State of Emergency: Rob Handfield Comments on Gas Shortage in North Carolina

Governor Roy Cooper issued a state of emergency on May 10 in response to the recent cyberattack on Colonial Pipeline causing a shutdown. Around North Carolina, many citizens are lining up at local gas pumps to fill up in preparation for a surge and shortage in gas.

Rob Handfield, professor of operations and supply chain management, breaks down how the gas pumps will replenish and how the cybersecurity breach most likely happened from engineers’ work from home stations.

Q&A with Rob Handfield

1. What exactly happened to cause the gas shortage? 

Several cybersecurity experts said the incident represents the biggest known cyberattack on U.S. energy infrastructure. On Monday, Biden administration officials sought to assuage fears that the attack could lead to price spikes, fuel shortages or panicked buying up and down the East Coast, and Colonial announced that it had restarted some service.

2. When will the gas pumps replenish? When will the issue work itself out?

Fuel runs from Texas to several terminals in North Carolina including Charlotte, Selma, Raleigh, and continues all the way up through Virginia to New York and New Jersey. It is the only pipeline that serves the local Research Triangle Park area. It was shut down by the hackers after a ransomware event occurred.

The company is involved with the FBI and the hackers likely attacked the desktops of engineers working from home and were able to download a lot of data, which they are holding “hostage” until they pay a fee.

3. What should people do? Many are rushing to the pumps, is that a good idea or does that cause more of a problem?

The terminals have run out of gas, which is how the gas stations are replenished by truck. As such, the pumps cannot be replenished until they turn the pipeline back on in Texas. And then it will flow back up to the terminals, and then may take a couple of days for trucks to distribute it to the stations.

Each station has an underground tank that feeds the pumps, and many of those in the Triangle are now near empty. Part of this is being driven by panicking consumers who are lining up to fill up their cars.

4. How is supply and demand affected?

People who need to take a trip may need to fill up soon. Otherwise, just try to minimize travel over the next week. Airlines also depend on fuel and there may be some flight delays or cancellations. Once the hack is addressed there is plenty of fuel in Texas.

They may need to ship some of it up by truck, or even from the ports, but this will likely drive an increase in the price of fuel locally as shipping by truck is much more expensive than pipelines, which are the most efficient way of transporting fuel.

This article was originally published on Poole Thought Leadership here.