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The company, the operator of the country’s largest fuel pipeline, temporarily suspended all operations due to a ransomware attack on Friday.
Its four mainlines remain offline. Colonial said it’s developing a restart plan, but provided no timetable as to when full service will be restored.
“We are 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,” Colonial said in a statement.
The federal government is working to avoid supply disruptions after the company suspended operations, U.S. Commerce Secretary Gina Raimondo said Sunday morning.
“This is what businesses now have to worry about,” Raimondo said during an interview on CBS’ “Face the Nation.” “Unfortunately, these sorts of attacks are becoming more frequent. They’re here to stay.”
President Joe Biden has been briefed on the ransomware attack and the F.B.I. said it’s working closely with Colonial Pipeline and government partners to address the situation.
The Department of Energy is leading the federal response, according to Colonial. The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency is coordinating with the company.
Colonial said it learned Friday that it “was the victim of a cybersecurity attack” and has since shut down 5,500 miles of pipeline that carry nearly half of the fuel supplies on the East Coast, raising fears of spot shortages of gasoline, diesel and jet fuel.
The pipeline is the largest refined products pipeline in the nation, according to Colonial.
“It’s an all hands on decks effort right now,” Raimondo said. “We’re working closely with the company, state and local officials to make sure that they get back up to normal operations as quickly as possible and there aren’t disruptions to supply.”
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The company connects refineries on the Gulf Coast to more than 50 million people in the southern and eastern U.S., according to its website.
The ultimate impact of the attack on fuel prices is unclear since there’s no timeline for Colonial to resume operations, according to Bernadette Johnson, senior vice president of power and renewables at Enverus. Johnson predicted a short-term spike in refined product prices given a short-term outage.
“Refined product storage in both the USGC and Northeast can mitigate the impact of a short term event,” Johnson said Saturday.
But If the shutdown persists, the country could see shortages of fuel develop rapidly, according to John Kilduff, a partner at Again Capital in New York. Kilduff predicted that gas prices will skyrocket on the open of futures trading Sunday evening if the company’s operations don’t resume by then.
Johnson agreed: “If this outage were to persist for a significant amount of time, there would be product shortfalls in the Northeast and a glut of product in the USGC, which would impact prices across the country,” she said.
Jay Hatfield, founder and CEO of Infrastructure Capital Management in New York, said a temporary outage will likely drive already rising national retail gas prices over $3 per gallon for the first time since 2014.
Gas futures gained 0.6% to settle at $2.1269 a gallon and diesel futures rose 1.1% to settle at $2.0106 a gallon on the New York Mercantile Exchange on Friday.
— CNBC’s Pippa Stevens contributed to this report
Read More: Colonial remains mostly closed, working to restore service