The cyberattack that forced the shutdown of a major U.S. pipeline could cause gas shortages in certain areas, reports say, and could push average gas prices well above $3 a gallon.
The shutdown stretched into its third day Monday, with President Biden’s administration declaring “all-hands-on-deck” to restore operations and avoid further disruptions in the fuel supply.
According to the Associated Press, the attack was a cyberextortion attempt carried out by a criminal gang known as DarkSide.
Here’s what’s known about the attack so far:
Operations have been halted
The pipeline operator, Colonial Pipeline, said in a statement late Friday it had halted systems for 5,500 miles of pipeline following the attack. On Monday, it said it hopes to have service mostly restored by the end of the week.
Colonial Pipeline is one of the nation’s largest pipelines and carries refined gasoline and jet fuel from Texas up the East Coast. The statement said it amounts to about 45% of the East Coast’s fuel supplies.
It was a ransomeware attack
Colonial Pipeline said that its corporate computer networks were hit by a ransomware attack, in which the attackers hold the networks and data hostage until the victim pays a ransom. The company said it had shut the pipeline down as a precautionary act following the attack.
According to the Cybersecurity and Infrastructure Security Agency (CISA), ransomware is an ever-evolving form of malware designed to encrypt files on a device, rendering any files and the systems that rely on them unusable.
“We are engaged with the company and our interagency partners regarding the situation,” said Eric Goldstein, CISA Executive Assistant Director for Cybersecurity. “This underscores the threat that ransomware poses to organizations regardless of size or sector. We encourage every organization to to strengthen their cybersecurity posture to reduce their exposure to these type of threats.”
Feds are blaming ‘DarkSide’
According to the Associated Press, two people close to the investigation, speaking on condition of anonymity, identified the culprit as DarkSide, a group that cultivates a Robin Hood image of stealing from corporations and giving a cut to charity.
DarkSide has reportedly been active since August, but claims it does not attack hospitals and nursing homes, educational or government targets.
Gas prices could be affected
Colonial’s pipeline reportedly transports about 2.5 million barrels each day, and most of that goes into large storage tanks. That means the shutdown is unlikely to cause any immediate disruptions, according to the New York Times.
Colonial Pipeline also said Sunday night that some of its smaller lines were back online, but that its main lines are still shut down.
“We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations,” the company said in a statement.
How quickly full service is restored will be the key, experts say. CNBC reported that a prolonged outage could lead to a spike in fuel prices, and trading early Monday showed a 3% jump in futures to $2.217 a gallon, the highest since May 2018.
“Atlanta will be one of the earlier sore spots, along with eastern Tennessee, and perhaps the Carolinas,” Gas Buddy analyst Patrick De Haan told Bloomberg News.
Gas held in storage is also delivered to major airports on the East Coast.
Federal officials are scrambling in the aftermath
The Federal Bureau of Investigation and the Department of Energy are reportedly assisting CISA in the investigation of the ransomware attack.
In a statement over the weekend, the White House said President Biden had been briefed and that federal officials were working to “assess the implications of this incident, avoid disruption to supply and help the company restore pipeline operations as quickly as possible.”
The Department of Transportation also relaxed hours-of-service regulations for drivers transporting gasoline, jet fuel and other refined petroleum products.
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The altering of regulations will allow drivers to work extra hours to make up for any possible fuel shortage related to the pipeline outage. That applies to drivers carrying fuel to 17 states — including Pennsylvania — and the District of Columbia.