The US government declared a state of emergency on Sunday in an effort to keep fuel supply lines open as fears of shortages grew after the shutdown of a major pipeline.
The move lifted several road limits for fuel transportation to mitigate the impact of the continued closure of the colonial pipeline, which consumes nearly half of the fuel on the US East Coast, following a ransomware cyberattack. Friday.
“This statement addresses the emergencies that create a need for immediate transportation of gasoline, diesel, jet fuel and other refined petroleum products and provides the necessary relief,” said the Department of Transportation.
It comes as the government works to cope with the fallout of Colonial, the largest refined product pipeline in the US, which transports 2.5 million barrels of fuel daily from Gulf Coast refineries to markets such as Atlanta. , Washington and New York. .
The pipeline’s operator, the Colonial Pipeline Company, was forced to take the entire system offline on Friday following an attack that attributed it to ransomware in which hackers take control of a victim’s computer systems or data by installing illegal software and do not release assets until after payment. is made.
It said on Sunday evening that the main lines remained offline, but that some smaller lines between terminals and delivery points had been put back into use. It gave no indication when full service would resume.
“We are in the process of restoring service to other sidewalls and will only bring our entire system back online when we believe it is safe and in full compliance with all federal regulatory approvals,” the company said.
Gasoline prices were up a whopping 4 percent when trading reopened on Sunday night, before falling back to trade about 2 percent higher on the day at $ 2.16 a gallon.
If the pipeline is not reopened soon, the impact on prices could worsen in the coming days, says Patrick De Haan, head of petroleum analysis at data provider GasBuddy.
“We realize that its severity may be worse than we expected,” said De Haan. “There is still a little breathing space, we are almost running out of it. But Monday, Tuesday if there is no news, you know we are dealing with something very important.”
The pipeline is the nation’s largest channel for refined products, stretching more than 5,500 miles from Pasadena, Texas to Linden, New Jersey and the Port of New York. It serves some of the US transportation hubs, including the nation’s busiest airport, Hartsfield-Jackson in Atlanta.
Demand for gasoline in areas served by the pipeline is up about 4 percent on Saturday compared to the previous week, GasBuddy said, indicating some degree of panic buying exists as consumers were concerned about the possibility of a prolonged power failure.
The shutdown could trigger a fresh surge in US petroleum imports, exposing the country’s energy vulnerability, despite a decade of surging domestic and gas production.
“The baseline scenario is that it will be resolved quickly, but if it doesn’t, US gasoline and diesel prices will have to rise very significantly to attract enough imports from Europe,” said Robert Campbell, chief of research on oil products at consulting firm Energy Aspects.
Gulf Coast refineries using the pipeline to ship products east would be forced to cut back fuel production, he said.
Large pipelines increasingly rely on automation to monitor flows and pressures, and to control batches of petroleum product deliveries, increasing the disruption that can be caused by a computer hack.
“This is definitely not a joke for a schoolboy. This is a very sophisticated attack on a piece of critical infrastructure, ”said Campbell.
The attack comes amid growing concerns about cyber security vulnerabilities in America’s critical infrastructure following last year’s SolarWinds attack, attributed to Russia by US authorities.
It’s also because the number of ransomware attacks has spiked in recent years, with cyber criminals – often operating from jurisdictions where they won’t be prosecuted by authorities – demanding an average ransom of more than $ 100,000 from victims over $ 100,000, according to the U.S. Department of Justice.
Last month, a coalition of major tech companies and US officials from the FBI and the DoJ called on governments to classify ransomware as a threat to national security and to “put pressure” on countries that refuse to engage in the fight against connect the hacker epidemic, for example by means of sanctions. .
The attack came as the White House prepared for another round of negotiations with lawmakers over the president’s proposed $ 2.3 billion infrastructure package.
Biden and the Democrats say unprecedented federal spending on everything from broadband access to subsidized childcare is needed to spur and sustain an economic recovery. But the Republicans have pushed for a leaner bill that focuses more on traditional infrastructure projects, such as roads, bridges and tunnels.
Adam Kinzinger, a Republican congressman from Illinois, said on Sunday that the attack on the colonial pipeline underscored the importance of investment in critical infrastructure and energy projects.
“This should redouble our efforts as a country to get past our internal divisions. . . and focus on things like critical infrastructure in the future, ”he told CBS News. “Because this will only happen more often if we’re not careful.”