correction

An earlier version of this article said that Colonial Pipeline had decided not to pay a ransom demanded by foreign hackers, citing two people familiar with the matter. In fact, Colonial had already paid, the company’s chief executive told the Wall Street Journal on Wednesday. This version has been corrected.

A sudden fuel shortage worsened across the eastern half of the United States on Wednesday after a cyberattack crippled a major pipeline, as long lines, sharp words and pumps gone dry greeted unhappy drivers from the Alabama foothills to the Chesapeake Bay.

Although government and industry officials said the nation had plenty of fuel and the pipeline was set to resume operations in the evening, nervous drivers clogged gas stations and created shortages in parts or all of 11 states. At least 12,000 gas stations reported being completely empty, and the squeeze pushed the price of a gallon past $3, its highest in years.

The crisis was man-made — first by the ransomware attack on the systems of Colonial Pipeline that led the company to shut down its pipeline connecting Texas to New Jersey, then by a panic that led drivers to fill up out of fear the country could run out of gas.

The sudden fuel shortage isn't the first time Americans have endured long lines and high gas prices. (The Washington Post)

As federal officials, executives and cybersecurity experts worked to get the pipeline up and running amid the frenzy, the long lines of frustrated drivers were the latest reminder of a country vulnerable to shocks and recalled the queues outside food banks, coronavirus testing centers and grocery stores over the past year.

Gulf Coast storage facilities were awash in gasoline and jet fuel, as refineries have kept operating, but without the region’s major pipeline in operation, there was little chance to resupply service stations. The shortage created a sort of feedback loop in some areas as drivers desperate to find more fuel burned through dwindling supplies.

“It was like vultures swarming the gas pump, just driving around in circles checking all the pumps,” said Alfonso Forte, a clerk at a Circle K north of Charlotte.

On Wednesday evening, Colonial announced that it would restart operations after discussions with the Biden administration.

Meanwhile, Colonial and its cybersecurity consultants were working to secure its servers, according to two people familiar with the matter.

In North Carolina, 65 percent of stations were out of gas Wednesday afternoon, according to GasBuddy. More than 43 percent were out in Georgia, South Carolina and Virginia.

The panic was so contagious that gas stations in central Florida, an area not supplied by the Colonial pipeline, were also running out of fuel.

The national average for a gallon of gas surpassed $3 for the first time since 2014, according to AAA. Governors in Virginia, North Carolina, Georgia and Florida have declared states of emergency.

There could be unintended consequences.

“The states of emergency allow the system to recover. They’re meant to repair the system, not cause alarm,” said Jeff Lenard, a vice president of the National Association of Convenience Stores.

The panic buying and price hikes have been seized on by some Republicans who tried to tie them to the Biden administration’s environmental policies. House Minority Leader Kevin McCarthy (R-Calif.) and others have said the crisis shows the folly of canceling the Keystone XL pipeline, though that project was proposed to carry crude oil and can be duplicated by rail transport.

Colonial Pipeline said it could take several days to get the multistate mess straightened out. And if the panic buying continues, that will further extend the debacle, said Ryan Streblow, interim president of National Tank Truck Carriers, a trade association.

The Biden administration has relaxed road rules and work-hour limits for truckers in 10 states, as well as regulations governing the blends of gasoline that can be sold. It is offering to waive the Jones Act, which normally prohibits foreign-flagged vessels from carrying cargoes between U.S. ports, on a case-by-case basis.

Colonial runs 5,500 miles of pipeline between Texas and New Jersey and supplies the East Coast with nearly half the gasoline it uses, as well as jet fuel and heating oil. It was shut down Friday when the company realized its computers had been subject to a ransomware attack. The smaller Plantation pipeline extends from the Gulf to outside Washington and remains in service. Two refineries, in Delaware and New Jersey, also continue to operate with crude that’s shipped to them by sea and rail.

Not only is gasoline in short supply where it’s needed, but so are the truckers who deliver it to service stations. The country as a whole has about 10 percent fewer tanker drivers than it did before the pandemic, Streblow said. “And you magnify that challenge when you have a disruption in the supply chain.”

In Atlanta on Wednesday, it rained steadily as drivers hunted for gas across the metro area. A Kroger gas station in Sandy Springs, north of Atlanta, ran out at 6:30 a.m. after getting a shipment just the day before. The station was hoping for another shipment Friday or Saturday — Sunday at the latest.

The station looked forlorn. Grocery carts and orange cones blocked the pumps to alert customers not to bother.

“We blocked off the entrances to the gas station because people are coming up in here and they’re wondering do we have gas, and I’m like, ‘Yeah, we don’t,’” said Aubree Grimsley, 25, who works the kiosk attached to the gas station. He was restocking snacks because he had little else to do or sell.

“There’s nothing you can do about it,” he said. “I can’t fix it.”

At a Costco gas station not far away, a tanker from KLC Petroleum Transport was filling the underground tanks as motorists waited in their idling cars.

Ethan Spear, who works for KLC, and may be one of the most popular people in Atlanta right now, was delivering the gas. Spear said it takes one to two hours to fill the big truck in Doraville, northeast of Atlanta, because the lines are so long on that end.

“It’s been a crazy experience,” Spear said. “We come here. We’ve gotta fight through the traffic in the parking lot.”

Rob Underwood, president of the Energy Marketers of America, said that gas stations were selling several days’ worth in a few hours, directly attributable to panic buying.

“There’s a lot of tension out there at the pumps,” Lenard said, and he argued that that’s a reason not to limit sales by rationing — many people are already angry enough about mask requirements. “It feels like it’s best really to stress that people need to use common sense,” he said.

But gas stations are dealing with what researchers in behavioral economics and neuroscience have labeled “the scarcity mind-set,” said Camelia M. Kuhnen, professor of finance at the Kenan-Flagler Business School at the University of North Carolina.

“When some resource is scarce, even just in the short term, people tend to get tunnel vision and fixate on how they can get more of that specific resource,” she said. “Basically, the brain focuses on solving very narrowly the problem of ‘how do I get more of the thing that is scarce?’"

Kuhnen said that for motorists in North Carolina and other states experiencing shortages, “the broader picture that is not seen by people lining up for gas for hours is that in a couple of days, the supply is expected to be restored close to normal levels. This scarcity problem will go away, and in a week’s time, we won’t even think about it anymore.”

The city of Charlotte has suspended nonessential use of city vehicles and is encouraging its employees to work remotely to save fuel. City officials don’t foresee an impact on police, fire, waste pickup or other essential services, city spokesperson Cory Burkarth said.

The Charlotte Area Transit System announced Wednesday that it would suspend all fares during the shutdown to ensure residents could get to work.

Susan Grissom, a chief analyst with the American Fuel and Petrochemical Manufacturers trade association, said that Gulf Coast refineries are continuing to operate because, once they are closed down, it can take a significant amount of time to start up again. She called on the Biden administration to offer a blanket Jones Act waiver to speed up deliveries by sea.

A spokeswoman for Mandiant, which is a division of the cyber firm FireEye, declined to comment.

The hackers, a criminal group thought to operate mostly out of Russia, also appeared to be readying to extort Colonial by stealing data that it could later threaten to release unless a fee were paid. But Mandiant quickly traced the stolen data to a server owned by a New York hosting firm, which over the weekend shut the server down, preventing any data from flowing to the hackers, according to several people familiar with the matter.

With that extortion avenue sealed off and with Mandiant helping to restore data and rebuild systems, “there’s no reason to make the payment,” one of the people said.

At Cashion’s Quik Stop, a local gas and food mart with four locations north of Charlotte, Scott Halsey, the company’s vice president, said he couldn’t get regular octane, so he bought a higher-octane fuel and sold it for the price of regular, “just so we had something to pump.”

It was gone by lunch. “We’re making no money,” he said.

As he talked, customers were still pulling up to empty gas pumps, hopeful because they saw motorists pumping the one fuel type still available — diesel. Halsey noted one customer who’d removed a plastic bag from a nozzle. “He’s trying to pump gas,” Halsey said.

The would-be customer gave up and drove off. Halsey headed to the pump and replaced the bag.

“We will take anything at this point to alleviate the situation,” said Underwood, of the energy marketers group. “But we have a reliable system. Yes, it’s down now. It’s going to be back up and running.”

Taylor Telford and Hamza Shaban in D.C., Pam Kelley in Charlotte, and Mark Shavin in Atlanta contributed to this report.

9:29 p.m.
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Colonial Pipeline says it is restarting operations

Colonial Pipeline announced that it has launched the restart of pipeline operations as of about 5 p.m. Eastern time. The company said “it will take several days for the product delivery supply chain to return to normal.” There will probably continue to be service interruptions. “Colonial will move as much gasoline, diesel, and jet fuel as is safely possible and will continue to do so until markets return to normal,” the company said.

8:37 p.m.
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Fear and misinformation about gas shortage spreading rapidly on social media

Chatter about the gas shortage is spreading rapidly on social media and in text-message groups, potentially aggravating the supply crunch as people urge friends and family members to stock up.

Twitter and Facebook were teeming with photos and videos of long lines at gas stations Wednesday, with many users citing an influx of messages in family and work group chats from people worried about running out of gas.

And though it was a ransomware attack against Colonial Pipeline that set off the chain of events, some social media users blamed the supply issues on President Biden, sharing stories from conservative media organizations that linked the administration’s decision to cancel the building permit for an expansion of the Keystone XL pipeline — which would only bring crude oil from Canada to American refineries — to rising gas prices.

Some accounts pushed false theories that the pipeline hack was done on purpose by the government or was a coverup meant to mask a pipeline leak or an environmental disaster.

Misinformation is rampant on social media, where baseless claims about the coronavirus and the 2020 presidential election have continued to spread despite some attempts by Facebook, Twitter and YouTube to contain them. Group chats via text message or on apps such as Facebook’s WhatsApp also help spread bad information quickly and cannot be moderated in the same way as public posts, because messaging is usually encrypted and private.

8:05 p.m.
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More than 10,000 gas station outages reported

According to user-reported data on the app GasBuddy, more than 10,000 gas stations across southeastern states ran dry Wednesday as panic-buying exacerbated shortages following a cyberattack that forced Colonial Pipeline offline last week.

High rates of outages remained most concentrated in the Carolinas, Virginia and Georgia. Fully 65 percent of gas stations in North Carolina were out of gas Wednesday afternoon, according to GasBuddy.

7:05 p.m.
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Colonial Pipeline said to have no plan to pay hackers ransom

Gas stations in the Southeastern U.S. saw long lines on May 10, as Colonial Pipeline tries to restore operations following a ransomware attack. (The Washington Post)

Colonial Pipeline has no plan at this point to pay a ransom to decrypt data files, said two people familiar with the matter. Rather, they are working with the cybersecurity firm Mandiant to restore the data from backup systems where possible and rebuild systems where backups are unavailable, said the people, who spoke on the condition of anonymity because the matter is still under investigation.

Colonial had no comment. A spokeswoman for Mandiant, which is a division of the cyber firm FireEye, also declined to comment.

The hackers, a criminal group thought to operate mostly out of Russia, also appeared to be readying to extort Colonial by stealing data that it could later threaten to release unless a fee were paid. But Mandiant quickly traced the stolen data to a server owned by a New York hosting firm, which over the weekend shut the server down, preventing any data to flow to the hackers, according to several people familiar with the matter.

With that extortion avenue sealed off and with Mandiant helping to restore data and rebuild systems, “there’s no reason to make the payment,” one of the people said.

DarkSide ransom demands can range from $500,000 to more than $5 million, according to Mandiant.

6:44 p.m.
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What the Jones Act is and how waiving it might affect fuel supplies

Federal regulators are weighing the possibility of waiving the Jones Act to help mitigate gas shortages gripping parts of the country.

The Jones Act is a federal law overseeing maritime commerce that allows only U.S. ships built, owned, operated and crewed by Americans to transport goods between U.S. ports. The Colonial Pipeline incident has renewed criticism of the law, with some experts pointing to state-of-emergency declarations in four states as a sign the Southeast needs all the help it can get as quickly as possible.

The 100-year-old law was designed to protect national security, said maritime historian and Campbell University professor Salvatore Mercogliano. In times of crisis, such as war or natural disaster, the federal government wanted to guard domestic businesses from international competition and ensure supplies would be available when needed. But it is sometimes waived in times of emergency.

Forty-four of the Jones Act fleet’s 57 tankers are sitting along the Gulf Coast or Eastern Seaboard, in addition to tugboats and barges. On Tuesday, the U.S. Maritime Administration surveyed fleet operators and determined which ships would be available to help transport more fuel to ports in the Southeast.

“You can still use foreign ships to bring oil and gasoline into the United States. They just can’t load that gasoline into an American port,” Mercogliano said. “What they need the waiver for specifically is to load it into an American port and discharge it into an American port.”

The Department of Homeland Security is responsible for approving or denying requests to waive the Jones Act, which in this case would allow foreign vessels to aid in the fuel shipping. But the agency has not signaled when it might make a decision. The last time the law was suspended was September 2017, when hurricanes wreaked havoc on Texas, Florida and Puerto Rico and residents needed emergency aid.

But even a temporary waiver can raise the cost of transportation, experts say, especially when shipping supplies to Puerto Rico, Alaska and Hawaii. It also may not be the most efficient in terms of immediacy, as it can take a week or two to reactivate stagnant vessels, Mercogliano said.

6:12 p.m.
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Sudden gas crunch collides with shortage of tanker truck drivers

The run on gas in parts of the southeastern United States is colliding with another logistical hurdle: a shortage of tanker truck drivers.

Well before a cyberattack forced the Colonial Pipeline offline last week, and before the coronavirus outbreak that set off massive disruptions to the labor force and to consumer behavior, the trucking industry has struggled to maintain a full workforce.

Before the pandemic, as the nation’s humming economy enjoyed a historically low level of unemployment, trucking companies turned to tried-and-true financial incentives to attract and retain workers: They boosted pay, offered bonuses and expanded their recruiting pool to consider people they previously would have turned away. But the shortage has persisted — owing in part, experts say, to the higher qualifications needed to transport fuel and to the attractiveness of other job opportunities.

In 2019, about 10 percent of trucks in the petroleum industry were sitting idle, according to industry estimates, but that figure ballooned to 35 percent, as the coronavirus pandemic drove down demand and tanker truck drivers fled to other lines of work.

“It’s not helpful that there is a shortage of drivers right now,” said Jeanette McGee, a spokeswoman for AAA. “However the industry is prioritizing refueling to areas that are strained at the moment.”

While experts say the United States has ample gasoline supplies, some terminals have gone dry because of the pipeline shutdown. Transporting fuel has now become a logistical choke point. Typically, gas is moved from abundant inland sources that are in proximity to pipelines. But to work around the crisis, trucks are forced to drive further or run different routes, adding time to fuel deliveries. In addition to rerouting trucks, companies are relying on imports and other pipelines to make up for the shortfall.

5:30 p.m.
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D.C.-region gas stations are seeing a ‘crush of customers’

Kirk McCauley, whose organization represents gas stations in Maryland, the District and Delaware, said some stations are running out of fuel as demand has surged. At the same time, a pandemic-related shortage of tanker-truck drivers has made it more difficult to get the tanks refilled.

As of Wednesday morning, McCauley said, tank farms in Baltimore, Springfield and Fairfax had enough fuel supplied by Colonial, but there weren’t enough drivers to get it from the storage facilities to gas stations. Many truck drivers who were laid off when people drove less earlier in the pandemic have found other jobs, he said, and it takes time for new workers to obtain the special licenses needed to transport hazardous materials.

“They’re seeing a crush of customers,” said McCauley, director of government affairs for the Washington, Maryland, Delaware Service Station and Automotive Repair Association. “People are filling up when they normally wouldn’t. The buying pattern has completely changed.”

John Townsend, spokesman for AAA-Mid Atlantic, said the average price of a gallon of gas hit $3 Wednesday morning, up 7 cents from last Wednesday. Prices were up 11 cents a gallon statewide in Maryland, 13 cents in Virginia and 3 cents in the District — the result of heightened demand, he said.

Some gas station owners are probably hiking prices, Townsend said, because they don’t know when they will receive their next shipment or whether it will cost more as demand soars.

4:17 p.m.
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Colonial Pipeline reports progress, says it has delivered nearly 1 million barrels

Colonial Pipeline has brought parts of its fuel system back into operation, according to a statement posted on its website Tuesday evening.

The Alpharetta, Ga.-based company, which was the target of a cyberattack last week, said it delivered about 967,000 barrels to various markets, including Atlanta; Belton and Spartanburg, S.C.; Charlotte and Greensboro, N.C.; Baltimore; and Woodbury and Linden, N.J.

The company said it has taken delivery of an additional 2 million barrels from refineries in anticipation of a restart.

“Consistent with our safety policies and regulatory requirements, Colonial has increased aerial patrols of our pipeline right of way and deployed more than 50 personnel to walk and drive [about] 5,000 miles of pipeline each day,” the company said.

4:15 p.m.
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Average gas price cracks $3 a gallon for first time since 2014

Panic-buying in the wake of the Colonial Pipeline ransomware attack has jacked up gasoline demand and pushed prices to a six-year high, with the national average for a gallon of gas surpassing $3 for the first time since 2014, according to AAA.

In 2020, prices peaked at $2.60 per gallon before the pandemic took hold. Analysts had expected gas prices to creep up throughout the year as pandemic restrictions loosened and widespread vaccinations got Americans back on the road.

“While this is not a milestone anyone wants to celebrate, it’s a sign that things are slowly returning to normal,” Patrick De Haan, head of petroleum analysis at GasBuddy, said Wednesday in a statement. “In this case, rising gas prices are a sign Americans are getting back out into the world.”

The short-term pressure on gas prices is coming from shortages in the Southeast as drivers rush to stock up while the Colonial Pipeline, which supplies about 45 percent of gas on the East Coast, is out of service. Governors across the Southeast have used executive orders to put protections against price-gouging in place while the pipeline is brought back online.

On Wednesday, a BP station in Richmond was charging $6.99 a gallon.

The Biden administration has taken a number of actions to ease pain at the pump in the aftermath of the hack.

Earlier this week, the Department of Transportation issued exemptions to add flexibility for drivers hauling fuel to 18 Eastern states, allowing them to drive longer shifts and carry overweight loads. The Environmental Protection Agency temporarily waived environmental requirements to allow retailers in 12 states and D.C. to sell gasoline that would not normally meet regulatory standards through the end of the month.

3:52 p.m.
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Some Republicans call for increased energy independence

Responding to news of gas stations becoming overwhelmed amid the Colonial Pipeline hack, some Republicans blasted the Biden administration’s actions on oil and drilling.

House Minority Leader Kevin McCarthy (R-Calif.) said in a Tuesday tweet that the situation “shows that we need more American energy to fuel our economy, not less.”

“But the Biden Administration has already canceled the Keystone Pipeline and paused oil and gas drilling,” he wrote, “leaving our energy supply more vulnerable to attacks.”

Rep. Nancy Mace (R-S.C.) made similar comments during a Tuesday appearance on Fox Business, criticizing the president for revoking the permit for the Keystone XL pipeline. The controversial project would have carried Canadian crude oil to the Texas Gulf Coast.

“Under President Trump’s administration, we were less dependent on foreign sources of energy,” she said. “Under the Biden administration, well, he’s reversing that policy, and we’re seeing the effects of that today.”

3:21 p.m.
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Virginia under state of emergency because of fuel shortages

Virginia Gov. Ralph Northam (D) declared a state of emergency Tuesday in response to a cyberattack affecting operations of the Colonial Pipeline, a key source of fuel for much of the East Coast.

Some pipeline operations are beginning to be restored after a temporary shutdown, and the company says it hopes to be largely back in business by the end of the week. But anxious motorists rushing to fill up tanks have led to shortages, and a small percentage of stations in Virginia, Georgia and other states have been left with no gas to sell, industry analysts said.

“If prolonged, the pipeline closure will result in gasoline supply disruptions to various retailers throughout the Commonwealth, since the pipeline is the primary source of gasoline to many Virginia retailers,” Northam’s order read.

The emergency declaration is set to last a month, unless it is canceled or extended.

3:15 p.m.
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Panic-buying is a self-fulfilling prophecy, analysts say

As drivers across the Southeast flock to gas stations to stock up in the wake of the Colonial Pipeline hack, they’re fueling panic and creating unnecessary scarcity, experts say.

By Wednesday morning, panicked drivers had drained pumps at more than 60 percent of the stations in metropolitan Atlanta and Norfolk, and more than 70 percent in Charlotte and Raleigh. Nationwide, fuel demand is up more than 10 percent compared with a week ago, according to Gas Buddy analyst Patrick De Haan. In the most deeply affected states, demand has soared more than 40 percent.

Pavel Molchanov, an energy analyst at Raymond James, called the situation a “textbook example of a self-fulfilling prophecy.”

“Some people hear a rumor or a news story about individual instances of fuel stations running out, they rush to buy extra fuel (perhaps more than they need), and the aggregate result is that this panic-buying ends up creating the very shortage which people fear,” Molchanov said in an email to The Washington Post.

“This is reminiscent of how supermarkets were running short on toilet paper, etc. in the earliest days of the covid pandemic in the spring of 2020 — same underlying issue of consumer psychology.”

In a briefing Tuesday in Washington, Energy Secretary Jennifer Granholm said the Southeast could expect a “crunch” that will take several days to alleviate, but she cautioned that there is “no cause” for hoarding gas.

“We have gasoline,” Granholm said during a White House briefing. “We just have to get it to the right places. And that’s why I think the next couple of days will be challenging.”

Granholm said Colonial Pipeline officials had told her that a decision on a “full restart” could come as soon as Wednesday evening.

2:33 p.m.
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Glut of fuel on Gulf Coast is causing a scramble for storage

Rates for oceangoing vessels capable of carrying gasoline and other refined petroleum products have been spiking as Gulf Coast refineries unable to ship through the Colonial Pipeline are looking for floating storage options, Louise Dickson, an oil markets analyst for Rystad Energy, wrote in a note Wednesday.

Alternatively, Dickson said, several Gulf Coast refineries are analyzing whether they should cut back production if the pipeline is not quickly back in action.

Although the Biden administration is considering whether to waive the Jones Act and allow foreign-flagged ships to take gasoline from the Gulf Coast to Eastern ports, Dickson notes that waterborne transport poses its own challenges: It’s slower and more expensive than using a pipeline.

“There could be a similar constraint on the transport of oil products by road — the Covid-19 crisis resulted in many oil-truck drivers losing their jobs, so there could be a shortage of qualified labor to deliver gasoline to places like Georgia, North Carolina, and Tennessee,” she wrote.

If the United States seeks to ship fuel in from Europe, time is again an issue: Analysts who follow the tanker trade say that it takes nearly two weeks to load a ship, sail across the ocean and discharge.