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Gas pipeline hack leads to panic buying in the Southeast


By Clifford Krauss, Niraj Chokshi and David E. Sanger


Panicked drivers scrambled to fuel their vehicles across the Southeast on Tuesday, leaving thousands of stations without gasoline as a vital fuel pipeline remained largely shut down after a ransomware attack.


The disruption to the Colonial Pipeline, which stretches 5,500 miles from Texas to New Jersey, also left airlines vulnerable, with several saying they would send jet fuel to the region by air to ensure that service would not be disrupted.


Gasoline in Georgia and a few other states rose 3 to 10 cents a gallon Tuesday, a jump typically seen only when hurricanes interrupt refinery and pipeline operations along the Gulf Coast.


The national average for a gallon of regular gasoline rose 2 cents Tuesday, with higher prices reported in the Southeast, according to the AAA motor club. The average increase was nearly 7 cents in South Carolina, 6 cents in North Carolina and 3 cents in Virginia.


Southern stations were selling two to three times their normal amount of gasoline Tuesday, according to the Oil Price Information Service, which tracks the industry. Some stations limited purchases to 10 gallons.


Nearly 8% of Virginia stations were without gasoline, more a result of panic buying than of shortage, Gas Buddy, a service that tracks gas prices, reported.


“There’s no gas, and people are getting frustrated,” said Ariyana Ward, a 19-year-old college student in Virginia Beach who waited 45 minutes to fill up. With some motorists taking time to fill cans as well as cars, she said, “people are getting into shouting matches.”


State leaders responded with measures intended to keep the flow of fuel steady and stabilize prices.


Gov. Brian Kemp of Georgia signed an executive order suspending his state’s gasoline tax, roughly 20 cents a gallon, through Saturday. He said the move would “help level the price for a little while,” and cautioned against panic buying. Gov. Roy Cooper of North Carolina, Gov. Ralph Northam of Virginia and Gov. Ron DeSantis of Florida each declared a state of emergency to suspend some fuel transport rules. DeSantis also activated the National Guard to cope with the emergency.


South Carolina’s attorney general, Alan Wilson, announced he was ready to invoke the state’s price-gouging law, making excessive overcharging a criminal offense. “I’m urging everyone to be careful and be patient,” Wilson said.


At the White House, Energy Secretary Jennifer Granholm told reporters, “We know we have gasoline; we just need to get it to the right places.” But she made no promises about when the pipeline, which was shut down to prevent the cyberattack from spreading, would resume operations, saying the company will decide Wednesday whether it is ready to do so.


She said she expected gas station operators to act “responsibly,” adding, “We have no tolerance for price gouging.”


The administration considered other steps that might alleviate shortages, including moving gasoline, diesel and jet fuel by train, or issuing a waiver for a 1920 law known as the Jones Act, which requires that maritime shipments be on vessels owned and staffed by Americans.

But it was unclear if the right kind of either rail cars or foreign-registered ships were available.

“There are no easy solutions,’’ Granholm said.


The Environmental Protection Agency administrator, Michael Regan, issued an emergency waiver for fuel air emissions Tuesday to help alleviate fuel shortages in places affected by the pipeline shutdown, including the District of Columbia, Maryland, Pennsylvania and Virginia. The waiver will continue through May 18.


Colonial Pipeline, the company that operates the pipeline, has said it hopes to restore most operations by the end of the week. The attack, which the Federal Bureau of Investigation said had been carried out by an organized crime group called DarkSide, has highlighted the vulnerability of the American energy system. The pipeline provides the Eastern United States with nearly half its transportation fuel.


Colonial has remained largely silent, answering no questions about the kind of protections it had in place on both its computer networks and the industrial controls that run the pipeline.


In a statement late in the day Tuesday, Colonial said it had manually started one part of the pipeline and delivered about 41 million gallons of fuel to various locations on its system, from Atlanta, through the Carolinas and to Linden, New Jersey.


Industry analysts said the impact of the hacking would remain relatively minor as long as the artery was fully restored soon. “With a resolution to the shutdown in sight, the cyberattack is now treated as a small disturbance by the market and prices are trimming Monday’s panic-gains,” said Louise Dickson, an oil markets analyst for Rystad Energy.


Gasoline prices normally increase at this time of year as the summer driving season approaches. Even before Colonial Pipeline suspended operations, average national gas prices were rising nearly a penny per gallon each day.


Higher fuel prices affect lower-income people the most because they spend the highest percentage of their incomes on gasoline and typically drive less fuel-efficient vehicles. That makes gasoline prices a potential political issue after they have been relatively low for several years.


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