The Colonial Pipeline is a major pipeline system that transports refined petroleum products like gasoline, diesel, jet fuel, and heating oil from refineries located on the Gulf Coast up to distribution terminals located across the Eastern and Southern United States. The pipeline plays a critical role in supplying fuel to major airports and markets from Houston, Texas up to the New York Harbor. Understanding the path and routes of the Colonial Pipeline provides insight into how fuel is transported and distributed across large regions of the country.
Where does the Colonial Pipeline start and end?
The Colonial Pipeline originates on the Gulf Coast of Texas. The starting point for the pipeline is in Houston, Texas where several refineries owned by major oil companies like ExxonMobil, Chevron, Shell, and Valero operate large facilities. Crude oil is processed at these refineries into various refined products like gasoline, diesel, and jet fuel.
The endpoint of the Colonial Pipeline is located just outside New York Harbor in Linden, New Jersey. This distribution terminal supplies fuel products to New York City and northern states like Connecticut, Rhode Island, Massachusetts, New Hampshire, Vermont and Maine. In total, the Colonial Pipeline runs around 5,500 miles from start to finish.
What states does the Colonial Pipeline run through?
The Colonial Pipeline passes through 12 different states on its way from Texas to New York:
- Texas
- Louisiana
- Mississippi
- Alabama
- Georgia
- South Carolina
- North Carolina
- Virginia
- Maryland
- Pennsylvania
- New Jersey
- New York
Major metro areas supplied by fuel delivered through the Colonial Pipeline include Houston, Atlanta, Charlotte, Washington DC, Baltimore, Philadelphia and New York City. The pipeline passes through both rural areas as well as heavily populated urban centers along its route.
What are the major segments of the Colonial Pipeline?
The Colonial Pipeline is composed of several major segments that transport fuel through different parts of the country:
Houston to Pasadena, TX: Transports fuels like gasoline and diesel within the Houston refining complex.
Pasadena, TX to Collins, MS: Carries products like jet fuel, diesel, and gasoline from Houston east towards Louisiana and Mississippi.
Collins, MS to Greensboro, NC: Extends across Mississippi, Alabama, Georgia and South Carolina. This segment provides gasoline and aviation fuels.
Greensboro, NC to Linden, NJ: Runs northeast through the Carolinas, Virginia, Maryland, and terminates in northern New Jersey. Supplies products like heating oil and diesel.
In total, Colonial operates around 15 laterals and interconnections that connect the main segments to distribution terminals. The segmented design provides flexibility in transporting different fuel products to markets across the Eastern U.S.
How much fuel does the Colonial Pipeline transport?
The Colonial Pipeline has a massive capacity for transporting refined fuel products. Some key facts about its capacity:
- Is the largest refined products pipeline in the U.S., transporting more than 100 million gallons per day.
- Provides roughly 45% of all fuel consumed on the East Coast.
- Can carry up to 3 million barrels per day of gasoline, jet fuel, and other products.
- Transports around 2.5 million barrels per day under normal operations.
- Shipped over 100 billion gallons of fuel in 2020.
This huge capacity makes the Colonial Pipeline critically important for supplying major airports like Atlanta Hartsfield, Washington Reagan and New York’s JFK. It also supplies regional storage terminals that distribute gasoline and other fuels to retail gas stations across the Eastern U.S.
Who owns and operates the Colonial Pipeline?
The Colonial Pipeline Company is the operator of the pipeline system. Colonial Pipeline Company is a privately held company founded in 1962. Today it is jointly owned by several energy and infrastructure companies:
- Royal Dutch Shell – 44% ownership
- Koch Industries – 28% ownership
- IFM Investors – 17% ownership
- KKR & Co – 11% ownership
The company headquarters are located in Alpharetta, Georgia. However, Colonial Pipeline Company partners with several fuel distributors and airport fueling operators to deliver products through regional connections. Some of these key partners include BP, Kinder Morgan, Buckeye Partners and Magellan Midstream Partners.
Why is the Colonial Pipeline important for fuel supply?
There are several reasons why the Colonial Pipeline is extremely important for fuel supply and distribution across the Eastern U.S:
- No alternative method exists for transporting fuel in similar quantities overland. The pipeline provides the only economical way to ship hundreds of millions of gallons per day between the Gulf and East Coast.
- The pipeline system has much higher capacity than other fuel transportation methods like rail, barge or truck. It would take 15,000 trucks per day to transport the same volume.
- The complex interconnected pipeline network is highly efficient for fuel transport through multiple states and metro areas.
- Colonial provides the primary source of jet fuel supply for major commercial airports in the region.
- Approximately 50 million Americans across the Southeast and Eastern Seaboard rely on fuel products delivered through the pipeline every day.
Given the lack of feasible alternatives, any disruption in Colonial Pipeline operations leads to fuel shortages and higher prices across the region. The pipeline provides flexibility and efficiency in fuel distribution that could not be easily replaced.
How does the Colonial Pipeline deliver fuel to end users?
The Colonial Pipeline transports bulk fuel products long distances from refineries to storage terminals. But how does the fuel actually get from the pipeline to end consumers at retail gas stations?
There are specialized distribution networks that connect the end points of the Colonial Pipeline to stations in local communities. Here are some of the ways fuel is delivered beyond the pipeline:
- Fuel terminals – Colonial Pipeline terminates at storage terminal facilities in places like Linden, NJ. Terminals hold millions of gallons of gasoline and distillates that can be loaded into tanker trucks.
- Trucking and rail – Fuel trucks and rail tanker cars are filled up at the storage terminals. Trucks transport fuel short distances to retail gas station tanks while rail cars may move products longer distances.
- Barges – Some pipeline fuel is transferred to barges and shipped over waterways to reach destinations not accessible by the pipeline.
- Local Pipelines – Smaller connector pipelines move fuel products from major terminals to end users. For example, jet fuel is piped to nearby major airports.
- Dealers – Fuel delivery dealers coordinate local tanker truck shipments from regional fuel depots directly to gas station tanks and home heating oil customers.
This last mile distribution network is essential to actually get fuel into the hands of end consumers once it arrives by the Colonial Pipeline. Fuel travels through a complex supply chain before finally reaching the gas pump or home heating oil tank.
What are some recent developments with the Colonial Pipeline project?
The Colonial Pipeline is over 60 years old but continues to be upgraded and expanded to increase capacity. Here are some recent developments:
- Capacity expansion projects completed in 2016 and 2018 increased total system throughput to over 3 million barrels per day.
- Joint ventures have connected new lateral pipelines from Houston to Hearne, Texas and Tift County, Georgia to meet supplies from new refineries.
- A new 360,000 barrel tank farm was constructed at Atlanta Hartsfield Airport in 2019 to increase jet fuel storage.
- In 2020, a new solar power facility was brought online near Collins, Mississippi to provide renewable energy for pipeline operations.
- Cybersecurity enhancements were added in 2021 in response to a ransomware attack that temporarily shut down pipeline operations.
Ongoing upgrades and capacity expansions on the Colonial Pipeline enable it to keep pace with the growing energy needs of the Southeast and East Coast regions. The pipeline will continue playing a central role in supplying refined oil products like gasoline and jet fuel to millions of end users.
What is the economic impact of the Colonial Pipeline?
The Colonial Pipeline generates major economic benefits related to fuel supply, costs, employment and revenues:
- The pipeline saves millions of dollars in fuel costs each year by enabling efficient transportation of products over long distances.
- It directly employs around 1,000 workers in skilled jobs related to pipeline operations and maintenance.
- Business activities related to the pipeline create over 10,000 additional downstream jobs in fuel distribution and retail.
- The company generates over $400 million per year in revenue from pipeline operations.
- Fuel taxes related to petroleum products delivered by the pipeline generate over $1 billion annually in tax revenue for federal and state governments.
- Consumers across the Southeast save money at the pump when the pipeline operates reliably keeping fuel prices low.
Overall, the Colonial Pipeline represents an asset providing tremendous economic value through affordable and reliable fuel supplies. It directly and indirectly supports thousands of jobs across multiple states.
What are some of the controversies surrounding the pipeline?
For the most part, the Colonial Pipeline operates as critical energy infrastructure relied upon by millions of consumers and businesses. However, it has also been impacted by several controversies over the years:
- Environmental Impacts – Pipeline spills releasing gasoline and other contaminants into soils, rivers and aquifers. This has occurred a few times over the decades.
- Cyber Attack – In 2021, a major cyberattack by a ransomeware hacking group shut down the pipeline for days leading to panic buying and fuel shortages across the Southeast.
- Ownership Conflicts – As a private company with multiple corporate owners, Colonial has faced pressures from competing shareholder interests over business strategy.
- Expansion Opposition – Proposed capacity expansion projects have sometimes faced opposition from local environmentalists and communities.
- Eminent Domain – Colonial’s use of eminent domain to secure right-of-way for new pipeline extensions has caused controversy with some property owners.
However, despite periodic controversies, the Colonial Pipeline remains a vital energy artery supplying the Eastern U.S. with no real alternatives. It provides an indispensable service that would be extremely difficult and costly to replace.
Conclusion
In summary, the Colonial Pipeline is the major refined petroleum product pipeline serving the Southeast and Eastern United States. It originates on the Gulf Coast of Texas, passes through the Southeast, and terminates just outside New York Harbor. The 5,500 mile pipeline system can transport over 3 million barrels per day of fuel products like gasoline, diesel, and jet fuel to major markets and airports across the region. Ongoing expansion projects continue to increase capacity and reliability of fuel supply to 50 million consumers across 12 states. The pipeline provides critical energy infrastructure enabling affordable fuel access that would be extremely challenging to replace. Despite some controversies over its 60+ year history, the Colonial Pipeline remains an indispensable transportation backbone for the U.S. energy sector.