A police officer guards the gate to the intersection and tank terminal of the Colonial Pipeline Co. Pelham in Pelham, Alabama, USA, on Monday, September 19, 2016.
Bloomberg | Bloomberg | Getty Images
Colonial Pipeline is working on restoring service and has some minor side lines between terminals and delivery points that are back in service, the company said on Sunday afternoon.
The company, which operates the country’s largest fuel pipeline, temporarily ceased operations on Friday due to a ransomware attack.
The four main lines remain offline. Colonial said a restart schedule was being developed, but no schedule was given for when full service would be restored.
“We are in the process of restoring service to other side panels and will only bring our entire system back online if we believe it is safe to do so and fully complies with all federal regulations,” Colonial said in a statement.
The federal government is working to avoid supply disruptions after the company ceases operations, US Secretary of Commerce Gina Raimondo said Sunday morning.
“That’s something that companies have to worry about now,” Raimondo said during an interview on CBS ‘Face the Nation. “Unfortunately, such attacks are becoming more common. They are here to stay.”
President Joe Biden has been notified of the ransomware attack, and the FBI said it is working closely with Colonial Pipeline and government partners to address the situation.
The Department of Energy is leading the federal response, according to Colonial. The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency coordinates with the company.
Colonial said it learned Friday it was “the victim of a cybersecurity attack” and has since shut down 5,500 miles of pipeline that carries nearly half of the east coast’s fuel supplies, raising concerns of gasoline, diesel and jet fuel shortages .
The pipeline is the largest refined product pipeline in the nation, according to Colonial.
“Everything is fine at the moment,” said Raimondo. “We are working closely with the company, state and local authorities to ensure that they are back to normal operations as quickly as possible and that there are no disruptions in supply.”
Secretary of Commerce Gina Raimondo testifies before the Senate Funds Committee during a hearing in the Dirksen Senate office building on Capitol Hill in Washington, DC on April 20, 2021.
Chip Somodevilla | Pool | Reuters
The company connects refineries on the Gulf Coast with more than 50 million people in the southern and eastern United States, according to its website.
The final impact of the attack on fuel prices is unclear as there is no schedule for Colonial to resume operations, according to Bernadette Johnson, senior vice president of energy and renewable energies at Enverus. Johnson predicted a short-term spike in refined product prices in the face of a short-term outage.
“Refined product storage in both the USGC and the Northeast can mitigate the effects of a short-term event,” Johnson said on Saturday.
However, according to John Kilduff, a partner with Again Capital in New York, if the shutdown persists, fuel shortages in the country could develop rapidly. Kilduff predicted that gas prices will skyrocket on Sunday night with the opening of futures trading if the company does not resume business by then.
Johnson agreed: “If this outage continued for an extended period of time, there would be product shortages in the northeast and a glut of products in the USGC that would affect prices across the country,” she said.
Jay Hatfield, founder and CEO of Infrastructure Capital Management in New York, said a temporary outage will likely cause national gas retail prices to rise above $ 3 a gallon for the first time since 2014.
Gas futures rose 0.6% to $ 2.1269 a gallon and diesel futures rose 1.1% to $ 2.0106 a gallon on the New York Mercantile Exchange on Friday.
– CNBC’s Pippa Stevens contributed to this report