‘Panic-buying’ leaving gas stations dry amid Colonial Pipeline shutdown

CHARLOTTE — Many local gas stations are running out of fuel while others are raising prices amid the Colonial Pipeline shutdown.

Channel 9 was out at several gas stations early Wednesday and most of them had cars lined up with drivers waiting to fill their tanks. One driver said he had waited for more than four hours before sunrise to fill up.

North Carolina is under a State of Emergency and analysts say the longer it takes to get the pipeline back online, the deeper the impact will be.

Overnight, the outage tracker on GasBuddy.com showed 16% of North Carolina gas stations were out of fuel, but that 71% of gas stations in Charlotte were without supply.

“When you go beyond five days out to about a week, a week and a half, you start running into actual physical losses,” Wells Fargo Securities Analyst Roger Read said. “After 10 days of an outage, it would then become very challenging.”

For people who use a car for work, like delivery drivers, rolling up to gas stations with covered pump handles is frustrating.

Uber driver Isaac Campbell told Channel 9 he was one of hundreds of drivers who waited a long time on Tuesday for gas at a west Charlotte station. That was after he said he spend much of his day hunting for gas so he could make it home.

“I live in the car, never less than four and normally eight to 12 hours per day,” Campbell said. “I’ve got a gallon in the tank and I live in Mocksville. I don’t know if I’m going to be able to get back to home.”

Campbell eventually was able to fill his tank before that gas station ran out of fuel and did make it home.

Kelsey Souffrant said she supplements her income by working for Postmates and told Channel 9 lines are unnecessarily long because people are panic buying.

“It drives me crazy,” she said. “Like, use your head a little bit. There’s a shortage because you are filling up seven cars.”

The City of Charlotte said it is preparing for “prolonged interruption” of gas reserves. Officials said the city maintains its own fuel reserve and there is enough supply at the moment.

In South Carolina, Gov. Henry McMaster said his office has been in constant contact with the Office of Regulatory Staff about the shutdown and will be ready to take any additional steps that may be necessary.

“Because our state is currently under a state of emergency, transportation waivers and price gouging laws are in effect to facilitate fuel delivery and protect consumers,” McMaster said. “There is no need to rush to top off your gas tanks or hoard gas. The pipeline is expected to resume operations by the end of the week.”

If you need gas, you should prepare for long lines of cars waiting to fill up. Many people across the region said they are nervous about a possible gas shortage so they are filling up. But if you have a full tank, don’t top off.

Gas stations report shortages as pipeline shutdown drags on

More than 1,000 gas stations in the Southeast reported running out of fuel, primarily because of what analysts say is unwarranted panic-buying among drivers, as the shutdown of a major pipeline by a gang of hackers entered its fifth day Tuesday.

Government officials acted swiftly to waive safety and environmental rules to speed the delivery of fuel by truck, ship or rail to motorists and airports, even as they sought to assure the public that there was no cause for alarm.

The Colonial Pipeline, the biggest fuel pipeline in the U.S., delivering about 45% of what is consumed on the East Coast, was hit on Friday with a cyberattack by hackers who lock up computer systems and demand a ransom to release them. The attack raised concerns, once again, about the vulnerability of the nation’s critical infrastructure.

As South Carolina bureau reporter Greg Suskin filled up on Monday night, he said the station taped off the pumps. Greg said he learned that some stations that were out of gas Monday night, had gas as of Tuesday.

Officials said the problem is “panic-buying” -- people who fill up when they don’t need to and bringing extra containers to fill those up as well.

Channel 9 spoke to the manager of a busy gas station in Rock Hill, who said they are doing OK despite the rush of to the pumps.

“We never dropped down below 700 gallons of regular gas before we got our next shipment, and we’ve had two shipments plus a diesel truck came in since then,” store manager Erin Hope said.

A large part of the pipeline resumed operations manually late Monday, and Colonial anticipates restarting most of its operations by the end of the week, U.S. Energy Secretary Jennifer Granholm said.

Motorists may still feel a crunch because it takes a few days to ramp up operations, but she said there is no reason to hoard gasoline.

“We know that we have gasoline; we just have to get it to the right places,” she said.

S&P’s Oil Price Information Service put the number of gas stations encountering shortages at more than 1,000.

“A lot of that is because they’re selling three or four times as much gasoline that they normally sell in a given day, because people do panic,” said Tom Kloza, an analyst with S&P. “It becomes a self-fulfilling prophecy.”

(WATCH: Gas prices rising, State of Emergency issued after Colonial Pipeline cyberattack)

In Concord off Christenbury Parkway, Eyewitness News anchor Elsa Gillis stopped at a QT where drivers were lining up to get gas and an employee was outside directing traffic.

The store manager said they have been getting calls all day asking if they still had gas and by Tuesday afternoon, they were running out. He said the station usually gets four to five deliveries in the morning, but that did not happen Tuesday morning.

In the Hickory area, Channel 9′s Dave Faherty learned several gas stations had run out while others started limiting purchases to $20.

(WATCH: Some Hickory gas stations have a limit at the pump)

At a gas station in north Hickory, Channel 9 saw the line for gas stretch across the parking lot. Many of the people in Catawba County who spoke to us said they visited several gas stations before finally finding fuel.

“Eight, 10 places. Like I said, even the ones that have gas, it’s hard to get in there,” resident David Canham said.

“It’s like the toilet paper craze of 2020,” resident Lydia Carlino said. “I don’t know what happened to all the gas.”

“It’s been so frustrating,” driver Kaylee Cone said. “I didn’t know it was going to happen so quickly.”

The school districts in Hickory as well as Burke and Caldwell counties said they are working with their vendors and have enough fuel for now for the hundreds of buses across the Foothills.

Watauga County Schools said it buys fuel ahead of time and keeps it in storage tanks. The district said it has enough fuel to make it through the end of the school year.

To ease brief shortages, the White House is considering temporarily waiving a law that says ships delivering products between U.S. ports must be built and manned by Americans.

The Transportation Department also is relaxing some workforce requirements and enlisting railroads to deliver fuel inland. And the Environmental Protection Agency lifted some fuel quality requirements on an emergency basis.

“We’re looking at every option we have across the federal government and all of the federal agencies,” Granholm said.

How will gas pipeline cyberattack impact prices at the pump?

According to AAA, drivers are paying $0.8 more for a gallon in the Charlotte area since Monday and $0.14 more than last week.

The Colonial Pipeline transports gasoline and other fuel through 10 states between Texas and New Jersey. It delivers roughly 45% of fuel consumed on the East Coast, according to the company.

In the Carolinas, gas prices have increased significantly on the week as the Colonial Pipeline outage threatens prices and supply. AAA forecasted that gas prices will climb even more in reaction to the shutdown.

“The impact of this pipeline outage will vary regionally,” a spokesperson for AAA Carolinas said. “The outage will have implications on both gasoline supply and prices. The longer it is offline, the larger the impact on the east coast.”

Channel 9 wanted to give you more perspective on how past pipeline closures have affected prices and supply.

(WATCH: EXPLAINER: Why the Colonial Pipeline hack matters)

Action 9′s Jason Stoogenke said 2008 was the worst he could remember. Storms hit the Gulf of Mexico, and gas stations in the southeast had no gas. He said he remembers some stations rationing how many gallons you could get and setting his alarm in the middle of the night to go fill up. That went on for more than three weeks.

In 2016, the pipeline was damaged and the Charlotte area was only getting a third of the usual supply. The average Charlotte gas price went up $0.19 in a week.

In 2017, hurricanes Harvey and Irma took their toll on the gas situation. Drivers were still paying far more for gas than they were before the storms -- an average of $0.36 more -- more than a month later.

In 2019, there were attacks on the Saudi Arabian oil fields. Jason kept an eye on the prices at a north Charlotte gas station and they went up $0.16 in a matter of days.

AAA made these recommendations in order to avoid “panic-buying” of gasoline and conserving fuel:

  • Plan ahead -- knock out multiple errands in one trip
  • If you can, go at times when you are not sitting in traffic
  • If you own more than one car, use the more fuel-efficient
  • Remove unnecessary and bulky items from your car -- it takes more fuel to accelerate a heavy car
  • Don’t use as much A/C -- you may want to park in the shade so you can cool your car down more quickly

North Carolina, South Carolina enact price gouging law during pipeline outage

North and South Carolina’s top prosecutors have enacted a measure criminalizing price gouging following the shutdown of a pipeline that carries fuel to much of the state.

On Tuesday, Attorney General Alan Wilson announced that he had declared an “abnormal disruption” in the fuel market following the hacking of the Colonial Pipeline, allowing him to put the state’s price gouging statute in effect.

North Carolina Attorney General Josh Stein made a similar announcement Tuesday afternoon, saying the price gouging law is in effect after Gov. Roy Cooper declared a statewide state of emergency.

In such a circumstance, anyone found to be renting or selling a commodity at “an unconscionable price” could be charged with price gouging.

Anyone who suspects price gouging in South Carolina can contact Wilson’s office at 803-737-3953 or email pricegouging@scag.gov.

In North Carolina, you can report potential price gouging by calling 1-877-5-NO-SCAM or by filling a complaint here.

The pipeline, operated by Georgia-based Colonial Pipeline, carries gasoline and other fuel from Texas to the Northeast. It delivers roughly 45% of fuel consumed on the East Coast, according to the company.

It was hit by what Colonial called a ransomware attack, in which hackers typically lock up computer systems by encrypting data, paralyzing networks, and then demand a large ransom to unscramble it.

There were scattered reports of higher gasoline prices, but prices were rising even before the pipeline incident heading into the busy summer driving season. Nevertheless, U.S. Energy Secretary Jennifer Granholm warned gas station owners, “We will have no tolerance for price gouging.”

(WATCH: What to do if you see price gouging)

Gas prices could reach a 3-year high after a cyberattack on America’s largest fuel pipeline.

Hit by a cyberattack, Colonial Pipeline -- the operator of a major U.S. fuel pipeline -- said it hopes to have services mostly restored by the end of the week as the FBI and administration officials identified the culprits as a gang of criminal hackers.

U.S. officials sought to soothe concerns about price spikes or damage to the economy by stressing that the fuel supply had so far not experienced widespread disruptions, and the company said it was working toward “substantially restoring operational service” by the weekend.

The White House said in a statement that it was monitoring supply shortages in parts of the Southeast and that President Joe Biden had directed federal agencies to bring their resources to bear.

Colonial Pipeline, which delivers about 45% of the fuel consumed on the East Coast, halted operations last week after revealing a ransomware attack that it said had affected some of its systems.

(BELOW: Watch time lapse video from SkyDrone9 of lines at the Shell gas station at Mallard Creek and Prosperity Church roads.)

Nonetheless, the attack underscored the vulnerabilities of the nation’s energy sector and other critical industries whose infrastructure is largely privately owned. Ransomware attacks are typically carried out by criminal hackers who scramble data, paralyzing victim networks, and demand large payments to decrypt it.

The Colonial attack is a potent reminder of the real-world implications of the burgeoning threat. Even as the Biden administration works to confront organized hacking campaigns sponsored by foreign governments, it must still contend with difficult-to-prevent attacks from cybercriminals.

“We need to invest to safeguard our critical infrastructure,” Biden said.

Energy Secretary Jennifer Granholm said the attack “tells you how utterly vulnerable we are” to cyberattacks on U.S. infrastructure.

The attack came as the administration, still grappling with its response to massive breaches by Russia of federal agencies and private corporations, works on an executive order aimed at bolstering cybersecurity defenses. The Justice Department, meanwhile, has formed a ransomware task force designed for situations just like Colonial Pipeline, and the Energy Department on April 20 announced a 100-day initiative focused on protecting energy infrastructure from cyber threats.

Similar actions are planned for other critical industries, such as water and natural gas.

(WATCH: Colonial Pipeline VP takes Channel 9 to Huntersville spill and recovery site)

Despite that, the challenge facing the government and the private sector remains immense.

In this case, the FBI publicly assigned blame Monday by saying the criminal syndicate whose ransomware was used in the attack is named DarkSide. The group’s members are Russian speakers, and the syndicate’s malware is coded not to attack networks using Russian-language keyboards.

Anne Neuberger, the White House deputy national security adviser for cyber and emerging technology, said at a briefing that the group has been on the FBI’s radar for months. She said its business model is to demand ransom payments from victims and then split the proceeds with the ransomware developers, relying on what she said was a “new and very troubling variant.”

She declined to say if Colonial Pipeline had paid any ransom, and the company has not given any indication of that one way or the other. Though the FBI has historically discouraged victims from making payments for fear of promoting additional attacks, she acknowledged “the very difficult” situation that victims face and said the administration needs to look “thoughtfully at this area” of how best to deter ransomware.

“Given the rise in ransomware, that is one area we’re definitely looking at now to say, ‘What should be the government’s approach to ransomware actors and to ransoms overall?’”

Speaking later in the day at a conference on national security, Neuberger said the administration was committed to leveraging the government’s massive buying power to ensure that software makers make their products less vulnerable to hackers.

“Security can’t be an afterthought,” Neuberger said. “We don’t buy a car and only then decide if we want to pay for seatbelts and airbags.”

The U.S. sanctioned the Kremlin last month for a hack of federal government agencies, known as the SolarWinds breach, that officials have linked to a Russian intelligence unit and characterized as an intelligence-gathering operation.

In this case, though, the hackers are not known to be working at the behest of any foreign government. The group posted a statement on its dark web site describing itself as apolitical. “Our goal is to make money, and not creating problems for society,” DarkSide said.

Asked whether Russia was involved, Biden said, ”I’m going to be meeting with President (Vladimir) Putin, and so far there is no evidence based on, from our intelligence people, that Russia is involved, although there is evidence that the actors, ransomware, is in Russia.

“They have some responsibility to deal with this,” he added.

U.S. officials have sought to head off anxieties about the prospect of a lingering economic impact and disruption to the fuel supply, especially given Colonial Pipeline’s key role in transporting gasoline, jet fuel, diesel and other petroleum products between Texas and the East Coast.

Colonial is in the process of restarting portions of its network. It said that it was evaluating the product inventory in storage tanks at its facilities. Administration officials stressed that Colonial proactively took some of its systems offline to prevent the ransomware from migrating from business computer systems to those that control and operate the pipeline.

In response to the attack, the administration loosened regulations for the transport of petroleum products on highways as part of an “all-hands-on-deck” effort to avoid disruptions in the fuel supply.

“The time of the outage is now approaching critical levels and if it continues to remain down we do expect an increase in East Coast gasoline and diesel prices,” said Debnil Chowdhury, IHS Markit Executive Director. The last time there was an outage of this magnitude was in 2016, he said, when gas prices rose 15 to 20 cents per gallon. The Northeast had significantly more local refining capacity at that time.

The pipeline utilizes both common and custom technology systems, which could complicate efforts to bring the entire network back online, according to analysts at Third Bridge.

Granholm, the Energy Secretary, said “Cyber attacks on our critical infrastructure — especially energy infrastructure — is not going away.”

“This is a serious example of what we’re seeing across the board in many places and it tells you that we need to invest in our systems, our transmission grid for electricity. We need to invest in cyber defense in these energy systems,” she told Bloomberg TV.

The attack has not affected the supply of gasoline, she said, “but if it goes on too long, of course that will change.″

Gasoline futures ticked higher Monday. Futures for crude and fuel, prices that traders pay for contracts for delivery in the future, typically begin to rise anyway each year as the driving season approaches. The price you pay at the pump tends to follow.

The average U.S. price of regular-grade gasoline has jumped 6 cents over the past two weeks, to $3.02 per gallon, which is $1.05 higher than a year ago. The year-ago numbers are skewed somewhat because the nation was going into lockdown due to the pandemic.

The attack on the Colonial Pipeline could exacerbate the upward pressure on prices if it is unresolved for a period of time.

The Associated Press contributed to this article.

(WATCH: What you need to know about the Colonial Pipeline cyberattack)