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HURRICANE KATRINA
Gas pipelines down
Much higher prices, shortages possible

By STACY SHELTON , MICHAEL E. KANELL
The Atlanta Journal-ConstitutionPublished on: 08/31/05

Metro Atlanta drivers are facing the possibility of paying considerably more than $3 a gallon for gas by Labor Day — if they can get it at all.

The two pipelines that bring gasoline and jet fuel to the region are down — powerless to pump as Hurricane Katrina wreaked havoc on electrical infrastructure.

The metro Atlanta region generally has about a 10-day supply of gasoline in inventory, said BP spokesman Michael Kumpf. The pipelines have been down for two days.

Alpharetta-based Colonial Pipeline Co., cut off from its suppliers on the Gulf Coast, is now pumping gas from huge storage tanks, many in Powder Springs. Whether electric power can be restored to the pipeline pumps before supplies run out is "the great uncertainty ... that hangs over all of us," said Daniel Moenter, a spokesman for Marathon Ashland Petroleum, a major supplier of metro Atlanta's fuel.

Some suppliers are rationing gasoline to retailers, so some stations may already be near empty.
With supplies uncertain, oil companies and larger wholesalers are ratcheting up prices, partly to slow demand. Some local wholesalers already are paying 65 to 80 cents per gallon more than they paid three days ago. That kind of price increase will hit the pumps within a few days.
On Monday, the scare talk was about prices hitting $3 a gallon at the pump. By Tuesday, that line had changed for the worse, said Tex Pitfield, president of Saraguay Petroleum Corp., which delivers gas to retailers.

"Depending on how much damage has actually taken place and the time involved in getting the infrastructure up and running, is $4 a gallon out of the question? Not necessarily," he said.
Peter Beutel, an oil analyst with Cameron Hanover, told The Associated Press: ''This is the big one. This is unmitigated bad news for consumers.''

It's unclear how soon the pipeline outages may affect operations at Hartsfield-Jackson International Airport.

Fuel suppliers and airlines have 22 storage tanks at the airport that hold up to 27.6 million gallons of fuel. At full capacity, that's enough for about 10 days of fuel at the airlines' recent daily consumption rate of 2.8 million gallons.

No information was immediately available on how much fuel remains in the tanks.
Gov. Sonny Perdue's office is aware of the situation and is meeting with Georgia's fuel suppliers.
"We know that they're on top of this issue, and they're assessing damage to their production and distribution process in the wake of Hurricane Katrina," said Heather Hedrick, Perdue's press secretary.

Hedrick said it's too early to say whether Georgians should be concerned.
"In order to answer that question fairly, the governor needs a full briefing from fuel suppliers in Georgia," she said. "We're waiting for that information now."

Metro Atlanta motorists already pay a little more for gas than those in surrounding states because of a clean-fuel requirements to reduce air pollution.

Perdue issued a statement Tuesday saying those requirements would be lifted temporarily to increase supplies and lower prices, once the pipelines are again operational.

Perdue's decision, which awaits approval from the U.S. Environmental Protection Agency, would affect 45 counties in and around metro Atlanta.

"The governor felt it was important to take some steps to help alleviate gas prices that have been increasing for weeks now," Hedrick said.

Lisa Ray, a spokeswoman with the Georgia Emergency Management Agency, said the department is prepared to help deal with any gas shortages.

"We have talked to the Georgia Department of Agriculture, and they said supplies are not a problem in Georgia at this time," Ray said.

GEMA is a coordinating agency for emergency support functions.

— Staff writers Carlos Campos and Russell Grantham contributed to this article.