We watched the crowds grow at the Vinings QuikTrip all of Wednesday afternoon from the office building window. A couple of major supply pipelines to Atlanta are out of commission due to the power outages in Mississippi and Louisiana, who would love to have a gas “shortage” be the worst of their problems, and so an ugly rumor started that Atlanta was going to run out of gasoline. A self-fulfilling prophecy at some gas stations. At times, the lines ran only to the edge of the parking lots, with 2 dozen or so cars waiting for their turn at the pump. At its worst, every gas station in the region become a hub for gridlock, with cars waiting in line for literally blocks to get their crack at $3/gallon gas.

In other places in Atlanta, prices reportedly crept as high as $6 a gallon. Friends had emails circulating to their entire company warning them of the supposed impending gas shortage. A frenzy of herd-mentality panic. The facts of the matter are simple – these pipelines are not the only way fuel can enter Atlanta – gas comes into Savannah’s port, and trains and trucks are able to deliver fuel as well, though at higher cost. In the absence of panic-buying, these higher cost transport alternatives will kick in and the supply chain will be uninterrupted, and prices somewhat higher.

The continued upward race of gas prices led our governor to call a “state of emergency”, threatening heavy fines to any gas station that charges more for gas than the prices they charged at mid-day today. In the very short term, this is a decent idea. Stifle the profiteering based strictly on the panic of the general public. If this cap on prices survives for more than a few days, we’ll be in real trouble. Suppliers will sell their gas on the open market in states with uncapped prices, and Georgia will see the lines and shortages of gas this country saw in the 70’s – who wants to sell gas below market rates? We need to get back to market rates soon to prevent true shortages.

As I drove past the QuikTrip again last evening around 9 PM, the prices were stripped from the sign. They’re out of gas. Closer to home, cars were still lined up down the street for gas at a BP with prices under $3/gallon. The RaceTrac across the street was sporting prices that were $0.25 higher, and it was a ghost town, as was another nearby gas station with higher prices. There may be a shortage of cheap gas, but plenty of gas for people willing to pay the premium. Time to buy a bicycle.