East Coast Gasoline Prices Plunge After Leaking Pipeline Bypass Completed

In what was clearly not 'government work' Colonial has completed the bypass of its leaking pipeline early and has told shippers it will restart supplies tomorrow. This has sent near-term gas prices to the east coast tumbling. Great news amid claims from Alabama's governor of price-gouging by retail gas suppliers.

As Bloomberg reports, Colonial Pipeline has finished construction, fabrication and positioning of bypass connector pipeline segment around leak site west of Pelham, Ala., co. says in e-mailed statement.

  • Colonial in process of carrying out hydrostatic test of new segment
  • Segment is approx. 500ft in length
  • Co. says it will take “several days” for fuel delivery supply chain to return to normal when Line 1 restarts
  • Some markets should expect intermittent service interruptions

But the market is pricing out disruptions...

This is great news as OilPrice reports several US Governors warned against price-gouging as shortages loomed...

Georgia Governor Nathan Deal signed an executive order against unjust price hikes after gasoline prices spiked 20-40 cents across the state following a pipeline leak in Helena, Alabama.


The order emphasizes the terms of an existing law that forbids gouging during “a state of emergency” by permitting price changes only as a reaction to the higher cost of fuel or fuel transportation.


An increased demand for gasoline—as is the status quo in Alabama, Georgia, Tennessee and the Carolinas after a 252,000-barrel leak in Colonial Pipeline Company’s line last week—is not considered a valid reason to raise prices under the law.


Last week, GasBuddy reported that the average price of a regular gallon of gas in Georgia stood at $2.17. The same site said the state’s average gallon price today is $2.35.


Citizens in affected states have been encouraged to report unusually high prices to the relevant authorities, which, coupled with the Governor’s announcement, has likely prompted prices to self-correct under the weight of the law.


The Governor of North Carolina approved a similar executive order in the wake of the September 9th detected leak and the supply shortages it has caused since.


"Based on our ongoing updates from Colonial, the construction of a bypass pipeline is moving forward which will soon allow fuel supply operations to return to normal," said Governor Pat McCrory.


"In the meantime, my executive orders remain in effect to protect motorists from excessive gas prices and minimize any interruptions in the supply of fuel."


Colonial now says the new bypass line will be in operation by the end of next week, after it received the necessary approvals from federal regulators to begin construction. Initially, the Georgia-based firm did not provide a timeline for the process.


Washington D.C. and eleven states located on the leaked pipeline’s route have received waivers from the Environmental Protection Agency to sell gasoline formulations banned under the Clean Air Act in order to alleviate the affects of the ongoing shortage.

And even better, National RBOB prices have also tumbled back to recouple with WTI...