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Fuel shortages crop up in Southeast, gas prices climb after pipeline hack

WASHINGTON — Lines of panicked drivers overwhelmed gas stations in the Southeast on Tuesday as rising prices fed fears of shortages in the aftermath of a ransomware attack that shut down the nation’s largest fuel pipeline.

Energy Secretary Jennifer Granholm said the region can expect a ’'crunch’' that will take several days to alleviate.

’'We have gasoline,’' she said during a White House briefing. ’'We just have to get it to the right places. And that’s why I think the next couple of days will be challenging.’'

The Colonial Pipeline, which moves about 45 percent of the East Coast’s fuel, shut down Friday after hackers infiltrated servers and encrypted its data, demanding a fee to restore access. Homeland Security Secretary Alejandro Mayorkas, who was at the briefing, said American organizations have lost more than $350 million this year as a result of ransomware attacks.

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’'The threat is not imminent,’' he said. ’'It is upon us.’'

Now consumers are seeing some of the fallout as Colonial pushes to resume service by the end of the week.

On Tuesday morning, more than 7 percent of gas stations in Virginia, 5 percent in North Carolina and nearly 4 percent in Georgia were without fuel, according to Patrick De Haan, an oil analyst at Gas Buddy. A number of stations in Alabama, Florida, and South Carolina also reported dry pumps. De Haan said fuel demand in these states spiked 40 percent on Monday, and warned against panic-buying, which would exacerbate the shortages.

Granholm said parts of Tennessee are also affected.

’'It is vital that motorists do not overwhelm the system by filling their tanks,’' De Haan said.

Meanwhile, the national average for a gallon of gasoline stood at $2.98 on Tuesday, according to AAA. That’s an 8-cent jump on the week, and a penny shy of prices not seen since November 2014.

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Granholm said there is ’'no cause for hoarding gasoline’' because the pipeline will be ’'substantially’' back online by the weekend. But signs of panic-buying flashed Tuesday as local news outlets from Florida to North Carolina reported long lines and dry pumps at locations up and down the East Coast.

Tiffany Wright, AAA spokeswoman for the Carolinas, told the Asheville Citizen-Times that any shortages were from people rushing to stock up on gas.

’'People hear something and panic,’' Wright told the Citizen-Times. ’'We’re not seeing shortages or bagged pumps. It’s still early, but what I will say is that we do have ample supply even though the Colonial Pipeline is responsible for 45 percent of the fuel going to the East Coast.’'

Granholm had a warning for service station operators: ’'We will have no tolerance for price-gouging,’' she said, and she urged consumers to inform their state attorney general’s office if they suspect it is taking place.

On Monday, the White House said it was monitoring the situation in the Southeast and trying to mitigate the effects and manage fuel supplies. The cyberattack prompted the administration to form a task force, and the Transportation Department temporarily relaxed rules to allow greater flexibility on fuel transport.

As of Tuesday, governors in Georgia, North Carolina, and Virginia had declared states of emergency and taken steps to relax fuel transport rules to ease pain at the pump.

Mayorkas said the Biden administration is prepared, if necessary, to waive the Jones Act, which forbids foreign-flagged ships from carrying cargoes between US ports. The Federal Railroad Administration is analyzing the possibility of shipping gasoline or jet fuel by train, Granholm said.

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’'These are not easy solutions,’' she said. ’'The pipe is the best way to go.’'

About 5,500 miles of Colonial pipeline moves fuel from Gulf Coast refineries to customers in the Southern and Eastern United States. The company says the pipeline reaches 50 million Americans and several major airports, including Hartsfield-Jackson in Atlanta.

’'This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. Areas including Mississippi, Tennessee, and the east coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week,’' Jeanette McGee, AAA spokeswoman, said in a statement. ’'These states may see prices increase three to seven cents this week.’'

The FBI issued a statement confirming that DarkSide, a criminal ransomware group based in Eastern Europe, was behind the cyberattack.

Ransomware attacks have become a global scourge, impeding banks, hospitals, universities, and municipalities in recent years. Almost 2,400 organizations in the United States were victimized last year, one security firm reported. But the attackers are increasingly targeting industrial sectors because these firms are more willing to pay up to regain control of their systems, experts say.

About 43 percent of infrastructure organizations victimized by such attacks submit to ransom demands, more than any other industry, according to the Sophos 2021 ’'State of Ransomware’' report. The report said that 64 percent of infrastructure organizations surveyed saw a spike in cyberattacks in 2020 and that 57 percent of IT managers said attacks had become too sophisticated for them to fend off effectively on their own.

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’'The unfortunate truth is that infrastructure today is so vulnerable that just about anyone who wants to get in can get in,’' Dan Schiappa, Sophos chief product officer, said in comments e-mailed to the Post. He called infrastructure an easy and lucrative target. ’'They’re hitting where it hurts, hedging bets on a large payout.’'

’'In cyberspace,’' Mayorkas said, ’'one is only as strong as one’s weakest link.’'