Higher prices, panic buying reported after pipeline hack

Some gas stations ran out of fuel in North Carolina after the Colonial Pipeline was shut down by hackers demanding a ransom.


Some gas stations around North Carolina ran out of gas, and some areas reported long lines at the pumps.

Four days after a ransomware hack shut down the Colonial Pipeline, the largest pipeline serving the East Coast, gas prices inched up in North Carolina. The average price for a gallon of regular in the state went up about 10 cents since Monday, according to AAA.

The FBI accused a criminal group called Darkside for the ransomware attack, which means the hackers took control of part of the company’s computers or data and are demanding a ransom.

The pipeline delivers about 45% of the gas to states in the Southeast, according to GasBuddy, a website that tracks gas prices. It’s the primary pipeline for fuel supplies in North Carolina, state officials said.

Vehicles line up at the pumps in the Asheville area on Tuesday. Vanessa Leon – Spectrum News 1

The pipeline runs from Texas to New York.

State and federal officials have stepped in to waive some regulations and make it easier for gasoline to be trucked to stations.

Federal officials are also looking at other backup plans in case the pipeline can’t get fuel moving quickly. The federal Department of Transportation is looking at ships and rail lines to potentially help deliver gasoline.  

Gov. Roy Cooper declared a state of emergency Monday to suspend rules about how long truckers can drive and weight restrictions for trucks delivering fuel.

“Today’s emergency declaration will help North Carolina prepare for any potential motor vehicle fuel supply interruptions across the state and ensure motorists are able to have access to fuel,” Cooper said Monday.

On Twitter Tuesday, the governor said, “I have talked today with federal officials including Energy Secretary Jennifer Granholm and we have a full court press to get the Colonial Pipeline back up and fully operating quickly.”

“Report price gouging and please don’t rush to top off your tanks,” Cooper said.  

But lines at some gas stations across the state show many people were out filling up their tanks.

“We’re really in a precarious moment,” said Tim Kraft, a supply chain expert at N.C. State University. “We’re starting to see supply shortages occur, in part due to a lack of supply but also in part due panic buying.”

“But as we get later into the week, potentially into the weekend and maybe next weekend, we really could start to see shortages become more common,” he said.

It’s not clear when the pipeline could be back up and running, but Colonial said it’s trying to get the pipeline back online as soon as it can. The FBI is investigating and the Biden administration has said it’s working with the company to get fuel running through the pipeline again.

“The real question is, how quick is the pipeline going to be able to get back up?” Kraft said. If the company can get it back up in the next few days, the impact will be minimal. But if the shutdown stretches out beyond that, it could become more of a problem.

Kraft said any gas shortages won’t be fixed as soon as the pipeline is running again. “If we have a delay of supply, if we have a delay of a week, that could hurt us for a couple weeks,” he said.

Some airlines have already started to adjust routes from the East Coast because of a shortage of jet fuel, Kraft said. Long-haul routes from the East Coast could make an extra stop to fuel up.

“A flight from the East Coast to Honolulu, they might stop in Dallas to refuel instead of doing the long haul,” he said.

Kraft said supply chains, like moving fuel from the Gulf up the East Coast, need to plan more for disruptions and how to handle them.

“Right now, the oil and gas industry, Colonial, they’re going through the exact kind of disruption risk planning, having to come up with stuff on the fly, that at the start of the pandemic you saw a lot of retail supply chains having to deal with,” he said.

“It’s really forcing a lot of companies to reevaluate, ‘what is our backup plan?’” Kraft said. 



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