Colonial faces deadline to decide on hacked US fuel pipeline restart

Fuel shortages that first emerged in South Carolina have metastasized across a wide swath of the South and East.
Fuel shortages that first emerged in South Carolina have metastasized across a wide swath of the South and East.PHOTO: EPA-EFE

NEW YORK (BLOOMBERG) - Colonial Pipeline told federal officials it will know by late Wednesday (May 12) whether it is safe to restart gasoline and diesel flows that have been on hold since criminal hackers targeted the company last week.

Beyond that deadline, given to US Energy Secretary Jennifer Granholm by Colonial chief executive officer Joe Blount, details about when the biggest North American fuel pipeline will recover have been scant. It's been more than 24 hours since Colonial issued a statement pledging to be back online by the weekend, and the growing frustration among political leaders is palpable as gas stations across the East and South run dry.

Granholm's boss, President Joe Biden, is also facing increasing pressure to marshal federal resources to blunt the growing crisis that threatens to hobble the post-pandemic economic recovery. The administration, which took several measures on Tuesday to ease shortages, will give a House briefing on the cyberattack at 6pm Washington time on Wednesday (6am Thursday Singapore time).

"This is something that demands really serious federal attention," Florida Governor Ron DeSantis said on Tuesday, prior to declaring a state of emergency. "The US government needs to be involved, they need to help mitigate this. My fear is, you have these gas shortages, it's going to cause a lot of problems for people."

Fuel shortages that first emerged in South Carolina have metastasized across a wide swath of the South and East, shutting pumps at convenience stores and truck stops from Tennessee to Tallahassee. Granholm told a media briefing that even if Colonial decides to restart on Wednesday, it'll take days longer to fully restore shipments.

The situation across the southeastern states is "rapidly deteriorating", Brad Jenkins, a senior vice president at truck-stop owner Pilot, said in an email.

The White House relaxed some environmental rules across 12 states and Washington DC to help bring in more fuel, even as some Gulf Coast refiners were forced to curtail output to cope with logjams of fuel they can't ship to eastern markets. The Department of Transportation also announced initial steps that could permit foreign tankers to transport gasoline and diesel to East Coast ports.

The Colonial pipeline is the most important conduit for distributing gasoline, diesel and jet fuel in the US, connecting Gulf Coast refineries to population centers from Atlanta to New York and beyond. Each day, it ships about 2.5 million barrels (105 million gallons), an amount that exceeds the entire oil consumption of Germany.

The vital economic lifeline has been shut since late Friday, prompting a run on filling stations by panicked motorists in several states. Even when the pipeline is restored to full service, it'll take about two weeks for gasoline stored in Houston to reach East Coast filling stations, according to the most recent schedule sent to shippers. For diesel and jet fuel, the transit time is even longer - about 19 days - because they are heavier and move more slowly.

Granholm said she's been in regular contact with the Colonial CEO in recent days to track the company's progress in neutralising the ransomware attack.

"By the end of business tomorrow, Colonial will be in a position to make the full restart decision," she said. "But even after that decision is made, it will take a few days to ramp up operations."

Colonial issued a statement hours later confirming the energy secretary's account.