Colonial Pipeline Restart To Take Days As Southeast U.S. Scrambles For Fuel

Colonial Pipeline began to restart the nation’s largest fuel pipeline network on Wednesday but it will take days to get back to normal after a ransomware attack shut the line and sent Americans in the southeastern United States scrambling to find fuel as stations ran out of gas.

“Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions,” the company said in a statement six days after it shut the line due to the hack. “Colonial Pipeline will move as much gasoline, diesel and jet fuel as is safely possible and will continue to do so until markets return to normal.”

Observers reported fistfights erupting over fuel supplies in North Carolina and other regions as the outage triggered gasoline shortages and panic buying.

Colonial halted 2.5 million barrels per day of shipments of gasoline, diesel and jet fuel last Friday after the most disruptive cyberattack ever on U.S. energy infrastructure.

Sources familiar with Colonial’s response said the company does not plan to pay the ransom demanded by hackers who encrypted data on the pipeline, which stretches 5,500 miles (8,850 km) from U.S. Gulf Coast oil refineries to consumers in Mid-Atlantic and Southeast states.

Colonial said it was working with cybersecurity experts to investigate the attack and it has taken additional security measures. The breach involved IT systems, and the company said its control center is handling the restart.

The supply crunch sparked panic buying in the U.S. Southeast, bringing long lines and high prices at gas stations ahead of the peak summer driving season.

Nearly 60% of gas stations in metro Atlanta were without gasoline, tracking firm GasBuddy said. Its survey showed 65% of stations in North Carolina and 43% in Georgia and South Carolina without fuel. Virginia also reported high outages.

RISING TENSIONS

U.S. Transportation Secretary Pete Buttigieg said the administration is addressing fuel shortages and helping restore Colonial operations.

“Our top priority right now is getting the fuel to the communities that need it,” Buttigieg told reporters at the White House.

At a Citgo station in East Atlanta, Charles Williams, 66, a local musician, filled his wife’s Mini Cooper after seeing people with large jerry cans loading up.

“I wouldn’t say I know they’re hoarding, but I don’t know if they’re helping,” he said.

Privately owned Colonial Pipeline opened portions of the line manually in Georgia, Maryland, New Jersey and the Carolinas. It also accepted 2 million barrels of fuel to begin efforts to “substantially” restore operations by week’s end, the company has said.

The average national gasoline price rose to above $3.00 a gallon, the highest since October 2014, the American Automobile Association said.

HOARDING CREATING MORE SHORTAGES

Fuel industry representatives urged consumers to stop panic buying. They noted the country has plenty of gasoline supplies and said hoarding is creating shortages in areas not served by the pipeline.

“Retailers right now have sold several days worth of inventory within a few hours,” said Rob Underwood, President of the Energy Marketers of America.

Four southeastern states – Florida, North Carolina, Virginia and Georgia – joined federal regulators in relaxing driver and fuel restrictions to speed deliveries of supplies. Georgia suspended sales tax on gasoline until Saturday.

The FBI has accused a shadowy criminal gang called DarkSide of the ransomware attack. The group, believed to be based in Russia or Eastern Europe, has not directly taken credit, but on Wednesday it claimed to have breached systems at three other companies, including an Illinois tech firm. [L1N2MZ2R6]

Russia’s embassy in the United States rejected speculation that Moscow was behind the attack. On Monday, Biden said there was no evidence so far that Russia was responsible.

REFINERS, AIRLINES REACT

It was not known how much money the hackers are seeking.

Gulf Coast refiners that move fuel to market on the Colonial Pipeline have cut processing. Total SE trimmed gasoline production at its Port Arthur, Texas, refinery, and Citgo Petroleum pared back at its Lake Charles, Louisiana, plant.

Citgo said it was moving products from Lake Charles and “exploring alternate supply methods into other impacted markets.” Marathon Petroleum said it was “making adjustments.”

Several airlines have been transporting fuel by truck or fueling planes at destinations rather than at East Coast origins. American Airlines said it would resume on Thursday non-stop service on two long-haul flights out its Charlotte, North Carolina hub.

Delta Air Lines Chief Executive Ed Bastian said the airline has been told fuel supplies will be available “hopefully by the end of the week and as long as those predictions come true hopefully we’ll be OK.”

(Additional reporting by Laila Kearney in New York, Rich McKay in Atlanta, Tracy Rucinski in Chicago, and Timothy Gardner in Washington; Editing by Leslie Adler, Steve Orlofsky and David Gregorio)

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