Hacked pipelines can remain closed for several days, raising concerns about fuel supply

Houston — Largest Oil Operator pipeline Between Texas and New York, which were closed after the ransomware attack, they did not say when they would reopen on Sunday, expressing concern about the critical infrastructure that carries nearly half of the East Coast’s fuel supply.

Shutdowns have had little impact on gasoline, diesel and jet fuel supplies so far, but some energy analysts have said that prolonged outages have led to higher prices for pumps along the east coast. Warned that a small airport could compete for jet fuel.

The pipeline operator’s colonial pipeline is developing a “system restart plan” on Sunday afternoon, restoring service to some small lines between the terminal and the delivery point, but “confident that it is safe.” Only if you do, will you bring the entire system back online. ” To do so. “

The company, which closed its pipeline on Friday, admitted on Saturday that it was the victim of a ransomware attack by a criminal group. That is, a hacker can take company data hostage until you pay the ransom. Privately owned colonial pipelines do not know if they paid the ransom. By not mentioning a timeline to resume on Sunday, the company updated its question as to whether the operation of the pipeline could still be at risk.

The· FBI On Monday, he confirmed previous reports, stating that the attack was caused by DarkSide ransomware, a type of computer virus deployed by the group of the same name.

The closure of the 5,500-mile pipeline was a nasty sign that the country’s energy infrastructure was vulnerable to criminal groups or cyberattacks from the country.

Energy experts predicted that traders would see Sunday’s company announcement as a sign that the pipeline would remain closed for at least a few days. Tom Croza, global head of energy analysis for oil price information services, said gasoline futures are expected to rise 2-3 percent from Sunday night and Monday.

Nationally, the AAA Motor Club reported: Average price of regular gasoline It didn’t drop from $ 2.96 a gallon from Saturday to Sunday. New York prices are stable at $ 3, and in some southeastern states, such as Georgia, which are considered particularly vulnerable if the pipeline does not resume immediately, prices are 1 gallon. It rose a fraction.

The pipeline attack occurred at the beginning of the summer driving season, when fuel prices were traditionally rising anyway.

J. Hatfield, Chief Executive Officer of Infrastructure Capital Management, investing in natural gas and oil pipelines and storage, said:

Goldman Sachs said in a Sunday report that the rise in fuel prices on the East Coast “is likely to be temporary” because there was no physical damage to the pipeline.

Experts have said several airports that rely on jet fuel pipelines, including Nashville, Tennessee. Baltimore-Washington; Charlotte and Lower Durham, North Carolina, can struggle later in the week. Airports usually store enough jet fuel for 3-5 days of operation.

White House officials held a meeting on pipeline attacks over the weekend. White House spokesman Jen Psaki said in a tweet that he was looking for ways to “mitigate potential supply disruptions.”

To mitigate the impact, the Ministry of Transport lifted some restrictions on the transportation of gasoline, diesel, and jet fuel by road on Sunday to address what is called an “emergency situation.”

One of the reasons prices haven’t skyrocketed so far is that the East Coast generally stores enough fuel. And although fuel consumption is increasing, it remains down from pre-pandemic levels.

Nevertheless, the supply system has some vulnerabilities. Southeastern stockpiles are slightly lower than normal during this period. The northeastern refinery’s capacity is limited, and the Northeast Gasoline Reserve, a supply held for emergency interruptions, contains only a total of 1 million barrels of gasoline in New York, Boston, and South Portland, Maine. Not done.

According to a report released Saturday by Washington-based research firm Clearview Energy Partners, this is not enough for average daily local consumption. “It depends a lot on the duration of the outage,” the report said.

New York Harbor spot gasoline prices rise by more than 25% when Hurricane Harvey crippled some refineries on the Gulf Coast in 2017 and stopped the flow of petroleum product colonial pipelines to the northeast for nearly two weeks And it took almost a month to relax.

Regional refineries can increase supply from the Kinder Morgan plantation pipeline, which operates between Louisiana and northern Virginia, but their capacity is limited and major north of Washington, DC. It has not reached the metropolitan area.

The East Coast has ample ports for importing petroleum products from Europe, Canada and South America, but this can take some time. Tankers sailing from the port of Rotterdam in the Netherlands at speeds of up to 14 knots can take up to two weeks to travel to the port of New York.

Mr Croza said the Biden administration could suspend the Jones Law. The Jones Law requires goods shipped between US ports to be shipped by US-made and operated vessels. This will allow tankers of foreign vessels to move additional fuel barrels from Gulf ports to Atlantic ports. The Jones Law is usually interrupted in emergencies such as hurricanes.

“If the colonial software problem persists, we can argue that the Biden administration may consider such a move sooner rather than later,” Croza said.

Hacked pipelines can remain closed for several days, raising concerns about fuel supply

Source link Hacked pipelines can remain closed for several days, raising concerns about fuel supply

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