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UPDATE: Colonial pipeline expected to carry fuel by Sunday

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UPDATE: ATLANTA (AP) - The operator of a major gasoline pipeline estimates it can resume carrying fuel in the Houston area by Sunday, potentially avoiding a lengthy shutdown that would intensify gasoline shortages.

The Colonial Pipeline provides nearly 40 percent of the South's gasoline. It runs underground and is now under water in many parts of Texas, where inspections are needed before it can be fully operational again, Colonial spokesman Steve Baker said Thursday.

READ MORE | City council votes to allow payback from Colonial Pipeline for Shoal Creek cleanup

The Georgia-based company remains able to operate its pipeline from Louisiana to states east and northeast of there, though deliveries will be "intermittent," the company said.

Huge challenges remain for the nation's system of getting gasoline to the pumps of service stations, since Hurricane Harvey forced the shutdown of at least eight Texas refineries, according to AAA.

Pump prices have surged - the average for a gallon of regular gasoline rose from about $2.35 a week ago to $2.45 now, AAA reported. The price spike is more dramatic in some states such as Georgia, where the average cost per gallon of regular gas has climbed from $2.22 a week ago to $2.39 now.

Nearly one-third of the nation's refining capacity is along the Gulf Coast from Corpus Christi, Texas, to the Lake Charles, Louisiana area, and about one-quarter of the Gulf Coast's oil refining capacity was taken offline, according to the Oil Price Information Service.

The supply crunch is already being felt in Dallas-Fort Worth, where QuikTrip, one of the nation's largest convenience store chains, is temporarily halting gasoline sales at about half of its 135 stores in the area.

The company is instead directing gasoline deliveries to designated stores across all parts of the metro area, QuikTrip spokesman Mike Thornbrugh said. And while only half the Dallas-Forth Worth area stores will have gasoline, all will remain open, he said.

"Supply is way, way off," Thornbrugh said Thursday.

The Oklahoma-based company diverted gasoline deliveries in a similar way last year in metro Atlanta, where it has about 133 stores, after the Alabama pipeline spill.

The Colonial Pipeline, a crucial artery in the nation's fuel supply network, runs from the Houston area to New York harbor and includes more than 5,500 miles of pipeline, most of it underground. It closed in September 2016 after a leak and gas spill in Alabama, leading to days of empty gas station pumps and higher prices in Alabama, Georgia, Tennessee and the Carolinas.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


PREVIOUS STORY: The main pipeline carrying fuel from Texas to the East Coast is temporarily shutting down because of refinery outages related to Hurricane Harvey, the company that runs the pipeline said Wednesday night, dealing a potentially major blow to the already storm-ravaged U.S. fuel system.

Colonial Pipeline Co., the biggest fuel transporter in the United States, said in a brief statement that "storm-related refinery shut-downs and the impact to Colonial's facilities" west of Lake Charles, Louisiana, had led it to close its line carrying diesel and jet fuel late Wednesday. It said it would close its line carrying gasoline on Thursday.

READ MORE | City council votes to allow payback from Colonial Pipeline for Shoal Creek cleanup

The pipeline transports more than 3 million barrels of diesel, gasoline and jet fuel each day from Houston to New York Harbor, making it the main provider for major cities like New York, Atlanta and Washington, D.C.

The news immediately sent U.S. gasoline prices to a two-year high, Reuters reported Wednesday night.

"Imports can't make up for this," it quoted an East Coast market analyst as saying. "This is going to be the worst thing the U.S. has seen in decades from an energy standpoint."

Even before the announcement, Harvey — which was downgraded to a tropical depression Wednesday as it moved farther inland — had already shut down the nation's largest refinery operations, halting about 20 percent of the country's daily supply of fuel. Half of the 26 refineries that connect to Colonial's system are located between Houston and Lake Charles, the company said.

Colonial gave no timetable for bringing the critical conduits back online.

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

Colonial Pipeline is based in the Atlanta suburb of Alpharetta. Josh Carrasco, a spokesman for AAA AutoClub Group, told NBC affiliate WXIA of Atlanta that Labor Day gasoline prices would likely be the highest since 2014.

"At this point, we're at a wait-and-see situation to see how much damage is done to those refineries in the Gulf Coast area," Carrasco said. "And then we'll have more clarity down the road."

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