Gas prices could move higher, at least temporarily, after a major pipeline supplying fuel to the East Coast of the U.S. was closed over the weekend due to a cyberattack.
The Colonial Pipeline, which stretches from the Gulf Coast to New Jersey and moves millions of gallons of fuel, had to be shut down when hackers launched a ransomware attack against the company that operates it.
The company said it has not yet been able to uncover any evidence that the attackers were able to penetrate the pipeline’s vital systems. The company shut down the pipeline out of an abundance of caution.
“In response, we proactively took certain systems offline to contain the threat, which has temporarily halted all pipeline operations and affected some of our IT systems,” Colonial said in a statement.
The company said it acted immediately to engage a cybersecurity firm to investigate. At the same time, it notified the FBI. A spokesman for the agency told the Wall Street Journal that the agency is working closely with Colonial to make sure its systems remain secure from attack.
“Colonial Pipeline is taking steps to understand and resolve this issue,” the company said. “At this time, our primary focus is the safe and efficient restoration of our service and our efforts to return to normal operation. This process is already underway, and we are working diligently to address this matter and to minimize disruption to our customers and those who rely on Colonial Pipeline.”
But closing the 5,500 mile-long pipeline has cut off a major artery of fuel across the Southeast and up the Atlantic Coast. Depending on how long the shutdown continues, fuel supplies could begin running low and prices could begin to rise.
Advice for consumers
Patrick DeHaan, head of petroleum analysis at GasBuddy, advised motorists served by the pipeline on Sunday not to panic.
“Rushing out and filling your tank will make the problem much much more acute and likely double or triple the length of any supply event if it comes to that,” he tweeted.
The Colonial Pipeline moves 100 million gallons of gasoline, diesel fuel, and other products each day, so a lengthy shutdown would be noticeable at the gas pump in a highly populated area of the country. The company noted that it moves nearly half the region’s fuel on a daily basis.
In 2017, Hurricane Harvey forced a shutdown of the Colonial Pipeline, resulting in a temporary price surge at the gas pump. Months earlier, Colonial suffered a break in its Line 1 in Georgia, interrupting fuel supplies to the East Coast. It resulted not only in rising prices but caused lines at gas stations in Tennessee when some stations' tanks ran dry. It took several weeks for prices to return to normal.