“All fingers on deck” to avert disruptions, says the commerce secretary
Storage tanks stand at Pelham Junction and the Colonial Pipeline Co. tank terminal in Pelham, Alabama, USA on Monday, September 19, 2016.
Luke Sharrett | Bloomberg | Getty Images
US Commerce Secretary Gina Raimondo said Sunday the federal government was working to avoid disruptions to supplies after Colonial Pipeline, the operator of the country’s largest fuel pipeline, temporarily suspended all operations on Friday due to a ransomware attack.
“This is something that companies have to worry about now,” Raimondo said during an interview on CBS’s “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 monitors potential fuel effects and the Department of Homeland Security’s Agency for Cybersecurity and Infrastructure Security coordinates with the company.
Colonial Pipeline announced Friday that it was “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 fears of a spot shortage of gasoline, diesel and jet fuel.
“At the moment everything is fine,” said Raimondo. “We are working closely with company, state and local government employees to ensure they are back to normal operations as soon as possible and that supplies are not interrupted.”
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 to 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