Gasoline Pipeline Hack Results in Panic Shopping for within the Southeast

HOUSTON – Panicked drivers tried to refuel their vehicles in the southeast on Tuesday, leaving thousands of stations without gas as a critical fuel line largely shut down following a ransomware attack.

The disruption of the Colonial Pipeline, which stretches 5,500 miles from Texas to New Jersey, also left the airlines vulnerable. Several said they would send jet fuel to the area by air to make sure the service wasn’t disrupted.

Gasoline in Georgia and several other states rose 3 to 10 cents a gallon on Tuesday, a jump typically only seen when hurricanes disrupt refining and pipeline operations along the Gulf Coast.

The national average for a gallon of regular gasoline rose 2 cents Tuesday, with higher prices reported in the southeast, according to the AAA Motor Club. The average increase was nearly 7 cents in South Carolina, 6 cents in North Carolina, and 3 cents in Virginia.

The southern stations were selling two to three times their normal amount of gasoline on Tuesday, according to the Oil Price Information Service, which tracks the industry. Some stations limited purchases to 10 gallons.

Nearly 8 percent of gas stations in Virginia have been without gas, which is more due to panic buying than shortages, reported Gas Buddy, a service that tracks gasoline prices.

“There is no gas and people get frustrated,” said Ariyana Ward, a 19-year-old student in Virginia Beach, who waited 45 minutes for it to be refilled. Since some drivers take their time to fill both cans and cars, she said, “People start screaming matches.”

The heads of state responded with measures to keep the flow of fuel stable and to stabilize prices.

Georgia Governor Brian Kemp signed an executive order that suspended his state’s gasoline tax to around 20 cents a gallon through Saturday. He said the move would “help level the price for a while,” and warned against panic buying. North Carolina Governor Roy Cooper, Virginia Governor Ralph S. Northam, and Florida Governor Ron DeSantis each declared a state of emergency to suspend some regulations on fuel transportation. Governor DeSantis also activated the National Guard to deal with the emergency.

South Carolina Attorney General Alan Wilson announced that he was willing to invoke the state discounting law, making excessive overloading a criminal offense. “I urge everyone to be careful and patient,” said Wilson.

At the White House, Energy Secretary Jennifer M. Granholm told reporters, “We know we have gasoline. We just have to put it in the right places. “However, she made no promises about when the pipeline, which was shut down to prevent the cyberattack from spreading, would resume operations, and said the company will decide on Wednesday whether it is ready to do so.

She said she expected gas station operators to act “responsibly” and added, “We have no tolerance for price cuts.”

The government was considering other steps that could alleviate bottlenecks, including moving gasoline, diesel, and jet fuel by train or enacting a waiver of a 1920 law known as the Jones Act that requires sea transport to be by ship, owned and occupied by Americans. However, it was unclear whether the correct type of railroad car or overseas registered ships were available.

“There are no easy solutions,” said Ms Granholm.

Environmental Protection Agency administrator Michael Regan enacted an emergency fuel emission waiver Tuesday to help ease fuel shortages in locations affected by the pipeline shutdown, including the District of Columbia, Maryland, Pennsylvania and Virginia. The waiver will continue until next Tuesday.

Colonial Pipeline, the company that operates the pipeline, hopes to restore most operations by the end of the week. The attack, which the Federal Bureau of Investigation said was carried out by an organized crime group called DarkSide, exposed the vulnerability of America’s energy system. The pipeline supplies the eastern United States with nearly half of its transportation fuel.

Colonial remained largely silent and did not answer questions about the protections that were in place in both its computer networks and the industrial controls that operate the pipeline.

In a statement late Tuesday evening, Colonial said it had started part of the pipeline manually and delivered approximately 41 million gallons of fuel to various locations on its system, from Atlanta to the Carolinas to Linden, NJ

However, the company said nothing about what factors will play a role in its decision to restart the pipeline. And it has not been stated whether it found evidence that the malware placed in its data systems could be migrated to the operations of the pipeline.

Several experts found that, while the two networks are described as separate entities, there is significant overlap. For example, one of the systems tied by the ransomware group keeps track of how much fuel each customer uses. Without this race, Colonial wouldn’t know how much fuel any of its customers would get – or how they could be paid for it.

Industry analysts said the impact of the hacking would remain relatively minor as long as the artery was fully restored soon. “With a solution to the shutdown in sight, the cyberattack is now being treated as a minor disruption by the market and prices are reducing panic gains on Monday,” said Louise Dickson, oil market analyst at Rystad Energy.

Gasoline prices usually go up at this time of year as the summer driving season approaches. Even before the Colonial Pipeline ceased operations, average national gas prices rose nearly a cent per gallon every day.

Higher fuel prices affect people on lower incomes the most, as they spend the highest percentage of their income on gasoline and tend to drive less fuel-efficient vehicles. That makes gasoline prices a potential political problem after having been relatively low for several years.

Several airports in the south and in the Washington region could be affected in the next few days as they are connected to the pipeline and usually only have a few days of supply.

Airlines for America, an industry group, said Tuesday, “While a small number of airports are running low on inventory, the vast majority of US airports have multi-day jet fuel.”

In a 2018 report, the group argued that the interstate pipeline system used to supply jet fuel to airports has become increasingly vulnerable to costly disruptions. And when disruptions occur, airlines have few good options other than flying on extra fuel, stopping flights, or canceling and rerouting flights.

After the disruption last weekend, American Airlines announced that two daily flights from Charlotte, NC One, to Honolulu, Dallas, where customers will switch planes, have been halted. The other, to London, will stop in Boston to refuel. Flights are expected to return to their original flight schedules on Saturday.

Southwest Airlines said it was flying to Nashville on extra fuel and United Airlines said it was flying extra fuel to Baltimore; Nashville; Savannah, Ga .; and Greenville-Spartanburg International Airport in South Carolina. United, Southwest and Delta Air Lines said they had not detected any operational disruptions so far.

Gillian Friedman contributed to the coverage.

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