Drivers Gear Up For Higher Gas Prices After Pipeline Cyber Attack

Largest gas pipeline in the U.S. remains offline…
Drivers flock to fill up before prices jump…

As summer quickly approaches Americans are getting ready for the seasonal jump in gas prices, but a cybersecurity attack on the largest gas pipeline in the U.S. could make it even worse.

The latest report from AAA shows the national gas price average rose by six cents last week to $2.96.

That’s up sharply from the average of $2.25 per gallon at the start of 2021 and an increase of just three cents would push the national average to the highest the U.S. has seen since November of 2014.

Table of Contents

1 Pipeline Attack
2 Colonial Works to Restore Service
3 Government Steps In to Help
4 Panic Buying Begins
5 One Platform. One System. Every Tool

Pipeline Attack

Colonial Pipeline revealed over the weekend that it fell victim to a cybersecurity attack on Friday, May 7.

The company said all pipeline operations were halted after determining the incident involved ransomware and they had launched an investigation with a third-party cybersecurity firm.

In a press release alleged to be from DarkSide ransomware, the group took responsibility for the attack saying:

“We are apolitical, we do not participate in geopolitics, do not need to tie us with a defined government and look for other our motives.

Our goal is to make money, and not creating problems for society.

From today we introduce moderation and check each company that our partners want to encrypt to avoid social consequences in the future.”

On Monday the FBI confirmed the group’s involvement, saying, “DarkSide ransomware is responsible for the compromise of the Colonial Pipeline networks” and said they were working with the company and other government partners on the investigation.

Colonial Works to Restore Service

Colonial Pipeline is the largest refined products pipeline in the U.S.

More than 2.5 million barrels of gas are transported through the 5,500-mile pipeline per day from Houston, Texas to the New York Harbor.

On Monday the company said it was working with the Department of Energy to restore service as quickly and safely as possible.

By Monday evening Colonial said one of its main lines was “operating under manual control for a limited period of time while existing inventory is available” while some smaller lateral lines were operational.

Image credit: ozrimoz/Shutterstock.com

They said they will bring the full system back online when they determine “it is safe to do so and in full compliance with the approval of all federal regulations.”

Experts say this shutdown has the potential to send gas prices to the highest level in more than six years.

AAA spokesperson Jeanette McGee said, “Areas including Mississippi, Tennessee and the east coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week. These states may see prices increase three to seven cents this week.”

Government Steps In to Help

To help ease the strain on the gasoline supply chain in the U.S., the Department of Transporation issued a temporary hours-of-service exemption.

DOT said that exemption “applies to those transporting gasoline, diesel, jet fuel and other refined petroleum products to Alabama, Arkansas, District of Columbia, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas and Virginia.”

That exemption will allow tanker trucks to transport some of the gasoline that would traditionally be moved along the Colonial Pipeline.

Panic Buying Begins

Reassurances from Colonial and the government entities involved that they will be able to mitigate the impact hasn’t stopped drivers from rushing to the gas station.

Local media reports from North Carolina say motorists are waiting in long lines to fuel up after Governor Roy Cooper issued a state of emergency on Monday.

“Today’s emergency declaration will help North Carolina prepare for any potential motor vehicle fuel supply interruptions across the state and ensure motorists are able to have access to fuel,” the Governor said.

That declaration comes after Colonial’s CEO Joseph Blount warned state officials about a possible supply shortage during a private meeting on Monday.

Patrick De Haan, head of petroleum analysis at GasBuddy, told CNBC, “It’s hard to know if Colonial or the authorities in this issue even have a feeling for when this could be resolved themselves. I think you’re seeing the market respond very cautiously, not knowing if this could extend into five, seven, 10, 14 days.”