May 13, 2021 - Energy & Environment

Colonial pipeline hack: Key takeaways from Biden's first energy crisis

Illustration of the White House in a puddle of oil.

Illustration: Shoshana Gordon/Axios

Restoration of the Colonial Pipeline, the huge East Coast gasoline artery, is the beginning of the end of a crisis that prompted a White House logistical and political scramble.

Catch up fast: Late Wednesday afternoon, Colonial began a restart of the 5,500-mile line that shut down nearly a week ago after a ransomware attack.

  • But it will take days before deliveries return to normal on the largest U.S. refined fuels pipeline that transports over 100 million gallons daily.

The big picture: Here are a few takeaways from the attack that snarled the East Coast fuel system, in part due to a rush on gas stations.

1. The White House quickly sensed security and political peril.

  • Axios' Alayna Treene reports that top officials — including counselor Steve Ricchetti and National Security Council chief of staff Yohannes Abraham — visited Camp David last weekend to brief President Biden.
  • Alayna and Axios' Jonathan Swan report the White House is worried about political fallout amid images of lines outside gas stations before Memorial Day.
  • The White House has been looking to show that it's on top of the situation, with Energy Secretary Jennifer Granholm and other Cabinet officials joining public briefings.

2. It's a stark reminder of the cyber risks to energy.

  • It's a stunning real-world example of how many types of infrastructure remain vulnerable to hackers.
  • The Atlantic Council's Cynthia Quarterman, a top Transportation Department official in the Obama era, said it "exposes the soft underbelly of the nation’s critical energy infrastructure."
  • Quarterman, in comments on the council's site, notes that if a company like Colonial can be breached, smaller companies are even more vulnerable to attack.

3. New policy is already flowing from the pipeline shutdown.

  • On Capitol Hill, lawmakers are calling for new measures. Top House Energy and Commerce Committee lawmakers floated bipartisan bills yesterday. The pending infrastructure talks could also emerge as a vehicle.
  • Separately, the White House yesterday issued a wide-ranging executive order to bolster cyber defenses. It was in the works long before the Colonial hack, but officials cited the pipeline in touting the need for it.
  • CNBC has more.

4. The scale of the pipeline disruption was immense.

  • It notes that the 17-state region the pipeline helps to serve, on its own, "is the largest net importer of refined products in the world, ahead of all of Africa and the Southern Asia Pacific (Australia, Indonesia, Singapore and New Zealand combined)."
Data: AAA; Chart: Will Chase/Axios

Here's where things stand with the Colonial Pipeline:

  • The shutdown and run on fuel has pushed the nationwide average gasoline price to its highest level since the fall of 2014. Per AAA, the average today is $3.03 per gallon for regular.
  • The resumption of service that began late yesterday won't immediately end the problems (fuel moves slowly). Data crowdsourced from the GasBuddy app shows significant numbers of gas stations in eastern states remain without fuel.
  • The latest Biden administration effort came last night when officials announced a "targeted" waiver of the Jones Act to enable fuel movement among U.S. ports by a non-U.S. flagged vessel. The company that received the waiver was not named.

What they're saying: "Colonial Pipeline reports this morning that the restart of the pipeline went well overnight. This should mean things will return to normal by the end of the weekend," Granholm tweeted this morning.

Go deeper: Colonial Pipeline hack exposes ransomware “pandemic”

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