Eastern states’ dependence on oil products piped in from elsewhere underscores the threat from the Colonial Pipeline hack. According to an Energy Department database, the East Coast has only seven refineries, with a total capacity of less than a million barrels a day. By contrast, Texas alone has more than 20 facilities. Eastern states depend on more than 30 coastal petroleum ports and a network of pipelines, the largest being Colonial.

The Colonial Pipeline started construction in 1962 and was expanded in the 1970s and ’80s. It comprises four main lines and several branch lines. The owner, Colonial Pipeline Co., is a privately held company based in Alpharetta, Ga., with 2019 assets of $3.2 billion.

The U.S. gasoline inventory as of May 7 would last 26.5 days, with 64.6 million barrels stockpiled on the East Coast. But drivers who were nervous about the cyberattack piled into gas stations, resulting in long lines and shortages. The average U.S. price of gasoline pierced $3 a gallon for the first time in 6½ years on Wednesday.