Harvey shuts down major fuel pipeline supplying East Coast

Harvey brings 'hell' to Texas residents
Harvey brings 'hell' to Texas residents

American energy supplies have suffered another blow from Harvey, the monster storm that's been battering the Gulf Coast.

The Colonial Pipeline, which carries huge amounts of gasoline and other fuel between Houston and the East Coast, is shutting down after Harvey forced the closure of refineries and some of the pipeline's own facilities.

The pipeline has two main lines that together transport more than 100 million gallons of gasoline, heating oil and aviation fuel as far as the New York harbor each day.

Its operator said the line that carries mainly diesel and aviation fuels will stop running Wednesday evening, and the line for gasoline, which is already operating at a reduced rate, will be suspended Thursday.

Related: Largest U.S. oil refinery forced to shut down as Harvey floods Port Arthur

Half of the 26 refineries that supply Colonial's 5,500 miles of pipeline are located between Houston and Lake Charles, Louisiana.

"Once Colonial is able to ensure that its facilities are safe to operate and refiners in Lake Charles and points east have the ability to move product to Colonial, our system will resume operations," the operator said.

Power outages during Hurricanes Katrina and Rita in 2005 forced the shutdown of parts of the Colonial Pipeline for several days. It also twice had to suspend services last year due to a leak and a fire.

Colonial noted that there are other ways of delivering fuel to limit the disruption to supply, including trucks, barges and other pipelines.

But pipelines are the safest and most cost effective way to move oil, gasoline, jet fuel and other petroleum products around the country. And in the massive underground interstate system that is the nation's pipeline network, the Colonial Pipeline is I-95.

Earlier Wednesday, the largest oil refinery in the country started shutting down as Harvey, which has now weakened to become a tropical depression, caused more catastrophic flooding along the Gulf Coast.

Related: The Harvey news is getting worse for gas prices

Thirteen oil refineries have been shut down or are in the process of closing, while several others are operating at reduced rates. Altogether, the disruption has knocked out about a fifth of the nation's refining capacity, according to S&P Global Platts.

That's led to a spike in U.S. gasoline futures, which reflect wholesale prices and eventually trickle down to consumers.

After gaining 6% during the day Wednesday, gasoline futures jumped a further 7% in the evening to more than $2 a gallon.

Harvey's impact on gasoline prices hasn't made much of a difference to prices at the pump yet. But gas stations will eventually have to respond by raising prices for consumers, at least temporarily.

Experts say pump prices could take weeks to come back down to earlier levels.

-- Matt Egan and Chris Isidore contributed to this report.

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