Transportation is an essential part of societies around the globe, and many people rely on public transportation or a vehicle of their own to get to where they need to go. Recently, many in the United States were caught up in a gas crisis as prices at gas stations skyrocketed. In addition, a gas shortage occurred as stations ran out due to a cybersecurity attack against Colonial Pipeline Company. The digital attack caused one of the largest fuel pipelines to shut down. The overall situation sparked fear that gas prices would further spike or continue to rise following resolving the matter.
The private and family-owned oil and gas organization, Ferrari Energy, goes into more detail surrounding the recent cyber-attack on Colonial Pipeline, explains what is causing sudden increases in 2021 gas prices, and discusses whether or not the blame can be put on the cyberattack.
The Colonial Pipeline Company Cyber Attack
On May 7 of this year, an employee of the Colonial Pipeline Company stumbled upon a ransom note on a control-room computer. The ransom note was from hackers who had severely breached the company’s system through a cyber-attack involving ransomware asking for a ransom payment of four point four million dollars. The gang of hackers was later identified as a group called the DarkSide. As the chaotic day came to an end, the fuel company faced the only option to solve the issue, which was to pay the ransom.
The decision to pay the ransom was made by the CEO of Colonial Pipeline Company, Joseph Blount, as uncertainty lingered around when the pipeline would be brought back. The vital energy infrastructure provides forty-five percent of the fuel supplied to the United States East Coast. The main pipeline transports diesel fuel and gasoline there through the five thousand five-hundred-mile Colonial Pipeline system operations. The company’s system takes fuel from the Gulf Coast refineries to the New York metro area, so the abrupt standstill of pipeline operations sparked a gas shortage for many on the East Coast. One day after the cyber-attack took place, analysts predicted that the pipeline’s halt would not have major repercussions on oil and gas markets as long as the pipeline did not continue to stay down over multiple days. However, Colonial Pipeline was unable to resume the pipeline’s functionality until the afternoon of May 12.
Will Gas Prices Continue to Rise?
The cyberattack on the Colonial Pipeline Company’s pipeline shot gas prices up to almost three dollars and even a little over that amount in some areas. The American Automobile Association (AAA) stated that the national average for gas prices had not reached two dollars and ninety-nine cents or more since November of 2014. In addition to the recent cyber-attack, another contributing factor to the rise in gas prices is the high cost of crude oil and ethanol.