How the Colonial Pipeline Became an Important Artery for Fuel

HOUSTON – Operators of a critical fuel pipeline stretching from Texas to New Jersey shut down for days after the ransomware attack, saying on Monday it expected to restore most operations by the end of the week.

Federal investigators said the attackers aimed at poorly preserved corporate data rather than directly controlling the pipeline, which carried about one-half of motor and aviation fuel consumed in much of the Northeast and South.

the operator, Colonial pipeline, Apparently preventing hackers as a precaution, to prevent hackers from doing anything further, as if they had stolen highly sensitive information from corporate computers, in which case the system was shut down or damaged.

Colonial said that this is a process of reviving the pipeline sections in consultation with the Department of Energy. It said its plan aims to “restore operational service by the end of the week.” However, the company cautioned that “this situation is fluid and continues to grow.”

Attack, which The Federal Bureau of Investigation said it was done An organized crime group called Darkside has highlighted the vulnerability of the American energy system.

Part of that vulnerability reflects Texas’ increased role in meeting domestic demand for oil and gas over the past decade and a half, putting the Northeast on an aging pipeline system to bring fuel rather than refining locally imported fuel Have to trust.

Since the closure of the pipeline, there have been no long lines at gasoline stations, and because many traders expected a halt, the market reaction was muted. Nationwide, regular petrol prices climbed only half a percent from Sunday to Monday to $ 2.97, though the company could not set a timetable for restarting the pipeline. According to the AAA Motor Club, New York State prices held steady at $ 3 a gallon.

“Potentially it would be inconvenient,” said Ed Hirs, an energy economist at the University of Houston. “But this is not a big deal because there is storage in the Northeast and all the big oil and gas companies can redirect the refined product to marine organisms when needed.”

The Colonial Pipeline is based in Alpharetta, Ga., And one of the largest in the United States. It can carry about three million gallons of fuel a day over 5,500 miles from Houston to New York. It is located in most of the southern states, and has branches from the Atlantic coast to Tennessee.

Some of the largest oil companies, including Phillips Petroleum, Sinclair Pipeline and Continental Oil, joined in 1961 to begin construction of the pipeline. It was a time of rapid growth in highway driving and long distance air travel. Today the Colonial Pipeline, which is private, is owned by Royal Dutch Shell, Koch Industries and several foreign and domestic investment firms.

This is particularly important for the functioning of many East American airports, which typically hold sufficient inventory for only three to five days of operation.

There are several reasons, including regulatory restrictions on pipeline construction that go back nearly a century. There is also a restriction on the use of foreign vessels to move products between US ports, as well as the road transport of fuel.

But the main reason comes close to home. Over the past two decades, at least six refineries in New Jersey, Pennsylvania and Virginia have gone out of business, reducing the amount of crude oil processed in the region by more than half, from 1,549,000 to 715,000 barrels weekly.

“Those refineries didn’t just make money,” said Tom Cloja, global head of energy analysis at the Oil Price Information Service.

The reason for his downfall is “energy independence” which has been the goal of the White House since the Nixon administration. As shale exploration and production accelerated around early 2005, refineries on the Gulf Coast had easy access to natural gas and oil produced in Texas.

This gave them a huge competitive advantage over East Coast refineries that imported oil from the Northeast or from North Dakota by rail once boomed from there. As local refineries closed their doors, the colonial pipeline became increasingly important as a drain from Texas and Louisiana refineries.

The Midwest has its own pipelines from the Gulf Coast, but the East Coast closed the refineries, while the Midwest has opened some new plants and expanded others to process Canadian oil from the Alberta oil sands over the past 20 years. California and the Pacific Northwest have sufficient refineries to process crude produced in California and Alaska, as well as South America.

Not a lot The Northeast Supply System is flexible and flexible.

Several hurricanes have damaged pipelines and refineries on the Gulf Coast in the past, and the East Coast was able to manage. The federal government stores millions of gallons of crude oil and refined products for emergencies. Oil can be imported from Europe, Canada and South America from refineries, although trans-Atlantic cargo may take up to two weeks to arrive.

When Hurricane Harvey damaged Texas in 2017, colonial pipeline shipments to the Northeast were suspended for nearly two weeks, damaging the refineries. Gasoline prices in New York Harbor quickly climbed more than 25 percent, and additional costs were passed on to motorists. It took more than a month to return to previous levels.

The hacking of a large pipeline, while not a major problem for motorists, is a sign of the times. Criminal groups and even nations can threaten power lines, personal information and even banks.

The group responsible for the pipeline attack, Darkside, usually locks up the data of its victims using encryption, and threatens to release the data until the ransom is paid. The Colonial Pipeline has not said whether it intended to pay the ransom.

“The unfortunate truth is that infrastructure today is so weak that anyone who wants to enter it can think of it,” said Dan Schiappa, chief product officer at Sophos, a British security software and hardware company. “Infrastructure is an easy – and attractive – target for attackers.”

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