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UPDATE 3-Hackers say seeking cash as top US fuel pipeline down for 4th day

05/10/2021 07:48
UPDATE 3-Hackers say seeking cash as top US fuel pipeline down for 4th day

Recasts, adds fresh FBI and Colonial Pipeline comments, commentary and background

By Stephanie Kelly and Devika Krishna Kumar

- A group of cybercriminals allegedly responsible for the ransomware attack that shut the largest fuel pipeline in the United States said on Monday it only wants to make money, not disrupt society, as Washington scrambled to help restore the network.

Colonial Pipeline COLPI.UL in its fourth day of shutdown, said it has a phased restart program and hopes to "substantially" restore service by the end of the week. nL1N2MX1MX The attack on Colonial, source of nearly half of the fuel on the U.S. East Coast, is one of the most disruptive digital ransom schemes reported.

The hack triggered worries of retail gasoline spikes and laid bare the vulnerabilities of U.S. energy infrastructure to hackers.

The FBI on Monday pinned the blame on the cyber group DarkSide. nL1N2MX1HE A statement in the group's name said "our goal is to make money, and not creating problems for society." Its statement did not mention Colonial Pipeline by name. nL1N2MX12A

DarkSide could be based in Russia or Eastern Europe, according to experts, because its ransomware is rigged to avoid encrypting computers set to use Russian, Ukrainian, Kazakh, or other language keyboards associated with the former Soviet republics.

Ransomware is a type of malware designed to lock down systems by encrypting data and demanding payment to regain access. It is unknown how much money the hackers are seeking, and Colonial has not commented on whether it would pay. nL1N2MW0F3

Since the incident, U.S. lawmakers have urged stronger protections for critical energy infrastructure.

The White House also has made restarting the fuel network a top priority and has organized a federal task force to assess the impact and avoid more severe disruptions.

PUMP PRICE FEARS

On Sunday, Colonial said it restarted some smaller lines between fuel terminals and customer delivery points but its main lines between Houston and the U.S. Northeast remained shut. It did not provide a timeline for a full restart of the 5,500 mile (8,850 km) system.

"While this situation remains fluid and continues to evolve, the Colonial operations team is executing a plan that involves an incremental process that will facilitate a return to service in a phased approach," it said.

Fuel demand in the southeastern United States has already picked up. Gas stations in states such as Georgia, North Carolina and Tennessee were seeing some abnormal buying, fed by demand fears, said Patrick De Haan, head of petroleum analysis at GasBuddy.

That region would likely be the first to see pump price increases because it is the most dependent on the line and has fewer alternative supply sources than states further north. nL1N2MW0K6

The American Automobile Association said the national gasoline price average climbed 6 cents on the week to $2.96 a gallon, the highest since May 2018.L1N2MX1NL

The Department of Transportation announced emergency measures on Sunday to facilitate deliveries, lifting driver restrictions on fuel haulers in 17 states affected by the shutdown. It could take additional measures if the outage continues. nW1N2KZ01E

U.S. fuel traders have provisionally booked at least six tankers to ship gasoline from Europe to U.S. destinations following the attack. [nL1N2MX0L4]

Colonial's pipeline system moves over 2.5 million barrels per day (bpd) of gasoline, diesel and jet fuel, supplying motorists and major airports. nL4N2MW0C8

Hartsfield-Jackson International in Atlanta, the busiest airport in the country, expects the outage to be resolved before any impact on flights, a spokesman said.

An alternative, smaller conduit that serves the same region has already filled. Kinder Morgan Inc's KMI.N 720,000-bpd fuel pipeline had been working with customers to take on additional volumes since Friday and reached full capacity for May on Sunday, a spokeswoman for the company said.

If the disruption stretches on, fuel suppliers would need to use trucks and rail to transport fuel to compensate.

Marathon Petroleum MPC.N, the largest U.S. refiner, said it can meet its supply commitments for now but is working to find alternative ways to ship motor fuels to the eastern United States. nL1N2MX0TX


(Reporting by Devika Krishna Kumar and Stephanie Kelly in New York; Additional reporting by Raphael Satter and Steve Holland in Washington, D.C.; Editing Bernadette Baum and Grant McCool)

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