Effects of the Colonial Pipeline Hacking - Research Paper Example

Hackers have caused great damage to many U.S. companies leaving a large negative impact on society. Recently the Colonial Pipeline has undergone a devastating computer system hacking that has led to many setbacks for its company and its buyers. The Colonial Pipeline is the largest pipeline system in the United States, carrying 3 million barrels of oil per day through its 5,500 mile-long pipeline. Fuel is transported from the U.S. Gulf Coast to the East Coast. The pipeline is operated by the Colonial Pipeline Company and is a major part of America’s fuel system. The hacking of the pipeline has affected the fuel supplies, fuel prices, and the company’s infrastructure.

In May of 2021, an American oil pipeline system, the Colonial Pipeline, endured a ransomware cyberattack that impacted the equipment that manages the pipeline. A criminal hacking group, the DarkSide, has been identified as the responsible party for hacking the pipeline’s equipment. It is scary to believe that this “was the result of a single compromised password” (Turton and Mehrotra). These actions brought the pipeline to a standstill throughout May, created shortages of fuel along the East Coast, and raised the average fuel price to its peak since 2014.

Following the hacking of the Colonial Pipeline, widespread fuel shortages occurred across several states. According to a recent CNN Business article, “rising outages are also being reported at gas stations…” (Egan). Because of the pipeline’s shut down, fuel ran dry leaving no oil source for gas stations. Citizens heard that gas may be out for an undetermined amount of time, making them anxious. This led consumers to buy large amounts of fuel, otherwise known as panic-buying. Panic-buying is influenced by an individual feeling threatened that they will be in a bad situation if they don’t have a product that is running low. Matt Egan from CNN, also wrote, “panic-buying threatens to exacerbate the supply shock” (Egan). The irrational behavior of panic-buying gasoline has only made the situation worse by prolonging supply issues. This lengthened supply issues because it created a delay due to the company not being prepared for a sudden drop in the stock. We need to raise awareness of panic-buying, and how dangerous it can be if we do not address it. This is a social issue that is a creation of the panic, which was originally started by the hackers. U.S. citizens must learn that they will not improve a situation if they hoard a rare product, especially with the knowledge that the pipeline will be up and running soon. 

The average gasoline price hit a 7-year high, due to the shutdown of the pipeline from the cyberattack. Nicholas Reimann, from Forbes, wrote, “gas shot up more than $3 a gallon in the U.S.” (Reimann). U.S. gasoline prices rose due to higher demand for the product. Lines grew long at gas stations from the worry of not being able to find gas if they waited. Consumers began buying large quantities of fuel, resulting in a large price increase. This follows the idea of supply and demand, when the demand exceeds supply, prices tend to rise. This has been the highest peak in gas prices “for the first time since 2014” (Englund and Nakashima). High fuel costs may not come across as a big deal to some, but it truly affects our economy in so many ways. Again, this is a major problem in society that was directly caused by consumers but is rooted from the hacking of the pipeline. The hackers led to the shut down of the pipeline, which ultimately caused gas prices to hit a 7-year high. With rising prices, America’s economy can drag by impacting how consumers budget to spend on every other aspect of their lives. Having higher gas prices will not only affect the cost to fill up your gas tank but can have a negative effect on America’s broader economy.

The Colonial Pipeline Company was forced to shut down its network of pipelines, meaning the largest pipeline in America’s fuel ran dry for days. As noted in a CNBC article, “the cyberattack forced the company to shut down 5,500 miles of pipeline” (Newburger). The shutdown was forced upon the company, as they did everything in their power to restore the service to the pipeline system. To resolve this incident quickly and safely, the company decided their best option was to pay “$4.4 million to a gang of hackers” to get their equipment restored (Bussewitz). We need to be thankful that the pipeline company worked quickly to come up with the best solution with American citizens in mind because making this decision can be highly controversial by encouraging other criminal networks to hack for ransom. Despite the FBI’s recommendation to not pay hacker’s ransomware demands, the company went against that suggestion because they didn’t want to risk losing all data while risking a data leak if the ransom went unpaid. Although this situation was left in the hands of the company and their relations with the government, it was caused by the hackers creating a major decision for the company to make if they should shut down the pipeline or not. The Colonial Pipeline company needed to take their options into careful consideration because millions of Americans rely on the Colonial Pipeline daily. 

To conclude, fuel shortages, rising fuel prices, and the shutdown of the pipeline’s network are major effects caused by the hacking incident at the Colonial Pipeline. Hacking has grown into a major problem, with increased attacks targeting the United States in recent years. If we cannot find a better way to improve our cyber security to protect our computer systems and equipment, hacking will become a larger dilemma in the future.