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How the Colonial Pipeline Became a Vital Artery for Fuel
Reliance on the pipeline has grown as rising domestic production of oil and gas has led to reduced refining capacity in the Northeast.
The Colonial Pipeline
The pipeline can carry roughly three million barrels of fuel a day over 5,500 miles from Texas to New York.
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[Latest news: Colonial Pipeline restarted its operations.]
HOUSTON — The ransomware attack that forced the shutdown of a pipeline delivering fuel to the Northeastern United States highlighted the vulnerability of the American energy system. It led governors of several states to declare emergencies. And it caused panic among motorists as thousands of gas stations have run out of supply.
The operator of the pipeline, which was taken offline on Friday, has begun restoring the flow of fuel. But for each day that the shutdown has dragged on, a sense of crisis has grown, testing the country’s aging infrastructure and a new White House administration combating growing cyberthreats.
What’s the latest?
Colonial Pipeline, the company that runs the vital artery, said on Wednesday that it had restarted operations but that it could take several days for energy to flow normally. “Colonial will move as much gasoline, diesel, and jet fuel as is safely possible,” the company said in a statement.
In the meantime, drivers in Tennessee, Georgia and elsewhere have been panic-buying gasoline, exacerbating shortages with their fears. The price of gas has shot up in several states. Motorists have been yelling at one another to move out of the way as they hog pumps to fill up multiple gas cans to hoard.
The near hysteria in a few communities has not been seen in years, as some people on social media have begun comparing President Biden to President Jimmy Carter, who was president when gas lines rattled the country after the Iranian revolution and other Middle East troubles.
Experts say the reaction this time, however, is out of proportion with the actual risk.
What is Colonial Pipeline, and why is the Atlantic Coast so dependent on it?
The Colonial Pipeline, based in Alpharetta, Ga., is one of the largest in the United States. It can carry roughly three million barrels of fuel a day over 5,500 miles from Houston to New York. It serves most of the Southern states, and branches from the Atlantic Coast to Tennessee.
Some of the biggest oil companies, including Phillips Petroleum, Sinclair Pipeline and Continental Oil, joined to begin construction of the pipeline in 1961. It was a time of rapid growth in highway driving and long-distance air travel. Today Colonial Pipeline is owned by Royal Dutch Shell, Koch Industries and several foreign and domestic investment firms.
It is particularly vital to the functioning of many Eastern U.S. airports, which typically hold inventories sufficient for only three to five days of operations.
There are many reasons it has become so important, including regulatory restrictions on pipeline construction that go back nearly a century. There are also restrictions on road transport of fuels.
But the main reason comes closer to home. Over the last two decades, at least six refineries have gone out of business in New Jersey, Pennsylvania and Virginia, reducing the amount of crude oil processed into fuels in the region by more than half, from 1,549,000 to 715,000 barrels weekly.
“Those refineries just couldn’t make money,” said Tom Kloza, global head of energy analysis at Oil Price Information Service.
The reason for their decline is the “energy independence” that has been a White House goal since the Nixon administration. As shale exploration and production boomed beginning around 2005, refineries on the Gulf Coast had easy access to natural gas and oil produced in Texas.
How serious is the threat?
The government said the attack was carried out by an organized crime group called DarkSide. Attacks on critical infrastructure have been a major concern for a decade, but they have accelerated in recent months, raising concerns that basic services like heat, light and transportation can be threatened and stopped in an instant by shadowy criminal groups that sometimes have tacit or active support from foreign governments.
The current pipeline problem is serious because it has implications for national security, even though the Northeast fuel supply system is flexible and resilient.
Many hurricanes have damaged pipelines and refineries on the Gulf Coast in the past, and the East Coast was able to manage. The federal government stores millions of gallons of crude oil and refined products for emergencies. Refineries can import oil from Europe, Canada and South America, although trans-Atlantic cargo can take as much as two weeks to arrive.
When Hurricane Harvey hit Texas in 2017, damaging refineries, Colonial Pipeline shipments to the Northeast were suspended for nearly two weeks. Gasoline prices at New York Harbor quickly climbed more than 25 percent, and the added costs were passed on to motorists. Prices took over a month to return to previous levels.
Hurricanes come and go. But this crisis is different. Federal investigators said the attackers were aimed at poorly protected corporate data.
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.
“The unfortunate truth is that infrastructure today is so vulnerable that just about anyone who wants to get in can get in,” said Dan Schiappa, chief product officer of Sophos, a British security software and hardware company. “Infrastructure is an easy — and lucrative — target for attackers.”
David E. Sanger contributed reporting.
Clifford Krauss is a national energy business correspondent based in Houston. He joined The Times in 1990 and has been the bureau chief in Buenos Aires and Toronto. He is the author of “Inside Central America: Its People, Politics, and History.” More about Clifford Krauss
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