September 22, 2023

UPDATE, 5:15 p.m. ET: Energy Secretary Jennifer Granholm just announced that the Colonial Pipeline is resuming gas pipeline operations.

WASHINGTON – President Joe Biden said Wednesday he was expecting good news “in the next 24 hours” of the ongoing cyber attack on the Colonial Pipeline that has been hampering fuel deliveries to the east coast in recent days.

“We have been in very close contact with Colonial Pipeline, the area you are talking about – one of the reasons gasoline prices are rising,” Biden said at an event on Wednesday afternoon.

“I think you will be hearing good news in the next 24 hours. And I think we will get this under control.”

The remarks came as Americans in the southeast and mid-Atlantic faced pump fuel shortages from late Monday, which showed little sign of deterioration until Wednesday afternoon. Panic buying in some states exacerbated supply chain problems.

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“I’ve meanwhile made it easier for us to lift some of the restrictions on the transportation of fuel, as well as access to the US military that provides fuel, and vehicles to get it there, places where it’s badly needed becomes.” “said Biden.

The Biden administration’s recent moves, according to the White House, represent a large-scale mobilization of the government to respond to the crisis that began when Colonial informed federal authorities on Friday that it had been the target of a ransomware attack .

The government said Tuesday it would initiate a “comprehensive federal response” to restore and secure US energy supply chains.

The attack forced the company to shut down approximately 5,500 miles of pipeline, cutting off nearly half of the fuel supply on the country’s east coast.

The attack on Colonial Pipeline was traced back to a hacking group called DarkSide, an organized group of hackers set up on the ransomware as a service business model. This means that the DarkSide hackers develop, market and sell ransomware hacking tools to other criminals who then carry out attacks.

DarkSide is believed to operate out of Russia, but the White House has said there is no evidence to date that the attack was state sponsored or directed by the Kremlin.

The question that remains open is how Colonial Pipeline is solving the attack, including whether Colonial paid the ransom that hackers typically demand in these scenarios.

White House press secretary Jen Psaki on Wednesday refused to answer specific questions about the collaboration between Colonial Pipeline and the Biden administration, but said the company and relevant authorities are working closely together.

The Department of Energy leads the federal government’s response in coordination with the FBI, the Department of Homeland Security, and the Department of Defense. A FireEye Mandiant spokeswoman confirmed to CNBC that the US cybersecurity company is working with Colonial Pipeline following the incident.

The national average for a gallon of unleaded gasoline rose to $ 2.985 on Tuesday, up 6 cents over the past week, according to the AAA.

However, regionally, the price increases were sharper, noted AAA. In South Carolina, for example, gasoline prices have increased more than 6 cents since Monday and 13 cents last week. In Georgia, drivers paid $ 2.87 a gallon on Tuesday, an increase of more than 10 cents in just one day and 17 cents a week.

An increase of 3 cents per gallon would bring the average US sales price to its highest level since November 2014.

“We are currently seeing full-fledged panic in a few places that I suspected we could see,” said Tom Kloza, head of global energy analysis at OPIS. “There aren’t enough drivers to get trucks from terminals filled with gasoline to gas stations. We see a lot of gas stations running out. Georgia appears to be Ground Zero.”

Kloza said he expected gasoline prices to rise, but not to spike. The bigger problem is that gasoline will be scarce in the area as it will take some time to replace once the pipeline is turned on and the outages could continue.

Gasoline in the pipeline travels at only 5 miles per hour.

CNBC’s Eamon Javers, Amanda Macias and Patti Domm contributed to the coverage.

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