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Fuel shortages worsen on sixth day of top U.S. fuel pipeline outage

Fuel shortages worsened in the southeastern United States on Wednesday, as the shutdown of the largest U.S. fuel pipeline network entered its sixth day and gasoline stations ran out of supply in some cities.

A ransomware attack on the Colonial Pipeline last week halted 2.5 million barrels per day of fuel shipments in the most disruptive cyberattack on U.S. energy infrastructure. The pipeline stretches 5,500 miles (8,850 km) from U.S. Gulf Coast oil refineries to consumers in Mid-Atlantic and Southeast states.

In Washington, D.C., top Biden administration officials met late Tuesday to discuss the incident and were considering ways to alleviate gasoline supply shortages, the White House said. Congressional committee members have asked that a White House interagency task force provide a formal briefing to discuss the federal response to the cyberattack.

Colonial’s chief executive has indicated that by the end of the day Wednesday the company will be able to decide whether it can make a full restart, Energy Secretary Jennifer Granholm said Tuesday during a White House briefing. But she added the restart could take days to complete.

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

The supply crunch, amid panic buying by motorists, has brought long lines and high prices at gas stations ahead of the Memorial Day holiday weekend at the end of this month, which traditionally marks the start of the peak summer driving season.

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

Nearly 60% of gas stations in metro Atlanta were without gasoline on Wednesday, tracking firm GasBuddy said. More than 70% of stations were out in metro Charlotte and Raleigh, North Carolina, and Pensacola, Florida. The states of Virginia and South Carolina also saw relatively high outages.

LONG LINES

Stevenson Rosslow, 47, was filling up his Lexus with regular gas at a BP station in south Atlanta on Wednesday morning.

“This takes premium, but they’re out,” said Rosslow, the owner of the Wrecking Bar Brewpub in Atlanta’s Reynoldstown neighborhood. “Even at that, the price jumped to what, $3.39?”

The gas station Rosslow stopped at was the fourth he had tried. “I think we’re having a problem here because of hoarding,” he said.

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. DarkSide is believed to be based in Russia or Eastern Europe.

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

REFINERS, AIRLINES REACT

It is unknown how much money the hackers are seeking, and Colonial has not commented on whether it would pay.

Gulf Coast refiners that rely on the Colonial Pipeline to move fuel to market 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 its Lake Charles refinery and “exploring alternate supply methods into other impacted markets.” Marathon Petroleum, another large refiner, said it was “making adjustments” to its operations due to the pipeline shutdown.

Colonial also serves major U.S. airports, including Atlanta’s Hartsfield-Jackson Airport, the world’s busiest by passenger traffic.

Airlines with large operations out of the East Coast have been transporting fuel by truck or fueling planes at their destination rather than their East Coast origin due to the outage. American Airlines has made changes to two long-haul flights out of Charlotte, North Carolina – one of its hub airports – through Friday.
Source: Reuters (Reporting by Stephanie Kelly in New York; Additional reporting by Rich McKay in Atlanta and Tracy Rucinski in Chicago; Editing by Leslie Adler and Steve Orlofsky)

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