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Georgia Gas Prices Rise As Key Pipeline Shuts Down

Gasoline drips from a nozzle at gas station Thursday, Feb. 23, 2012, in Lake Oswego, Ore. Oil prices hit a new nine-month high Thursday as the dollar fell and U.S. gas pump prices climbed closer to $4 a gallon, the highest ever for this time of year. (AP Photo/Rick Bowmer)
Gasoline drips from a nozzle at gas station Thursday, Feb. 23, 2012, in Lake Oswego, Ore. Oil prices hit a new nine-month high Thursday as the dollar fell and U.S. gas pump prices climbed closer to $4 a gallon, the highest ever for this time of year. (AP Photo/Rick Bowmer)
Credit Rick Bowmer / Associated Press

Hurricane Harvey damage assessment leads to the shutdown of two pipelines out of Houston. That's causing prices at the pump to rise.

Colonial Pipeline is shutting down a key line that supplies gasoline to the South due to refinery shutdowns and other impacts from Tropical Storm Harvey, meaning prices at the pump could rise even more in many states.

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The pipeline, a crucial artery in the nation’s fuel supply network, provides nearly 40 percent of the South’s gasoline. It supplies 75 percent of metro Atlanta’s gasoline. The other 25 percent Atlanta gets from the Plantation Pipeline. It runs out out of Louisiana, and it’s still operating.  

Gasoline prices have been on the rise even before the pipeline shutdown. Harvey’s devastating strike on the Gulf Coast has prompted one of the summer’s largest one-week price surges, AAA reported.

Among the reasons: About one-quarter of the Gulf Coast’s oil refining capacity was taken offline, according to the Oil Price Information Service.

“We’re seeing increases of anywhere from 10 to 15 cents the past couple of nights, each night – but you will see retail prices will climb over the next few days,” said Joe Crain, whose company Crane Oil supplies convenience stores with gas and diesel fuel.

So how high will prices at the pump rise?

“I would not be surprised to see some gas in this area get to near $2.70 per gallon,” he said.

Crain is not expecting a supply crunch because distributors at the Doraville terminals, where tankers fill up, are taking a cautious approach.

“Until they know everything is okay, they don’t want everybody to rush and take all of it they’ve got, and deplete their supply,” he said. “So they kind of try to start playing a little defense, and managing their product.”

Colonial Pipeline has not indicated how long it expects the closure to last. Its workers haven’t been able to evaluate the damage yet.

Half of the 26 refineries that connect to Colonial’s pipeline system are between storm-ravaged Houston and Lake Charles, which is just east of the Beaumont-Port Arthur metro area.

“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 company said in its statement.

The Colonial Pipeline runs from the Houston area to the New York harbor and includes more than 5,500 miles of pipeline, most of it underground.