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Biden administration scrambles to stave off gas shortage crisis

Even before a cyberattack crippled a major gas pipeline, prices were surging and analysts were predicting shortages as people begin to travel more.
Dax Valenti fills up gas canisters at a gas station in Tampa, Fla., on May 12, 2021.
Dax Valenti fills up gas canisters at a gas station in Tampa, Fla., on May 12, 2021.Octavio Jones / Reuters

WASHINGTON — Just as Covid-19 seems to be loosening its grip on America, the Biden administration was faced with potentially crippling gas shortages in what risked becoming one of the first large-scale non-pandemic crises to test the White House.

Gas lines, hoarding, price-gouging and even fist fights were reported in the Southeast as thousands of stations ran out of fuel following a cyberattack that shut down a key pipeline serving the East Coast. The administration announced on Wednesday that pipeline was restarting. Colonial Pipeline warned it will still take days to restore the supply.

President Joe Biden pushed to keep Americans optimistic after his White House warned for days that consumers shouldn't panic buy gas.

"I think you are going to hear some good news in the next 24 hours," Biden said on Wednesday. "I think we’re going to be getting that under control."

Republicans and their allies in the conservative media seized on the crisis, comparing Biden to former President Jimmy Carter — who lost re-election after an energy crisis in 1989 led to gas shortages, skyrocketing prices and rationing — and sharing memes saying Biden’s presidency is “out of gas.”

Officials set a target to get the Colonial Pipeline back online by the end of this week. But even before the shutdown, gas prices were climbing as people re-emerge from Covid-19 lockdowns to travel again — the national average broke $3 per gallon for the first time in seven years on Wednesday. Analysts were warning about potential shortages this summer even before the cyberattack.

If the pipeline shutdown had dragged on beyond this week, it could have reverbating affects cross the economy, including grounding flights and slowing supply chains for other needed goods.

Several states declared an emergency. Seven-in-ten gas stations in the Charlotte, North Carolina area ran out of at least one kind of fuel by Wednesday, while prices had risen to $6.99 a gallon at at least one Richmond, Virginia station. And airlines have already had to scramble to conserve fuel at affected airports.

East Coast cities have been relying on fuel stored in giant tanks, but it could only last a matter of days. The Federal Emergency Management Agency (FEMA) warned in its daily situation report, a copy of which was obtained by NBC News, that if the pipeline stayed offline beyond Wednesday, there could be “widespread impacts on the fuel supply in the Southeast and Central Atlantic Markets.”

“I understand and I am doing everything I can using every lever of government to ensure we reduce the impact on the American people and their lives,” White House Press Secretary Jen Psaki told reporters when asked to summarize Biden’s message to the country.

The White House characterization of the gas crunch shifted as the pipeline shutdown dragged on, with officials stopping short on Monday of calling it "shortage" but then employing the term repeatedly on Wednesday.

High octane politics

Pump politics have lost some octane in recent years thanks to low prices, but gas prices have long been a touchy political issue, since they are felt personally and immediately by voters and impact nearly every part of the economy.

When gas prices spiked in 2008, they became a central issue in that year’s presidential campaign. Republican John McCain attacked Democrat Barack Obama in TV ads for opposing more domestic oil production and his vice presidential nominee Sarah Palin popularized the phrase, “Drill, baby, drill!"

Now, even when the pipeline returns to operation, gas prices — and gas politics — are likely on the rise again after the Covid-19 pandemic halted travel and parts of the fuel supply chain.

“Rising gas prices are a sign Americans are getting back out into the world — attending baseball games, going to concerts, taking a road trip — basically staying anywhere but at home,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “This summer may see some blockbuster demand for fuel as well, as Americans find it very challenging to travel internationally, leading many to stay in the confines of U.S. borders, boosting some weeks to potentially record gasoline demand.”

The White House has scrambled to find alternate ways to deliver fuel to areas impacted by the pipeline closure.

The administration issued an emergency declaration Sunday to allow truckers to drive on more overtime hours and with less sleep than federal restrictions normally allow in an effort to deliver more oil and gas, which was followed by a waiver Tuesday temporarily allowing the impacted states to sell dirtier gasoline than would normally be allowed under environmental regulations.

Officials also said they were preparing to temporarily waive the Jones Act, which would allow foreign-flagged ships and vessels to deliver fuel to the Eastern seaboard should the need arise, and they said they were working to enlist rail operators from around the country to transport fuel to the affected areas.

Panic buying

Republicans are not going to let a good crisis go to waste and see an opportunity to undercut Biden as he has enjoyed months of relatively favorable economic news.

“President Biden's leadership is non-existent,” House Minority Whip Steve Scalise, R-La., said on Fox News. “Gas prices are through the roof and people are now waiting in line. There was a major hack by Russia, likely. President Biden doesn't want to confront that. You're looking at home prices... We're seeing inflation starting to go through the roof.”

Former Secretary of State Mike Pompeo said on Fox News that the fact that a Russian cybergang could hobble the U.S. economy made Biden look weak, while Republican senators like Marco Rubio, of Florida, and Marsha Blackburn, of Tennessee, said the pipeline disruption showed Biden was wrong to cancel the Keystone XL pipeline — even though that pipeline would have carried crude oil from Canada to ports on the Gulf Coast for export, not gasoline for domestic use.

Others argued Biden was too slow to act and should have mobilized government resources before lines began to form at gas stations. Tucker Carlson said on his top-rated Fox News show that “the White House approves of this disaster,” because it would advance Biden’s environmentalist agenda to “close every gas station in the entire United States” in the move to electric vehicles.

But experts and local officials of both parties say panic buying, not the genuine supply disruption from the cyberattack, is responsible for much of the shortages now. "Panic buying of gas right now will create this artificial demand that will make all of this worse,” said AAA spokesperson Morgan Dean.

On Monday, demand for gas was up about 40 percent from the previous week as people rushed to fill up and shortages were being reported in parts of the country that don't get their gasoline from the compromised pipeline, such as South Florida, which gets its fuel from oil tankers, and Arizona, which get its fuel from other pipelines.

“Please do not fill up your car unless you need to and do not fill multiple containers. Overreacting creates more of a shortage,” Alabama Republican Gov. Kay Ivey said Tuesday, when data showed just one-in-200 of her state's gas stations were experiencing outages.

The Consumer Product Safety Commission even felt compelled to remind people via social media not to fill plastic bags with gas.

“Obviously people made a run on the pumps after the media coverage got so extensive coming out of the weekend, which has created certainly a supply issue here in the state of Georgia,” the state's Republican Gov. Kemp said on Fox News Business. “It is frustrating that people are panic buying. We tried to ask people to use good common sense. Get what they need, not more than they need. And that's fallen on deaf ears for some.”

To ease the gas crunch in the next few days before the pipeline comes back on, it’s a message the Biden administration hopes more people wills start to listen.

“We understand that there are shortages resulting from the Colonial Pipeline shutdown,” Transportation Sec. Pete Buttigieg said Wednesday at the White House. “This is a time to be sensible.”