Colonial Pipeline attack: Will gas prices rise nationwide?

What happened in the Colonial Pipeline ransomware attack

Colonial Pipeline, the operator of a major pipeline system that transports fuel across the East Coast said it had been victimized by a ransomware attack and had halted all pipeline operations to deal with the threat.

LOS ANGELES - The Colonial Pipeline, which delivers about 45% of the fuel consumed on the East Coast, was hit on Friday with a cyberattack by hackers who lock up computer systems and demand a ransom to release them.

The attack raised concerns, once again, about the vulnerability of the nation’s critical infrastructure. It also spurred concerns about gas prices for the rest of the country.

In North Carolina, 28% of gas stations were out of fuel, according to Gasbuddy.com, a technology firm that tracks real-time fuel prices across the country. In Raleigh-Durham it was worse, with 72% of gas stations out of fuel.

There is no gasoline shortage, according to government officials and energy analysts, but if the pipeline shutdown continues past the weekend, it could create broader fuel disruptions.

There is a problem with fuel distribution, not production

A Gasbuddy spokesperson said because the attack has not impacted gasoline production but rather distribution, prices should not escalate dramatically.

"Prices should not be affected really beyond a penny or two for the reason that production of gasoline is not affected only delivery of already produced gasoline, so the primary and really only major concern is outages at this point," the spokesperson said.

The pipeline runs from the Gulf Coast to the New York metropolitan region, but states in the Southeast are more reliant on the pipeline. Other parts of the country have more sources to tap. For example, a substantial amount of fuel is delivered to states in the Northeast by massive tankers.

"What you’re feeling is not a lack of supply or a supply issue. What we have is a transportation issue," Jeanette McGee, spokeswoman for the AAA auto club told the Associated Press. "There is ample supply to fuel the United States for the summer, but what we’re having an issue with is getting it to those gas stations because the pipeline is down."

Panic buying is a problem

But ample supply hasn’t stopped consumers from panic buying, resulting in mass shortages along the East Coast.

A U.S. government agency even took to Twitter to issue safety reminders urging people to use appropriate containers for gasoline since people were reportedly filling plastic bags with fuel.

"Do not fill plastic bags with gasoline," the first tweet from the U.S. Consumer Product Safety Commission said Wednesday morning. "Use only containers approved for fuel."

READ MORE: 'Do not fill plastic bags with gasoline': U.S. agency tweets safety reminders amid gas shortage

USCPSC is a government agency in charge of informing the public of risks of injury or death associated with the use of the thousands of types of consumer products under the agency's jurisdiction.

"When using a gas canister, never pour gasoline over or near an open flame," the agency went on to tweet. "NEVER pour flammable liquids from a container over an exposed flame."

This panic buying has resulted in hundreds of gas stations across the nation — mostly on the East Coast — running out of fuel resulting in prices in those areas hitting a seven-year high.

Industry experts have also stressed for drivers not to panic and rush to the gas pump.

"If you don't IMMEDIATELY need gas, our experts recommend you don't fill up. A surge in demand only makes the situation worse," GasBuddy wrote on Twitter.

GasBuddy turned on its fuel availability tracker for drivers in Alabama, Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee and Virginia in response to the pipeline shutdown.

Experts say gas prices rise this time of year anyway

The national average price for a gallon of gasoline also ticked above $3 for the first time since 2016 Wednesday, according to the AAA.

But AAA says prices typically begin to rise around this time every year.

"You go to some states, and you’re going to see much higher increases, especially in the South, because that’s where you’re seeing the largest impact in terms of strain of gasoline, or strain of people," McGee said.

All things considered, experts say the recent cyberattack combined with a rise in travel as summer approaches and more states reopen amid COVID-19 vaccination efforts could result in a rise in fuel prices.

The AAA expects more than 37 million people to travel at least 50 miles from home during Memorial Day weekend, up 60% from last year, which was the lowest since AAA began keeping records in 2000.

But multiple U.S. agencies are coordinating efforts to avert any potential shortages, should they arise.

Government agencies working to avert a fuel crisis

The White House said Wednesday that the Department of Transportation is now allowing Alabama, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New Jersey, North Carolina, Tennessee and Virginia to use interstate highways to transport overweight loads of gasoline and other fuels under existing disaster declarations.

The department’s Maritime Administration completed a review of potential actions available under the Jones Act, a U.S. maritime law that requires shipments between U.S. ports, including fuel, to be moved by American-flagged ships.

The Department of Homeland Security is prepared to review any temporary Jones Act waiver requests from companies if there is not sufficient capacity to get to regions suffering fuel shortages, said White House press secretary Jen Psaki on Wednesday.

In another attempt to sustain the price of gas to avert a national crisis, the governors of Florida, Virginia and North Carolina each declared a state of emergency this week to help ensure a sufficient supply of fuel following a cyberattack. They noted their states’ heavy reliance on the pipeline.

Georgia Gov. Brian Kemp also suspended state taxes on motor fuels through Saturday. Georgia collects a gasoline tax of 28.7 cents per gallon and a diesel tax of 32.2 cents per gallon.

"It will probably help level the price at the pump off for a little while," Kemp told reporters at DeKalb-Peachtree Airport in Chamblee, an Atlanta suburb.

But officials continued to urge consumers to stop panic buying as it is a major contributor to shortages and price hikes.

Kemp urged people not to hoard gasoline, saying he expected the situation to be resolved soon.

Who was behind the Colonial Pipeline attack?

On Monday, the FBI named DarkSide as the criminal syndicate whose ransomware was used. The group's members are Russian speakers, and the syndicate’s malware is coded not to attack networks using Russian-language keyboards. Russia, however, denied any involvement in the attack.

Ransomware scrambles data that can only be decoded with a software key after the victim pays off the criminal perpetrators. Hospitals, schools, police departments and state and local governments are regularly hit.

Such attacks are difficult to stop in part because they’re usually launched by criminal syndicates that enjoy safe harbor abroad, mostly in former Soviet states. An epidemic of ransomware attacks has gotten so bad that Biden administration officials recently deemed them a national security threat.

Experts say the attack on the Colonial Pipeline also pointed out vulnerabilities of the nation's energy sector, and other critical industries whose infrastructure is largely privately owned.

"We need to invest to safeguard our critical infrastructure," President Joe Biden said Monday. Energy Secretary Jennifer Granholm said the attack "tells you how utterly vulnerable we are" to cyberattacks on U.S. infrastructure.

This story was reported from Los Angeles. Kelly Hayes and The Associated Press contributed.