Colonial Pipeline, the largest fuel pipeline management company in the United States, has shut down its entire network after a cyberattack that industry sources said was caused by a viral ransom payment program.
The shutdown sparked fears of a rise in gasoline prices before demand reached its peak during the summer season if it continued, and highlighted the vulnerability of the US energy infrastructure to hackers.The Colonial network transports fuel from US refineries on the Gulf Coast to the densely populated eastern and southern United States, and the company transports 2.5 million barrels per day of gasoline, diesel, jet fuel and other refined products via pipelines spanning 8,850 kilometers and transports 45% of the East Coast fuel supply.
“The company closed the systems to contain the threat after it learned of the attack the day before Friday,” Colonial said in a statement, noting that this measure temporarily halted operations and affected some of its IT systems.
Although the US government investigation is still in its early stages, a former official and two industry sources said, “It is likely that hackers are a group of highly professional cybercriminals.”
The former government official said, “Investigators are looking into whether a group that the cybersecurity research community calls (Darkside) is responsible for this breach.”
Colonial said on Saturday that “the malware used in the attack is programs aimed at obtaining ransom”, and ransomware is a type of malicious program designed to shut down systems by encrypting data and requiring payment in order to resume access to systems.
The malware has become popular over the past five years, and is often spread by groups of cybercriminals.
Colonel stated that she contacted a third-party cybersecurity company to conduct an investigation and contacted law enforcement and other federal agencies, without giving further details or explaining how long the pipelines will continue to be closed.
The company previously shut down its gasoline and distillery production lines during Hurricane Harvey that swept the Gulf Coast in 2017, and this contributed to a lack of supplies and high gasoline prices in the United States after the hurricane forced many refineries in the Gulf to close.
Refinitiv Icon data showed that gasoline prices rose to their highest levels on the east coast since 2012 during Hurricane Harvey and have not since increased, while diesel prices rose to their highest level in more than two years.
In turn, the US Energy Department said yesterday that it is monitoring potential impacts on the country’s energy supply after the Colonial grid shutdown.
“The US Department of Energy is coordinating with Colonial Pipeline, the energy industry, states and interagency partners to raise awareness of the situation and support efforts to counter this incident,” a ministry spokesman said.
“The Ministry of Energy is also working closely with the energy sector coordination councils, energy information exchange and analysis centers, and is monitoring any potential impacts on energy supplies,” he added.