On Friday, the Colonial pipeline had abruptly put a halt on its operations that covered its 5,500-mile pipeline network. The reason for this sudden pause was attributed to a cyber-attack, executed by a group of professional hackers – Darkside, as confirmed by the FBI.
According to a Reuters report, Darkside hacked the network and downloaded data worth 100 gigs. The hackers also demanded a heavy ransom payment for the control to be given back to the Pipeline Network.
As a counter-response, the Colonial pipeline temporarily shut the entire system as there was a significant risk of hackers obtaining data and destroying the system. The data that was allegedly stolen by the Darkside was obtained offline, insinuating that the hackers may not be able to access it all.
Although not much is known about the hackers, their website suggests a story far different from the supposed. “Our goal is to make money and not creating problems for society,” stated Darkside on its website. To catch these “political” opportunists, Colonial is currently working with Fire Eye.
Until the identities of the hackers are revealed, the Colonial pipeline is in the process of restoring operations “quickly and safely.” They also specified how it is a work in progress, considering it requires a full-blown restoration of the massive system, which ultimately takes time.
At present, a few of Colonial’s pipelines are working, being returned online in a “stepwise fashion.” This has proved to be a source of hope for customers about the system returning to normal and getting back to delivering approximately 2.5 million barrels of jet fuel, amongst other petroleum products.
However, if operations don’t return to normal soon, there could be a myriad of disruptions for the entire region as a whole. The Colonial pipeline plays an instrumental role in refining about 800,000 barrels each day, and if things don’t assume normalcy soon, problems will soon start brewing.
Jason Gabelman at Cowen has suggested how the inventory storage of oil will aid in managing any disruptions that are to occur in the short term. East Coast plants will continue to push their inventories into the market as additional fuel is brought in through trucks.
President Biden has also made several efforts to help in this regard. His administration has removed rules that put a cap on the number of working hours of fuel truck drivers each day. Despite his planned move, the trucking mostly occurs on a small scale and deliveries from ships are fulfilled via supplies already in the water.
Consequently, Coven anticipates that inventories in the East Coast areas will hit 5-year lows, whereas those in the Gulf Coast and Midwest regions are likely to hit new 5-year highs. The only way to balance it off would be to export oil from tankers in Texas as new shipments to New York make their way from European plants in the next few weeks.
With support from Biden’s government and the Colonial’s course of action, the Colonial Pipeline issue will be resolved sooner or later. However, these outages would be less threatening if the system had more “potential redundancies” built-in, said Colin Grabow from the Cato Institute.
