Tom Kloza, global head of energy analysis at OPIS, is forecasting “nominally higher” prices at the pump

May 10. By Dave Yochum. Colonial Pipeline’s gasoline recovery and environmental remediation efforts in Huntersville are not impacted by the cybersecurity attack on the Georgia-based company.

“Because some IT systems are affected, we may be slower to respond to some informational requests, but the most important aspect of our response — which is protecting public safety, restoring the natural environment and recovering free product — is ongoing and remains a 24/7 operation,” the pipeline operator said.

CSO Online, the leading information source for chief security officers and senior executives, is reporting that Colonial Pipeline was the victim of a ransomware attack. Colonial said it is developing a system restart plan while keeping its four main oil lines offline.

Colonial said it would bring its “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.”

Impact

The Colonial Pipeline carries 2.5 million barrels a day, nearly half the East Coast’s supply of diesel, gasoline and jet fuel.

Rules on fuel being transported by road have been relaxed.

Oil and gas expert

Fuel prices at the pump were generally unaffected over the weekend, but oil and gas analyst Tom Kloza told Business Today that could change if the shutdown is prolonged.

Comparing it to the Richter Scale and earthquakes, Kloza, global head of energy analysis at OPIS, said four days into the pipeline shutdown is like a tremor, or a 4.0 on the Richter Scale.

“Day five any beyond is like an earthquake that is 5, 6, 7,8, 9…it can be devastating,” Kloza said, forecasting “nominally higher” prices at the pump.

LOCAL: Charlotte-area suppliers increased prices over the weekend even though the commodity market was not open. “The weekend saw some unusual increases on Saturday afternoon, usually an
off-time for most of the personnel that handle petroleum pricing,” Kloza said.

Air travel up in the air

Most affected if the shutdown continues are airports which only keep a few days of jet fuel on hand.

He said the most stunning aspect of the hack is how successful it was in light of the target being a major piece of American infrastructure.

“Imagine if this had been Duke Energy,” he said.

There is no timeline as to when the major arteries can be restarted. Kloza said Colonial is losing roughly $8 million a day.

From OPIS: “Already, there are worries about hoarding, both from distributors and consumers because of the high-profile nature of the cyberattack on the country’s largest product pipeline system. A sign was spotted at a South Carolina station proclaiming ‘Due to the shutdown of the Colonial Pipeline, we will be limiting gas purchases to 20 gallons. Thanks.'”