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A police officer stands guard inside the gate to the Colonial Pipeline Co. Pelham junction and tank farm in Pelham, Alabama, in 2016. Photo: Luke Sharrett/Bloomberg via Getty Images

A major U.S. fuel pipeline running from Texas to New York has been taken offline by its operator because of a ransomware attack, Colonial Pipeline said Saturday.

Why it matters: It's a significant breach of critical infrastructure and comes on the heels of multiple other major cyberattacks on both U.S. companies and the federal government.

Colonial Pipeline, which carries 45% of the East Coast’s fuel supplies, shut down 5,500 miles of its pipeline in response to the attack, according to the New York Times.

  • The pipeline transports around 2.5 million barrels of refined gasoline, diesel fuel or jet fuel every day, supplying harbors and airports on the East Coast.

What they're saying: "On May 7, the Colonial Pipeline Company learned it was the victim of a cybersecurity attack. We have since determined that this incident involves ransomware," the company said in a statement.

  • It did not say what was demanded or by whom.
  • "In response, we proactively took certain systems offline to contain the threat, which has temporarily halted all pipeline operations, and affected some of our IT systems," Colonial Pipeline added.
  • "Upon learning of the issue, a leading, third-party cybersecurity firm was engaged, and they have launched an investigation into the nature and scope of this incident, which is ongoing."
  • "We have contacted law enforcement and other federal agencies."

The Department of Energy said in a statement it is coordinating with Colonial Pipeline, the energy industry, states, and interagency partners in responding to the incident.

  • "DOE is also working closely with the energy sector coordinating councils and the energy information sharing and analysis centers, and is monitoring any potential impacts to energy supply," the department said.

Eric Goldstein, executive assistant director of the Cybersecurity and Infrastructure Security Agency's division on cybersecurity, said in a statement, "This underscores the threat that ransomware poses to organizations regardless of size or sector."

  • "We encourage every organization to take action to strengthen their cybersecurity posture to reduce their exposure to these types of threats.”

Patrick De Haan, head of petroleum analysis at GasBuddy, said in a statement to Axios, "[There] should not be a price impact if it’s restarted in the next couple days, after that it could turn into one where prices go up. But by how much depends on if consumers panic and start buying gasoline."

Editor's note: This story has been updated with additional information from Colonial Pipeline and U.S. officials.

Go deeper

Treasury sanctions cryptocurrency exchange over ransomware transactions

Treasury Secretary Janet Yellen during a congressional hearing in June 2021. Photo: Greg Nash/The Hill/Bloomberg via Getty Images

The Department of the Treasury announced Tuesday it will sanction cryptocurrency exchange SUEX for allegedly facilitating financial transactions for multiple ransomware actors.

Why it matters: The sanctions, the first against a cryptocurrency exchange platform, are a part of the Biden administration's crackdown on ransomware in response to several high-profile cyberattacks this year.

Biden pledges to double U.S. climate funding to developing nations

U.S. President Joe Biden addresses the 76th Session of the U.N. General Assembly on September 21, 2021. (Eduardo Munoz-Pool/Getty Images)

Staring down a "borderless climate crisis," President Biden told the UN General Assembly on Tuesday that the U.S. will double public financial assistance to developing countries, including money to help them adapt to present-day climate impacts.

Why it matters: The failure of industrialized nations to fulfill a 2009 pledge to devote $100 billion annually to developing countries is a major impediment to a successful UN Climate Summit in Glasgow, which starts next month.

Dan Primack, author of Pro Rata
2 hours ago - Economy & Business

IPO market holds firm amid stock market tumult

Illustration: Aïda Amer/Axios

The IPO market is doing its best Alfred E. Neuman impression so far this week, refusing to entertain everyone else's worries.

The big picture: Both the Dow and S&P 500 fell nearly 2% yesterday, as investors tried to measure the fallout of Chinese construction giant Evergrande defaulting on its $300 billion in liabilities.