Dry pumps. Motorists circling gas stations. Local authorities rationing fuel among government agencies.
The six-day shutdown of the Colonial Pipeline, which depleted the fuel supplies of more than two-thirds of metro Atlanta service stations, showed just how vulnerable Georgia is to interruptions to its energy supply.
The cyberattack earlier this month made it painfully clear that, in a pinch, there are few practical alternatives to replace the pipeline’s massive capacity.
The state is far from alone. The 5,500-mile-long pipeline supplies about 45% of the East Coast’s gasoline, diesel and jet fuel. The Southeast is even more reliant. Colonial delivers more than 70% of transportation fuels to Georgia, South Carolina, North Carolina and Virginia, according to the federal Energy Information Administration, including to crucial arteries such as Hartsfield-Jackson International Airport.
Why Georgia’s fuel supply isn’t more diversified is shaped by a confluence of factors — and there are no easy fixes.
Unlike many states in the Gulf, Midwest and the Rockies, Georgia doesn’t produce or refine any oil, so all petroleum products must be transported here.
Pipelines, which pump fuel from refineries across long distances to customers, are often the most cost-effective option but face increasing opposition from elected officials, property owners and the public. Alternatives are expensive or still years away from widespread adoption.
Multiple government reports in recent years warned about the state’s dependency on pipelines. Gulf Coast storms, including hurricanes Katrina and Harvey, and a 2016 pipeline leak in Alabama previewed the havoc that could be wreaked if such systems are impeded.
“Georgia is extremely vulnerable to supply interruptions from weather and human interference,” a 2019 report from the state-run Georgia Environmental Finance Authority concluded.
Credit: U.S. IEA
Credit: U.S. IEA
While there are alternatives for transporting fuels, none of them comes cheap.
Trucking petroleum from the Gulf Coast is inefficient, since the vehicles are limited by how much they can carry. And transportation by rail can be pricey.
Meanwhile, the century-old Jones Act requires that all goods transported domestically via ships must be carried on U.S.-built vessels that are owned and operated by Americans. Such tankers can be expensive to build and operate, and it’s sometimes cheaper to import foreign oil.
Because of that, Georgia has relied on pipelines for transporting its oil — Colonial, built in the 1960s, and the smaller Products (SE) Pipe Line, built in the 1940s and known, until recently, as the Plantation Pipeline. The latter carries about 720,000 barrels per day compared to its competitor’s 3 million barrels. Both have headquarters in Alpharetta.
The Washington Post recently reported that the Transportation Security Administration, which oversees the country’s pipeline networks, plans to issue its first cybersecurity regulations in response to the Colonial Pipeline hack.
Such pipelines cost billions to build but are relatively cheap once they’re operational, since customers are essentially paying the electricity bill for pumping oil through the system.
Both the Colonial and Products pipelines typically run at or near capacity, according to industry analysts.
Colonial previously sought to expand its infrastructure in the Southeast, as did Kinder Morgan, the Texas company with a controlling interest in the Products pipeline. But both have ended up killing new pipeline plans in recent years either because of mounting costs and inadequate demand or opposition from state officials and landowners who didn’t want the infrastructure built near their property.
Critics argue pipelines are unsafe, citing the potential for leaks, water pollution and harm to property values. Locally, Colonial Pipeline leaked nearly 40,000 gallons of gasoline in the Morgan Falls area of Sandy Springs in 1998, and a year later one of the company’s storage tanks overflowed in Power Springs, spilling 42,000 gallons of gas near a shopping center and several homes.
But the industry’s boosters argue that pipelines are the cheapest, safest and among the greenest ways to transport fuels.
“The operation of a pipeline results in very little direct greenhouse gas emissions,” said John Stoody, vice president of government and public relations for the Association of Oil Pipe Lines. “You compare that to rail, where you have multiple diesel locomotives or trucks with a diesel engine for every truck.”
In Georgia, a group of unconventional allies, including conservative state legislators and environmentalists, joined forces in 2015 to stop a 360-mile pipeline proposed by Kinder Morgan.
The pipeline would have passed through Augusta and much of coastal Georgia, but complaints started pouring in from property owners along the proposed route. Kinder Morgan made a powerful enemy in Billy Morris, heir of the media empire Morris Communications, when two company surveyors were charged with trespassing on a Screven County property owned by his family.
Russell McMurry, the state transportation commissioner, denied the company’s request for eminent domain to seize private property from unwilling landowners.
Kinder Morgan ultimately suspended the project.
“Eminent domain is the issue that unites every rural interest in the state, including the Sierra Club,” said Neill Herring, a longtime Georgia lobbyist for the environmental group. “We’re not fighting a theoretical enemy ... These people with this power are so brazen and sloppy and unconcerned.”
That same year, Colonial announced it was shelving longtime plans to build a new line connecting the Gulf Coast to metro Atlanta.
The $1 billion project would have increased Colonial’s overall capacity by 30%, but the company faced constant questions as costs rose more than 300% and trends showed consumers driving less. Just as important, the oil shippers that would have used the pipeline wouldn’t commit to moving that kind of volume. That made it hard to justify the expense of the new pipeline to the company’s lenders.
For Colonial to build a pipeline, “our customers must support it and be willing to commit to shipping sufficient volumes on a new line; regulators must support it; and it must be buildable and economically viable,” a company spokesman told The Atlanta Journal-Constitution in 2016.
Instead, Colonial opted for smaller projects to boost capacity on its pipeline network, such as adding more powerful pumps and motors to push fuel through the system faster.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
Stakeholders disagree on the best course of action to avoid future supply hangups.
Some Republicans lawmakers used the Colonial cyberattack to hammer President Joe Biden for halting an extension of the Keystone XL Pipeline in the Great Plains, though the latter carries crude oil, which must be refined before it can be used as fuel or carried on a pipeline like Colonial’s.
Tom Kloza, global head of energy analysis at the Oil Price Information Service, said current fuel supplies are adequate under most circumstances. The situation following the Colonial shutdown would have been much more manageable, he said, had people not panicked and rushed to the gas station.
“It was like a rash moving up the East Coast,” he said. “Unfortunately, nowadays with social media, the more you tell the crowd to stay calm, the more they get absolutely whipped up.”
Meanwhile, many Democrats and environmental groups don’t want governments to invest in any additional fossil fuel infrastructure. They point to figures showing falling oil demand — Georgia’s peak consumption of motor gas was in 2005, according to the Environmental Finance Authority — and have pushed for focusing on electrification and renewable energy.
Andrew Lipow, president of the Houston-based consulting firm Lipow Oil Associates, points to a fundamental tension. Consumers have “voted with their pocketbooks to buy big SUVs and pickup trucks” and need the fuel, but there’s not enough political will to build additional pipeline capacity.
“People want their gasoline,” he said. “They just don’t want (the pipelines) near them.”
Staff writer Matt Kempner contributed to this article.
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