© Reuters. FILE PHOTO: Holding tanks are seen in an aerial photo inside the Dorsey Junction Station of the Colonial Pipeline in Woodbine, Maryland, the United States, on May 10, 2021. REUTERS / Drone Base
By Laura Sanicola and Devika Krishna Kumar
(Reuters) – Florida to Virginia gas stations began to run dry and pump prices rose Tuesday as hackers’ shutdown of the largest U.S. fuel pipeline lasted into a fifth day, causing panic buying among motorists.
The administration of US President Joe Biden predicted that the Colonial Pipeline, which provides nearly half of the fuel supply on the US east coast, would restart in a few days and urged drivers not to refill their tanks.
“We ask people not to hoard,” US Secretary of Energy Jennifer Granholm told reporters at the White House. “Things will be back to normal soon.”
Colonial closed on Friday after hackers launched a ransomware attack that effectively locked computer systems and required payment to unlock. The company hopes to do a “substantial” restart by the end of this week.
But the outage, which underscored the vulnerability of vital US infrastructure to cyberattacks, has already started to hurt.
About 7.5% of gas stations in Virginia and 5% in North Carolina ran out of fuel Tuesday as demand rose 20%, tracking company GasBuddy said. Unleaded gasoline prices, meanwhile, were nearing an average of $ 2.99 per gallon, the highest price since November 2014, according to the American Automobile Association.
To ease the burden on consumers, Georgia suspended sales tax on gas until Saturday and North Carolina declared an emergency. The U.S. federal government has since relaxed regulations to make it easier for suppliers to refill camps, including removing seasonal anti-smog requirements for gasoline and allowing tanker drivers to work longer hours.
Granholm said that in North Carolina, South Carolina, Tennessee, Georgia and Southern Virginia, regions that normally rely on colonial fuel, there is no shortage but a “crisis” of gasoline supplies.
Driver Caroline Richardson said she was paying 15 cents more a gallon than a week ago when she refueled at a gas station in Sumter, South Carolina. “I know some friends who have decided not to drive out of town this weekend to save fuel,” she said.
The strike against Colonial “is possibly the most serious and damaging attack on US critical infrastructure of all time,” Ohio Senator Rob Portman said Tuesday at a Senate hearing on cybersecurity threats.
The FBI has accused a shadowy criminal gang called DarkSide of the ransomware attack. DarkSide is said to be based in Russia or Eastern Europe and avoid targeting computers that use languages from former Soviet republics, cyber experts say.
The Russian embassy in the United States has denied speculation that Moscow was behind the attack. President Joe Biden said the day before that there was no evidence yet that Russia was responsible.
A statement released on Monday on behalf of DarkSide said: “Our goal is to make money and not create problems for society.”
It is unknown how much money the hackers are looking for and Colonial has not commented on whether it would pay off.
“Cyber attacks on our country’s infrastructure are becoming more sophisticated, frequent and aggressive,” said Brandon Wales, acting director of the Agency for Cybersecurity and Infrastructure Security (CISA), at a Senate hearing on the SolarWinds hack, corporate and government agencies on Tuesday met.
GOVERNMENT STEP IN
The Environmental Protection Agency issued an exemption on Tuesday allowing dealers to continue supplying winter fuel blends in three mid-Atlantic states through May 18 to facilitate supplies.
In North Carolina and the US Department of Transportation, the rules for fuel drivers have been relaxed so that truckers who haul gasoline can work longer. North Carolina and Virginia have both declared a state of emergency.
The US has also begun the work needed to enable a temporary waiver of Jones Act ships in response to the cyberattack – something that would allow foreign fuel carriers to move from one US port to another, said the Ministry of Transport.
There are growing concerns that the pipeline failure before Memorial Day weekend later this month could lead to further price spikes. The weekend is the traditional start of the busy summer driving season.
Gulf Coast refineries that rely on Colonial’s pipeline to transport their products have reduced processing. According to Reuters, the entire SE has cut gasoline production at the Port Arthur, Texas refinery and Citgo Petroleum at the Lake Charles, Louisiana facility.
Marathon Petroleum (NYSE 🙂 is “making” adjustments to its operations due to the shutdown of the pipeline, a spokesman said without giving details.
While the pipeline failure will have major short-term consequences in some regions, some experts believe the longer-term effects will be minor.
“Markets are going crazy, but two weeks later no one knows it happened,” said Chuck Watson, director of research at ENKI, who studies the economic impact of natural and other disasters.