Storm’s blackouts disrupt Texas fuel shipments to East Coast

The largest gasoline pipeline in North America restarted shipments of fuel from Texas to the East Coast with its diesel twin still down after Hurricane Nicholas’s winds knocked out power to almost half a million homes and businesses.

The blackouts that followed the storm’s landfall early Tuesday also crippled operations at a natural gas export terminal about 70 miles (113 kilometers) south of Houston. Ports up and down the Texas coast remained shut as the U.S. Coast Guard assessed sea channel conditions.

Margins on making gasoline rose as much as 3.2% after Colonial Pipeline Co. had to temporarily shut gasoline, diesel and jet-fuel lines that on a daily basis haul more fuel than the entire nation of Germany burns. It restarted its gasoline line mid-day Tuesday, with plans to restart the distillate line once product is made available, the company said in an emailed statement.

Nicholas, which struck shore as a Category 1 hurricane and has since lost strength, had largely moved east from the Houston area by mid-morning local time, allowing refiners, chemical makers and other industrial concerns to assess the physical impacts of rain and wind.

Colonial is a vital source of motor fuels for the eastern U.S. and prolonged shutdowns can leave filling stations dry in some markets. Lines 1 and 2—the cross-country conduits that were shut on Tuesday—haul more than 100 million gallons every day.

Other Impacts:

• Power outages were believed to have triggered the shutdown of Freeport LNG’s sprawling gas-liquefaction plant in the coastal hamlet of Quintana Island, Texas.
• In Texas City, a refining and chemical center along the shores of Galveston Bay, 100% of homes and businesses were without power, according to the local utility.
• Kinder Morgan Inc.’s fuel terminal in the Houston suburb of Pasadena resumed service Tuesday morning after it lost power Monday night, spokeswoman Melissa Ruiz said.
• Royal Dutch Shell Plc said its refining and chemical complex in suburban Houston appeared to have escaped the storm unscathed.