Fuel shortages crop up in Southeast, gas prices climb after pipeline hack

In Atlanta, 1 of every 5 gas stations was reported to be out of fuel Tuesday evening.

"Look how crazy we're all getting, over every little thing," said Allan Hardy, a plumber who had driven from Myrtle Beach, S.C., to Wilmington, N.C., and saw long lines at every service station on the road, save for those that had already run out of gas. "And the only reason this shortage isn't worse is that a lot of people aren't working right now. Today it's our oil pipeline, but what will it be tomorrow? If this kind of thing comes at another time, you just can't gauge how bad it might get."

In Washington, Energy Secretary Jennifer Granholm said the Southeast can expect a "crunch" that will take several days to alleviate.

"We have gasoline," she said during a White House briefing. "We just have to get it to the right places. And that's why I think the next couple of days will be challenging."

She said Colonial Pipeline officials had told her that a decision on a "full restart" could come as soon as Wednesday evening.

The Colonial Pipeline system, which moves about 45% of the East Coast's fuel, shut down Friday after hackers thought to be based in the former Soviet Union infiltrated servers and encrypted its data, demanding a fee to restore access. Homeland Security Secretary Alejandro Mayorkas, who was at the White House briefing, said American organizations have lost more than $350 million this year as a result of ransomware attacks.

"The threat is not imminent," he said. "It is upon us."

Now consumers are seeing some of the fallout as Colonial pushes to resume service by the end of the week.

As of Tuesday, governors in North Carolina, Georgia and Virginia had declared states of emergency and taken steps to relax fuel transport rules to ease pain at the pump.

More than 7% of gas stations in Virginia, 8% in North Carolina and 5% in Georgia were without fuel late Tuesday afternoon, according to Patrick De Haan, an oil analyst at Gas Buddy. A number of stations in Florida, Alabama and South Carolina also reported dry pumps. De Haan said fuel demand in these states spiked 40% on Monday, and cautioned against panic-buying, which will only exacerbate the shortages.

"It is vital that motorists do not overwhelm the system by filling their tanks," De Haan said in analysis.

But plenty of motorists weren't listening.

The owner of Masonboro Country Store in Wilmington, Musa Agil, said lines began forming just after 6 a.m. and had not abated all day, blocking the flow of traffic on two-lane Masonboro Loop Road. He spent the day "managing traffic and trying to keep the peace" as some motorists cut lines and others filled up a dozen tanks and jugs.

By 3 p.m. Agil was down to his last 200 gallons and told the packed parking lot that he would soon have to shut down. "Some people are selfish, taking more gas than they need," he said. "But most people are just scared."

Granholm said there is "no cause for hoarding gasoline" because the pipeline will be "substantially" back online by the weekend. But local news outlets from Florida to North Carolina reported long lines and dry pumps.

The national average for a gallon of gasoline stood at $2.98 on Tuesday, according to AAA. That's an 8-cent jump on the week, and a penny shy of prices not seen since November 2014.

Granholm had a warning for service station operators: "We will have no tolerance for price-gouging," she said, and she urged consumers to inform their state attorney general's office if they suspect it is taking place.

Some Republican officeholders took shots at the Biden administration over the shutdown. Rep. Madison Cawthorn, R-N.C., ignoring four years of friendliness among some in the GOP toward Moscow, told Fox News, "The Biden administration must finally step up and acknowledge that their weak stance on Russia has real-world consequences."

At a gas station just down the road from Agil's, drivers spread blame for the debacle all around: at the Biden administration; at Rep. Alexandria Ocasio-Cortez, D-N.Y., and the Green New Deal; at the gas stations and oil companies supposedly hoarding and gouging; and at the Russians and their hackers. Finally one man in a black pickup truck pointed the finger somewhere closer to home.

"This is our fault," Devin Singer of Wilmington said. "This whole thing. The people's fault. Same thing with the whole toilet paper shortage. Everybody wants something and nobody has it, so we all freak out and then nobody can get it. It's mass hysteria."

Mayorkas said the Biden administration is prepared, if necessary, to waive the Jones Act, which normally forbids foreign-flagged ships from carrying cargoes between U.S. ports. The Federal Railroad Administration is analyzing the possibility of shipping gasoline or jet fuel by train, Granholm said.

"These are not easy solutions," she cautioned. "The pipe is the best way to go."

The Colonial Pipeline carries fuel from Gulf Coast refineries to customers on the East Coast. The company says the pipeline provides fuel for 50 million Americans and several major airports.

"This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. Areas including Mississippi, Tennessee and the east coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week," Jeanette McGee, AAA spokeswoman, said in a statement. "These states may see prices increase three to seven cents this week."

The FBI issued a statement confirming that DarkSide, a criminal ransomware group based in Eastern Europe, was behind the cyberattack.

Ransomware attacks have become a global scourge, affecting banks, hospitals, universities and municipalities in recent years. Almost 2,400 organizations in the United States were victimized last year alone, one security firm reported. But the attackers are increasingly targeting industrial sectors because these firms are more willing to pay up to regain control of their systems, experts say.

Roughly 43% of infrastructure organizations victimized by such attacks submit to ransom demands, more than any other industry, according to the Sophos 2021 "State of Ransomware" report. The report said that 64% of infrastructure organizations surveyed saw a spike in cyberattacks in 2020 and that 57% of IT managers felt such attacks had become too sophisticated for them to fend off effectively on their own.

"The unfortunate truth is that infrastructure today is so vulnerable that just about anyone who wants to get in can get in," Dan Schiappa, Sophos chief product officer, said in comments emailed to The Post. He called infrastructure an easy and lucrative target. "They're hitting where it hurts, hedging bets on a large payout."

"In cyberspace," Mayorkas said, "one is only as strong as one's weakest link."

Analysts have focused on the vulnerabilities of America's aging infrastructure; the Colonial Pipeline system was installed in the 1970s. But some warn that new technologies are also at risk of cyberattack.

Power grid infrastructure is a likely target, said Pavel Molchanov, an energy analyst with Raymond James. The principal advantages of the smart grid - digitization and decentralization - also offer more pathways for cybercriminals to target, he said.

Elias Bou-Harb, an associate professor at the University of Texas at San Antonio, has studied electric vehicle charging stations, and in an unpublished paper he writes: "The EV charging ecosystem - one of the world's most proliferating ecosystems - suffers from critical vulnerabilities within its most fundamental entities." In the rush to install charging stations across the country, he wrote, vendors have paid too little attention to keeping them secure from hackers.