McCrory takes action after pipeline explosion

Courtesy Alabaster Fire Department—Reuters
First responders are shown at the scene of Colonial Pipeline Co. explosion and fire on Oct. 31in Shelby

RALEIGH — On Tuesday, Gov. Pat McCrory announced that he issued regulatory waivers to allow easier transit of fuel after an explosion on Alabama on Monday killed one worker injured five others, and cut a critical supply line of gasoline for the East Coast. The governors of Alabama and Georgia waived shipping regulations as well. McCrory said the state gets 70 percent of its gasoline from the Colonial Pipeline. “Our administration is taking all necessary precautions to reduce the impact of the pipeline disruption on North Carolina,” said McCrory. “The Colonial Pipeline disruption is a transportation challenge, not a production challenge. With my executive order, we are waiving certain state requirements to facilitate truck transport of gasoline and to protect consumers from price gouging.”Colonial Pipeline confirmed that one line carrying diesel, jet fuel and other fuel was reopened and running at a reduced capacity. However, according to the governor’s office the pipeline fire is still burning and it will likely be 24 to 36 hours before Colonial crews can access the site to inspect the damage. Any shortage would happen between Tuesday and Friday this week with trucks scheduled to begin shipping to a wider service area on Wednesday.McCrory’s executive order waives maximum hours of service for drivers and temporarily suspends vehicle size and weight restrictions to facilitate the trucking of gasoline. McCrory also suspended all nonessential travel for state employees. Similar action was taken by the governor in the Colonial Pipeline leak last month.Meanwhile, shippers and fuel companies were scrambling to secure supplies via sea or other alternatives to get fuel to the East Coast. Fuel retailers and consumers are likely to be most affected, though prices at the pump have not risen yet, even as gasoline futures have spiked. The blast on Monday occurred several miles from its biggest gasoline spill in nearly two decades in September. That spill caused a 12-day interruption in the flow of about 1.3 million barrels per day of the fuel from the refining hub on the Gulf Coast to the Northeast. The shutdown will restrict gasoline supplies to millions of Americans in the Southeast and possibly the Northeast. The Northeast could be less affected since it can get supplies via waterborne shippers. In a news conference Tuesday, Colonial executive Gerald Beck said the crew was putting in a valve in order to finish repairs related to September’s leak when the explosion occurred. He said the U.S. Occupational Safety and Health Administration currently has control of the site. The fire is still burning, and Colonial expects to be able to get into the site in the next day or two — and from there, determine how long a repair will take. The 5,500-mile Colonial Pipeline is the largest U.S. refined products pipeline system and can carry more than 3 million barrels of gasoline, diesel and jet fuel between the U.S. Gulf Coast and the New York Harbor area. The worker who was killed was found on-site, but his name was not released. U.S. gasoline futures soared 15 percent to the highest since June on the shutdown, but pared gains sharply to 4.6 percent to settle at $1.4841 per gallon after Colonial said it could reopen the pipe by the weekend. Colonial said it would explore potential options to operate parts of its gasoline pipe, called Line 1, and would evaluate shipping gasoline on the distillates pipe, Line 2, which was briefly shut overnight by the incident. During the September outage, the company shipped some gasoline on the line that usually transports diesel and jet fuels. “If they are properly motivated, they can do the investigation and get the line up a lot quicker than the last one,” said Richard Kuprewicz, president of Accufacts Inc., a pipeline advisory firm, referring to the September outage. “My experience tells me that even with a fatality, I would not expect this to go as long as the last one.” Shippers using the East Coast supply artery were, however, bracing for a longer shutdown as Colonial said it was hard to predict a repair schedule. FATALITY COULD COMPLICATE RESTART The explosion occurred when a nine-man crew working on the line in Shelby County hit Line 1 with a large excavator known as a track hoe, Colonial Pipline Co. said. A representative for the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) said investigators were on the scene. Brigham McCown, who headed up PHMSA for two years under former President George W. Bush, said the fatality could complicate restart efforts in upcoming days as multiple state and federal agencies investigate the incident. However, he said the details of how the rupture occurred may help speed the timeline. “It’s important to get out there, get on site, figure out who had what equipment where and who was giving what orders,” said McCown. The explosion took place in an unincorporated wildlife area outside Helena, Ala. Colonial and the state’s forestry commission were leading the response. Danny Ray, fire chief in nearby Pelham, Ala., said at the news conference that they were able to contain the fire in part because nearby workers with bulldozers were able to build an earthen berm to contain the burning gasoline. Ryan Chandler, vice president at Colonial Group Inc, which is not connected to Colonial Pipeline, said he has been fielding calls from the pipeline’s customers seeking access to its Charleston and Savannah marine terminals. Chandler’s company manages three marine terminals in the U.S. Southeast and ships on the Colonial pipeline. He said during the September outage, business at the Savannah terminal jumped sevenfold, while Charleston jumped fivefold. For inland markets in the U.S. Southeast, which do not have access to ports, alternative supplies can be harder to get. The September spill led to long lines at the pump and a shortage of fuel in North Carolina, Georgia, Tennessee and Alabama.