Biggest U.S. Gasoline Pipeline Restarts After Cyberattack

The largest gasoline pipeline in the U.S. is returning to service, recovering from a cyberattack late Friday that sent pump prices surging and triggered shortages across the Eastern U.S.

Colonial Pipeline Co. — a critical source of gasoline and diesel for the New York area and the rest of the East Coast — began to resume fuel shipments around 5 p.m. Eastern time Wednesday, the Alpharetta, Georgia-based operating company said in a statement.

It’s unclear how long it will take for supplies to come back to normal, though. U.S. Energy Secretary Jennifer Granholm said Tuesday it would take days to fully restore supplies after the restart, while Colonial indicated it will get its physical operations up and running ahead of its business systems.

The news came as gasoline stations were running dry from Florida to Virginia after Colonial was forced to take systems offline on May 7. In parts of the U.S. South, three in every four gas stations had no fuel as of Wednesday, while in Washington, D.C., cars were lining up for blocks as they waited to fill up.

Optimism that the situation will start returning to normal sent benchmark gasoline futures down as much as 1.3% in Asia trading hours, after pump prices soared above $3 a gallon for the first time in six years.

Despite the improved outlook, the disruption underscores just how vulnerable America’s fuel supply system has become in the wake of increased attacks on energy infrastructure by hackers over the past few years.

Colonial is only the latest example of critical infrastructure being targeted by ransomware. Hackers are increasingly attempting to infiltrate essential services such as electric grids and hospitals.

The attack on Colonial also came just as the nation’s energy industry is preparing for summer travel and as fuel demand rebounds from pandemic-related lockdowns. It was reminiscent of a 2018 cyberattack that brought down a third-party communications system used by several natural gas pipelines operators across the U.S.

Colonial, which each day normally ships about 2.5 million barrels (105 million gallons) — an amount that exceeds the entire oil consumption of Germany — warned the line may go down again from time to time while it’s in the process of restarting.

In a separate bulletin to its shippers, it said the company was physically starting operations even before its business systems — which process nominations for space on the pipeline and schedule them — are back up and running. As a result, it’ll be using schedules that were set five days ago until its systems are back in service, the notice shows.

As the pipeline resumes operations, the states suffering from the most acute shortages may start to feel relief this weekend.

In North Carolina, some fuel supply should appear right away, said Gary Harris, executive director of the North Carolina Petroleum & Convenience Marketers, a trade association. “People will have to be running trucks a lot to just catch up because so much is out at this time,” he said.

Major branded stations will get fuel first as they are under contract with suppliers, said Harris. Fuel may still be scarce for independent stations that are not under contract.

Royal Dutch Shell Plc said it was pursuing alternative supply points, where possible, and working in close coordination with wholesalers to address supply and logistical challenges.

Shortly before the Colonial announcement, President Joe Biden said he was expecting good news on the situation and touted the steps he had taken to relieve supply disruptions.

“I’ve lifted some of the restrictions on the transportation of fuel as well as access to the United States military providing fuel, and with vehicles to get it there, places where it’s badly needed,” Biden told reporters at the White House.

The White House this week announced several measures to blunt the growing crisis, including waiving some gasoline requirements and empowering 10 states to allow heavier-than-normal truck loads of fuels.

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