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Gas Lines and Fear of a Shortage Are Growing Across the South

Commuters in many parts of the South may soon be running on empty.

While much of the coverage of the Colonial Pipeline leak in Alabama has focused on the environmental impact, gas stations and daily commuters are beginning to feel the pinch.

The US Department of Transportation has ordered the pipeline closed until it can protect the “public, property, and environment from potential hazards”. The pipeline is one of the main fuel conduits for Georgia, Alabama, Tennessee, and the Carolinas, and with gasoline supplies quickly tapering off, the law of supply and demand has asserted itself with a vengeance. Some state governments have responded to this crisis by lowering regulatory barriers for oil suppliers. Others have taken a more interventionist approach.

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Part of the problem is that panic is also beginning to play a role in soaking up supply and driving up prices. A recent trip to a corner gas station in Charlotte saw lines at every pump, as people were filling up anything that would hold gas. Given that prices have spiked 11% or more in the past week, this reaction is understandable.

This scenario has been playing itself out across the Southeast, as gas becomes increasingly hard to find. Many stations are simply out.

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Others carry only premium grade. The stations that do still have some supply often require a 20-30 minute wait in line in order to fill up, leading to scenes reminiscent of the 1970’s oil crisis. This naturally exacerbates the problem. Operating under the belief that gas will become increasingly difficult to find, many drivers are buying more gas and filling up more frequently than they otherwise would. Consumers are effectively hoarding gas. This spike in demand, coinciding with the fall in supply, causes prices to spike, creating a vicious cycle of more hoarding and more price hikes.

The responses of local governments to the pending crisis have varied. In Georgia, the governor has suspended some limitations on the hours of truck drivers, in an effort to facilitate the transportation of gas into the state. North Carolina has done this but has also gone a step further in activating its so-called Price-Gouging Law. This law prohibits the charging of prices that are “unreasonably excessive” during a declared state of emergency or time of “abnormal market disruption”. The law is somewhat vague about what constitutes an “unreasonably excessive” price, but the general intent is to put a damper on prices.

However, enforcement of the law is left up to the state Attorney General. Given that the Attorney General is a popularly elected public official who also happens to be running for governor, the interpretation of “unreasonably excessive” is likely to be excessively political.

Indeed, the law incentivizes the Attorney General to take the strictest interpretation of the law in order to collect a few, well-placed scalps, while also ensuring that consumers spend an ever-larger part of their day waiting in gas lines for fuel whose price is artificially low. Higher prices would encourage more frugality on the part of consumers while the supply shortage exists. Artificially lower prices incentivize no change in behavior and only ensure that more people will spend more time waiting in longer lines.

At present, it is unknown how long it will take to repair the leaking pipeline and restore gas supply levels to normal. With both prices and frustration soaring, how painful the crisis is will depend, in large part, on how aggressively state and local governments attempt to alleviate it.


Marc Seelinger

Marc Seelinger

When he’s not writing for the Daily Surge, Marc Seelinger is an insurance adjuster for one of the largest insurance carriers in the country. He is a freelance conservative writer and blogger and has consulted with several state-level legislative and judicial campaigns in North Carolina. He currently resides in Charlotte with his wife and dog, Reagan.

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