Growing domestic production of oil and gas has led to reduced refining capacity in the Northeast, increasing the reliance on fuel sent from Texas.
The operator of a vital fuel pipeline stretching from Texas to New Jersey, shut down for days after a ransomware attack, said Monday that it hoped to restore most operations by the end of the week. Federal investigators said the attackers aimed at poorly protected corporate data rather than directly taking control of the pipeline, which carries nearly one-half of the motor and aviation fuels consumed in the Northeast and much of the South. The operator, Colonial Pipeline, stopped shipments apparently as a precaution to prevent the hackers from doing anything further, like turning off or damaging the system itself in the event they had stolen highly sensitive information from corporate computers. Colonial said it was reviving service of segments of the pipeline “in a stepwise fashion” in consultation with the Energy Department. It said the goal of its plan was “substantially restoring operational service by the end of the week.” The company cautioned, however, that “this situation remains fluid and continues to evolve.” The attack, which the Federal Bureau of Investigation said was carried out by 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 last decade and a half, leading the Northeast to rely on an aging pipeline system to bring in fuel rather than refining imported fuel locally. Since the pipeline shutdown, there have been no long lines at gasoline stations, and because many traders expected the interruption to be brief, the market reaction was muted. Nationwide, the price of regular gasoline climbed by only half a cent to $2.97 on Monday from Sunday, even though the company could not set a timetable for restarting the pipeline. New York State prices remained stable at $3 a gallon, according to the AAA motor club. “Potentially it will be inconvenient,” said Ed Hirs, an energy economist at the University of Houston.
