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Will gas prices spike after pipeline cyberattack? What we know now

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As the shutdown of a major fuel pipeline entered into its sixth day, efforts are under way to stave off potential fuel shortages, though no widespread disruptions were evident.

The Colonial Pipeline, which delivers about 45% of the fuel consumed on the East Coast, was hit by a cyberattack on Friday. The attack raised concerns, once again, about the vulnerability of the nation’s critical infrastructure. Ransomware attacks are typically carried out by criminal hackers who scramble data to paralyze their target’s networks. Large payments are demanded to decrypt it.

There were reports of gas stations in the Southeast running out of gasoline, according to Gasbuddy.com, which tracks outages and prices. In Virginia, 7.5% of the state’s 3,880 gas stations reported running out of fuel. In North Carolina, 5.4% of 5,372 stations were out, the company said.

By Tuesday, more than 1,000 gas stations had run out of gasoline, shortages primarily driven by panic buying.

In this Sept. 8, 2008 file photo traffic on I-95 passes oil storage tanks owned by the Colonial Pipeline Company in Linden, N.J. A major pipeline that transports fuels along the East Coast says it had to stop operations because it was the victim of a cyberattack.

“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, a veteran analyst with S&P’s Oil Price Information Service. “It becomes a self-fulfilling prophecy.”

The states most dependent on the pipeline include Alabama, Georgia, Tennessee and the Carolinas, he said.

Secretary of Energy Jennifer Granholm told reporters Tuesday that a large part of the pipeline resumed operations manually late Monday, and Colonial will be able restart most of its operations by the end of the week. Motorists may still feel a crunch because it takes a few days to ramp up operations, she said.

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Source: GANNETT Syndication Service