US Declares Regional State of Emergency After Colonial Fails to Restart Hacked Pipeline

Traffic on I-95 passes oil storage tanks owned by the Colonial Pipeline Company in Linden, N.J., on Sept. 8, 2008. Mark Lennihan/AP Photo

The U.S. Department of Transportation declared a regional state of emergency after the Colonial Pipeline suffered a cyberattack over the weekend.

The attack on the Colonial Pipeline, considered one of the most disruptive ransomware schemes ever, has already disrupted fuel supply across the East Coast and triggered sales restrictions at gas stations.

“This Declaration addresses the emergency conditions creating a need for immediate transportation of gasoline, diesel, jet fuel, and other refined petroleum products and provides necessary relief,” the Department of Transportation (DOT) said on Sunday night.

The affected states, according to the agency, are Alabama, Arkansas, District of Columbia, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia.

Meanwhile, White House press secretary Jen Psaki wrote that “as the Administration works to mitigate potential disruptions to supply as a result of the Colonial Pipeline incident, [the DOT] is taking action today to allow flexibility for truckers in 17 states.”

What the emergency declaration entails is lifting driver restrictions on fuel truckers to facilitate deliveries to the 17 affected states. If the outage continues, the DOT will likely take additional action.

“When a driver is moving from emergency relief efforts to normal operations a 10-hour break is required when the total time a driver operates conducting emergency relief efforts, or a combination of emergency relief and normal operation, equals 14 hours,” according to the DOT’s declaration.

The southeastern United States would likely be the first to see price increases at retail pumps, and demand has already picked up as drivers fill their tanks, analysts have said. The southeast is the most dependent on the line and has fewer alternatives than states further north, and has seen prices spike during previous shutdowns.

“My biggest concern, as far as the consumer goes, is that you end up with a run on the gasoline supplies at the gas station, further exacerbating what is happening at the terminals,” said Andrew Lipow, president of consultants Lipow Oil Associates LLC, according to the Reuters news agency.

On Sunday night, the Colonial Pipeline Company said in an update that it is developing “a system restart plan,” adding that its four main lines for transporting fuel are offline, while it has taken “additional precautionary measures” to deal with its security following the cyberattack.

But it noted that “some smaller lateral lines between terminals and delivery points are now operational,” and it is “in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations.”

If the pipeline isn’t quickly reopened, there will be a sharp price increase in the coming days, said Patrick De Haan, the head of GasBuddy, a petroleum data provider.

“We’re realizing the gravity of it is maybe worse than what we’d expected,” De Haan told the Financial Times. “There’s still a little breathing room, we’re starting to run low on it. But Monday, Tuesday if there’s no news, you know we’re dealing with something fairly significant.”

Reuters contributed to this report.