Fuel supply concerns reasonable but not necessary in wake of pipeline cyber attack, experts and truckers say
Experts say that a critical fuel shortage is unlikely despite the recent cyber attack on a crucial pipeline that supplies the east coast, and the truckers transporting the fuel that remains agree.
On Friday, May 7th, a ransomware attack on the Colonial Pipeline by the hacker group DarkSide put fuel in somewhat short supply. By Tuesday, authorities were reporting that 7.6% of gas stations in Virginia and 4.8% of gas stations in North Carolina had run dry, with additional shortages reported in Florida, South Carolina, Tennessee, and Alabama.
Now, fuel industry experts and truckers alike are acknowledging the temporary shortage, but say that critical shortages are highly unlikely.
“The short answer is no (we’re not in danger of running out of fuel), but the short-term shortage is driving prices up,” said John Saldanha, Sears Chair in Global Supply Chain Management and Associate Professor, WVU Chambers College of Business and Economics.
“The reason is that only the transportation infrastructure has been disrupted and presumably not the storage operations. Typically, firms have several days and even weeks’ worth of inventory to supply their markets. Hence, once the pipeline is opened up again and the oil starts flowing, the demand will be met.”
As of Tuesday, pipeline officials said they expected to resume normal operations by the end of the week.
“Recall, that while serving a substantial portion (45%) of East Coast fuel demand, there are still other suppliers there and the federal government has eased fuel truck driver regulations allowing them to drive longer hours to make road deliveries of fuel to areas facing critical shortages. Even beyond the other 55% of supply from alternative sources, there are other critical reserves not including the strategic petroleum reserve that can be tapped to fill a long-term reduction in fuel supply. A critical fuel shortage is only likely if the source of the fuel i.e. a major refinery or region of crude oil e.g. Saudi Arabia or Middle East, gets disrupted. This is what happened with the OPEC embargo against the U.S. that caused the major oil shortages in 1973-74,” Saldanha continued.
“The key takeaway is this is just another in a long line of supply chain disruptions at critical supply chain nodes or bottlenecks, including several seaport disruptions starting with the 2002 labor lockout at the Southern California ports that prompted President George W. Bush to invoke the Taft-Hartley Act to avoid major damage to the U.S. economy, and continuing to this year with the COVID-19 effects that delayed shipping in the same ports leading to shortages in many raw materials and consumer product goods.”
While Saldanha says citizens don’t need to be worried about a true fuel crisis this time, the US should consider diversifying its fuel supply portfolio and formulating a more substantial plan to prevent and handle future attacks of this nature.
“At the firm level, supply chain research has pointed to diversifying the supply portfolio or not ‘putting all your eggs in one basket,’ and developing contingencies such as ‘just-in-case’ inventories and expedited transportation strategies to bypass disrupted areas of the supply chains. Firms also maintain a ‘command and control center’ to manage supply chain disruptions and use ‘wargames’-like simulations to practice responses to supply chain disruptions,” he explained to 12 WBOY News.
“At the macro-level, industrial organizations (American Association of Port Authorities) and the federal government must work together to a) identify vulnerabilities in public infrastructure, b) ensure public infrastructure is protected from attacks by malicious agents, and c) provide contingencies to protect the public from the fallout of such attacks.”
As for the drivers hauling what fuel is available, they say that the refineries and tanker drivers on the gulf coast are staying busy and doing their best to keep up with increased demand.
“I’m pulling like 12-15 hour days, waiting at the refineries for an average of two to three hours,” said trucker Rashid Abdul-Salaam to WLOX News.
“Everything is pretty much backed up, when we can get it, we can get it. Like I said earlier, we have customers that actually wait on the side of the interstate at the gas stations and once they see the tanker truck coming they kind of get on our back door and follow us into the gas station.”
The Chevron Pascagoula Refinery, the main supplier of fuel on the Gulf Coast, has reported that they are unaffected by the pipeline outage, and doing their best to keep up with the demand brought on by the downed pipeline supplying the east coast and panic buying by concerned citizens.