More than 1,000 gas stations in the Southeast reported running out of fuel, primarily because of what analysts say is unwarranted panic-buying among drivers, as the shutdown of a major pipeline by a gang of hackers entered its fifth day Tuesday.
Government officials acted swiftly to waive safety and environmental rules to speed the delivery of fuel by truck, ship or rail to motorists and airports, even as they sought to assure the public that there was no cause for alarm.
The Colonial Pipeline, the biggest fuel pipeline in the U.S., delivering about 45% of what is consumed on the East Coast, was hit on Friday with a cyberattack by hackers who lock up computer systems and demand a ransom to release them. The attack raised concerns, once again, about the vulnerability of the nation's critical infrastructure.
A large part of the pipeline resumed operations manually late Monday, and Colonial anticipates restarting most of its operations by the end of the week, U.S. Energy Secretary Jennifer Granholm said.
Motorists may still feel a crunch because it takes a few days to ramp up operations, but she said there is no reason to hoard gasoline.
"We know that we have gasoline; we just have to get it to the right places," Granholm said.
The national average for a gallon of gasoline stood at $2.98 on Tuesday, according to AAA. That's an 8-cent jump on the week, and a penny shy of prices not seen since November 2014. Gasoline prices normally rise at this time of year as the summer driving season approaches.
S&P's Oil Price Information Service put the number of gas stations encountering shortages at more than 1,000.
[Video not showing up above? Click here to watch » https://www.youtube.com/watch?v=TY0eIRkYljo]
"A lot of that is because they're selling three or four times as much gasoline that they normally sell in a given day, because people do panic," said Tom Kloza, an analyst with S&P. "It becomes a self-fulfilling prophecy."
About 5,500 miles of Colonial pipeline moves fuel from Gulf Coast refineries to customers in the Southern and Eastern United States. The company says the pipeline reaches 50 million Americans and several major airports, including Hartsfield-Jackson in Atlanta. The states most dependent on the pipeline include Alabama, Georgia, Tennessee and the Carolinas, Kloza said.
"This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. Areas including Mississippi, Tennessee and the East Coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week," Jeanette McGee, AAA spokeswoman, said in a statement. "These states may see prices increase three to seven cents this week."
In Virginia, 7.7% of the state's nearly 3,900 gas stations reported running out of fuel Tuesday, according to Gasbuddy.com, which tracks supply. In North Carolina, 8.5% of almost 5,400 stations were out, the company said.
Granholm warned gas station owners, "We will have no tolerance for price gouging."
To ease brief shortages, the White House is considering temporarily waiving a law that says ships delivering products between U.S. ports must be built and manned by Americans.
The Transportation Department also is relaxing some workforce requirements and enlisting railroads to deliver fuel inland. The Environmental Protection Agency administrator, Michael Regan, issued an emergency fuel-air-emissions waiver Tuesday to help alleviate fuel shortages.
"We're looking at every option we have across the federal government and all of the federal agencies," Granholm said.
In Georgia, Gov. Brian Kemp suspended state taxes on motor fuels through Saturday. Georgia collects a gasoline tax of 28.7 cents per gallon and a diesel tax of 32.2 cents per gallon.
However, he urged people not to hoard gasoline, saying he expects the situation to be resolved soon.
"You don't need to go out and fill up every 5-gallon can you've got," the governor said.
STATE OF EMERGENCY
Gov. Roy Cooper of North Carolina and Gov. Ralph Northam of Virginia each declared a state of emergency in an effort to suspend some fuel transport rules.
South Carolina's attorney general, Alan Wilson, announced he was ready to administer the state's price-gouging law, making excessive overcharging a criminal offense. "I'm urging everyone to be careful and be patient," Wilson said. "I urge citizens to remain vigilant and notify my office immediately if you believe you have witnessed or are aware of price gouging."
Dave Gussak drove from one station to the next in Tallahassee, Fla., in search of gas, seeing a line nearly a mile long at the pumps outside a Costco. He eventually passed a station with gas on the way to Florida State University where he works.
"This is insane," he said.
Irena Yanava's tank was about half full, but she wasn't about to take chances as she sat in her car at the same Tallahassee gas station.
"I know that I'll be needing it soon, so why not?" she said.
The Colonial Pipeline carries jet fuel as well. American Airlines rerouted two long-haul flights from Charlotte, N.C., because of possible shortages. Passengers flying to Honolulu will have to change planes in Dallas, and those heading to London will stop in Boston to refuel.
Southwest and United flights carried extra fuel on flights to Nashville, Tenn., Baltimore and some other airports in case jet fuel was unavailable at those airports. Normally airlines load only enough fuel for a single flight, because topping off adds to the plane's weight and hurts mileage. Most planes can carry enough fuel for a round trip, but the extra fuel burn costs money.
RANSOMWARE SCOURGE
Government officials haven't advised Colonial on whether it ought to pay the ransom, Anne Neuberger, the deputy national security adviser for cyber and emerging technologies, said at a briefing.
Homeland Security Secretary Alejandro Mayorkas said American organizations have lost more than $350 million this year as a result of ransomware attacks.
"The threat is not imminent," he said. "It is upon us."
Ransomware attacks have become a global scourge, impeding banks, hospitals, universities and municipalities in recent years. But the attackers are increasingly targeting industrial sectors because these firms are more willing to pay up to regain control of their systems, experts say.
About 43% of infrastructure organizations victimized by such attacks submit to ransom demands, more than any other industry, according to the Sophos 2021 "State of Ransomware" report.
Information for this article was contributed by Cathy Bussewitz, Jeff Amy, Bobby Caina Calvan, Aamer Madhani, Michelle Chapman and David Koenig of The Associated Press; by Clifford Krauss and Niraj Chokshi of The New York Times; by Taylor Telford and Will Englund of The Washington Post; and by Joe Carroll, Andres Guerra Luz and Jill R. Shah of Bloomberg News (WPNS).
