Southeast Braces for Gas-Price Spike

In what's being called a supply "red alert," a part of the Colonial Pipeline that transports gas from Houston to New York—serving about 50 million people in 13 states daily, per CNN and the Wall Street Journal—has been shut down since Sept. 9, when a 250,000-gallon spill was discovered in a rural part of Alabama. The pipeline's operator isn't sure what caused the leak, which Reuters says is the biggest spill along the pipeline since 1996. The pipeline should resume full operation next week. Despite alternate methods of getting gas to the Southeast and East Coast, there will still be a shortage. "You're going to see some places without gasoline," says Tom Kloza, an oil analyst with Oil Price Information Service.

There are already gas-carrying ships lugging barrels from the Gulf Coast to New York, and Kloza says more tanker trucks will probably be sent out as well. But any method other than a pipeline is usually more costly, so even if gas does make it to a particular East Coast station, consumers will likely have to pay more at the pump, with those in Georgia, Alabama, Tennessee, North Carolina, and South Carolina expected to be among the first to reach deeper into their wallets. Gas prices usually drop in the early fall as stations switch to winter-blend gas, but consumers in hard-hit states may now instead see an average hike of anywhere from 5 cents a gallon to 20 cents a gallon, fuel analysts estimate. Meanwhile, markets further north, at the end of the pipeline, may not be hit as hard because they can get their gas elsewhere, says Kloza. (More gas prices stories.)