Pressing the point further, she said. “It’s not that we have a gasoline shortage. We have a supply crunch.” Still, the coming days “will be challenging,” she said, and she asked people not to hoard gasoline — amid indications that some people are doing exactly that.
Granholm said she has also briefed the governors of North Carolina and Virginia, both of whom have declared states of emergency to allow their own agencies to waive regulations that could hamper fuel shipments.
Colonial Pipeline, the main fuel conduit from Houston’s oil refineries to the East Coast, resumed some shipments on Monday and will decide on Wednesday when it will begin a full restart of the 5,500-mile line, Granholm said. But people in some of the states “still may feel a supply crunch as Colonial fully resumes,” she warned.
Bad ’70s Vibes
The fallout from the pipeline closure is just the latest hacking crisis to confront President Joe Biden, who came into office just as the U.S. was addressing massive cyber-spying intrusions from Russia and China. It also revives memories of the gasoline shortages and price shocks that plagued the nation in the 1970s, helping seal then-President Jimmy Carter’s defeat by Ronald Reagan at the end of the decade.
A handful of Biden’s critics, including former presidential son Donald Trump Jr., were gleeful to compare the two eras’ energy woes, even if the one from the 1970s dwarfs the current crunch.
“I guess my Joe Biden as Jimmy Carter 2.0 take is already aging like fine wine,” Trump tweeted late on Monday.
Industry analysts have said the pipeline would need to be shut for another week to cause real shortages of gasoline, diesel or jet fuel. Still, news of the hack prompted nervous drivers to flock to gas stations, and more than 1,000 outlets in the Southeast were believed to have run dry, said Patrick De Haan, market analyst with advisory service GasBuddy.
“There’s a 20 percent increase in U.S. demand compared to last week. That entire 20 percent is hoarding in the Southeast, [that’s] to blame for that. I think it’s kneejerk,” De Haan said. “The [toilet paper] shortage comes up in my mind. People just freak out. They don’t listen.”‘
In a statement on Tuesday, Colonial Pipeline said since it had shut the line down, it had supplied nearly 41 million gallons of product to customers, and it was prioritizing areas that were seeing supply constraints.
Wholesale diesel prices in the crucial New York Harbor trading hub were also rising as buyers in Baltimore sought barges of the product. But supplies on the water were ample, according to one commodities trader who requested anonymity because he wasn’t authorized to talk to the press.
“We’ve seen barges pulled down south,” the trader said, but “there’s plenty of ships in harbor.”
Some of Biden’s critics have leaped to turn the gas crunch to their advantage by portraying it as a consequence of misplaced priorities — saying the administration is too focused on climate change and renewable energy to fix the oil and gas supply.
Lawmakers were taking a more measured approach, with Sen. Shelley Moore Capito (R-W.Va.), who is leading the GOP infrastructure package talks with the White House, saying the attack on the Colonial Pipeline should spur a “healthy discussion” about adding pipeline cybersecurity language to a forthcoming infrastructure package.
“We haven’t really formally put that into a plan one way or the other, but I think we ought to talk about it,” she told reporters at the Capitol.
Meanwhile, Rep. Yvette Clarke (D-N.Y.), who chairs a Homeland Security subcommittee, became the first lawmaker to announce congressional hearings on the attack. “I plan to hold hearings on this incident to explore how we, as a nation, can prevent similar attacks in the future as well as to assess the federal response,” she tweeted.
But some other Republicans used the disaster to call for the administration to ease its resistance to new pipelines. Two leading House Transportation Committee Republicans — ranking member Rep. Sam Graves of Missouri and Rep. Rick Crawford of Arkansas — said the attack underscored the need to build new pipeline projects, such as the long-stalled Mountain Valley and Atlantic Coast natural gas pipelines. They also pointed to Biden’s quick decision to kill the Keystone XL pipeline, a long-debated project that would have delivered heavy Canadian crude oil to the Texas Gulf Coast.
None of those specific pipelines would have helped get gasoline to the East Coast during Colonial’s shutdown. Still, the GOP lawmakers called them cautionary examples.
“We cannot continue to limit our pipeline system’s capacity, as was the case with the Keystone XL pipeline, or these types of incidents will only pose more severe consequences in the future,” they said in a statement.
Among other steps Tuesday, Biden’s Environmental Protection Agency issued waivers to a dozen states through the end of the month exempting them from rules requiring cleaner summer-grade gasoline in some urban areas, while the Transportation Department was weighing lifting the Jones Act restrictions to allow foreign ships to move fuel supplies between U.S. ports.
Homeland Security Secretary Alejandro Mayorkas told the White House briefing that the move to consider lifting the Jones Act restrictions was not driven by any bottleneck in shipping, since “that need is not necessarily yet confirmed. But we wanted to be poised at the president’s direction to be ready and to be able to act immediately.”
The White House has taken pains to show it has been working aggressively since the Colonial Pipeline alerted it to the shutdown on Friday.
As reports of localized gasoline shortages began to emerge late Monday, White House press secretary Jen Psaki issued a statement saying that Biden was “evaluating every action the Administration can take to mitigate the impact as much as possible. The President has directed agencies across the Federal Government to bring their resources to bear to help alleviate shortages where they may occur.”
Gaps in Biden’s team
The assault — via ransomware from the cyber gang DarkSide — is the latest ransomware strike on U.S. companies, and it is the biggest ever cyber assault on U.S. energy infrastructure. Those rising risks have cast a spotlight on some holes still in the Biden administration’s teams that are tasked with bolstering U.S. defenses.
It took Biden almost three months to announce his nominations for the government’s top cyber jobs, national cyber director and director of DHS’ Cybersecurity and Infrastructure Security Agency. Congress created the former position late last year to coordinate the federal government’s cyber strategy.
The latter position has been vacant since former President Donald Trump fired CISA’s first director, Chris Krebs, for debunking election-related conspiracy theories.
“Senior officials are needed to push through conflict and make change,” said Matt Hayden, a former assistant secretary of homeland security for cyber, infrastructure, risk and resilience policy. “To the extent that the response to these events is going to be new, or requires re-organization efforts, you will need these seniors to be in place to maneuver these things.”
Biden also has not yet filled a range of important mid-level cyber positions, including the head of the Justice Department’s Criminal Division, which prosecutes criminal hackers such as the ones who breached Colonial; the State Department’s top cyber diplomat, who leads U.S. efforts to develop internationally recognized norms of responsible behavior in cyberspace; and the head of the Energy Department’s cybersecurity office, which works with energy companies to protect vital facilities. And late Monday, POLITICO reported that Michael Sulmeyer, a senior director for cyber policy at the White House’s National Security Council, had left this job earlier in the day.
The Energy Department’s office of Cybersecurity, Energy Security, and Emergency Response has been the main point of contact between the federal government and the Colonial Pipeline. It’s now led by acting Principal Deputy Assistant Secretary Puesh Kumar, who headed cybersecurity at utility Southern California Edison.
At least one Republican has criticized the administration for not seating a permanent head to the CESER office.
“The Department of Energy is responsible for responding to this attack, yet the administration still has not even put forward a nominee to lead CESER, its cybersecurity office,” Sen. Jim Risch (R-Idaho) said in a statement. “We need to prioritize hardening our cyber defenses and creating a comprehensive U.S. cybersecurity strategy. That begins with stepping up and filling the vacant assistant secretary role at CESER without delay.”
Others said it was important that all the slots be filled with Biden’s picks to ensure the operation was effective.
“The president needs ‘his people’ in place in order to best direct resources, communicate, and educate the American people,” said Brian Harrell, a former head of CISA’s Infrastructure Security Division. “This is a private sector response, but political leadership is useful to pass intelligence and mitigation measures quickly.”
Inside the White House, the response to cyberattacks now falls under Anne Neuberger, the deputy national security adviser for cyber and emerging technology. She is considered highly talented and is well respected by cyber experts, but she lacks the stature of a Senate-confirmed official.
She is also already busy leading the government’s response to the SolarWinds cyber espionage campaign, which includes a forthcoming executive order to strengthen the United States’ digital defenses.
Career civil servants carry out most of the federal government’s day-to-day cybersecurity work, but even a talented cadre of career employees needs senior-level direction, experts said.
“Having the right career employees is essential to execute on the mission,” Hayden said, but “not having these senior roles filled doesn’t help.”
Alexander Guillen, Sam Minz, Athony Adragna and Ben Leonard contributed to this report.
