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Ransomware Shuts US Colonial Pipeline  05/09 08:52

   The federal government is working with the Georgia-based company that shut 
down a major pipeline transporting fuel across the East Coast after a 
ransomware attack, the White House says.

   WASHINGTON (AP) -- The federal government is working with the Georgia-based 
company that shut down a major pipeline transporting fuel across the East Coast 
after a ransomware attack, the White House says.

   The government is planning for various scenarios and working with state and 
local authorities on measures to mitigate any potential supply issues, 
officials said Saturday. The attack is unlikely to affect gasoline supply and 
prices unless it leads to a prolonged shutdown, experts said.

   Colonial Pipeline did not say what was demanded or who made the demand. 
Ransomware attacks are typically carried out by criminal hackers who scramble 
data, paralyzing victim networks, and demand a large payment to decrypt it.

   The attack on the company, which says it delivers roughly 45% of fuel 
consumed on the East Coast, underscores again the vulnerabilities of critical 
infrastructure to damaging cyberattacks that threaten to impede operations. It 
presents a new challenge for an administration still dealing with its response 
to major hacks from months ago, including a massive breach of government 
agencies and corporations for which the U.S. sanctioned Russia last month.

   In this case, Colonial Pipeline said the ransomware attack Friday affected 
some of its information technology systems and that the company moved 
"proactively" to take certain systems offline, halting pipeline operations. In 
an earlier statement, it said it was "taking steps to understand and resolve 
this issue" with an eye toward returning to normal operations.

   The Alpharetta, Georgia-based company transports gasoline, diesel, jet fuel 
and home heating oil from refineries located on the Gulf Coast through 
pipelines running from Texas to New Jersey. Its pipeline system spans more than 
5,500 miles, transporting more than 100 million gallon a day.

   The private cybersecurity firm FireEye said it's been hired to manage the 
incident response investigation.

   Oil analyst Andy Lipow said the impact of the attack on fuel supplies and 
prices depends on how long the pipeline is down. An outage of one day or two 
would be minimal, he said, but an outage of five or six days could cause 
shortages and price hikes, particularly in an area stretching from central 
Alabama to the Washington, D.C., region.

   Lipow said a key concern about a lengthy delay would be the supply of jet 
fuel needed to keep major airports operating, like those in Atlanta and 
Charlotte, North Carolina.

   A leading expert in industrial control systems, Dragos CEO Robert Lee, said 
systems such as those that directly manage the pipeline's operation have been 
increasingly connected to computer networks in the past decade.

   But critical infrastructure companies in the energy and electricity 
industries also tend to have invested more in cybersecurity than other sectors. 
If Colonial's shutdown was mostly precautionary -- and it detected the 
ransomware attack early and was well-prepared -- the impact may not be great, 
Lee said.

   While there have long been fears about U.S. adversaries disrupting American 
energy suppliers, ransomware attacks by criminal syndicates are much more 
common and have been soaring lately. The Justice Department has a new task 
force dedicated to countering ransomware attacks.

   The attack "underscores the threat that ransomware poses to organizations 
regardless of size or sector," said Eric Goldstein, executive assistant 
director of the cybersecurity division at the federal Cybersecurity 
Infrastructure and Security Agency.

   "We encourage every organization to take action to strengthen their 
cybersecurity posture to reduce their exposure to these types of threats," 
Goldstein said in a statement.

   Ransomware scrambles a victim organization's data with encryption. The 
criminals leave instructions on infected computers for how to negotiate ransom 
payments and, once paid, provide software decryption keys.

   The attacks, mostly by criminal syndicates operating out of Russia and other 
safe havens, reached epidemic proportions last year, costing hospitals, medical 
researchers private businesses, state and local governments and schools tens of 
billions of dollars. Biden administration officials are warning of a national 
security threat, especially after criminals began stealing data before 
scrambling victim networks and saying they will expose it online unless a 
ransom is paid.

   Average ransoms paid in the United States jumped nearly threefold to more 
than $310,000 last year. The average downtime for victims of ransomware attacks 
is 21 days, according to the firm Coveware, which helps victims respond.

   U.S. law enforcement officials say some of these criminals have worked with 
Russia's security services and that the Kremlin benefits by damaging 
adversaries' economies. These operations also potentially provide cover for 
intelligence-gathering.

   "Ransomware is the most common disruptive event that organizations are 
seeing right now that would cause them to shut down to prevent the spread," 
said Dave White, president of cybersecurity firm Axio.

   Mike Chapple, teaching professor of IT, analytics and operations at the 
University of Notre Dame's Mendoza College of Business and a former computer 
scientist with the National Security Agency, said systems that control 
pipelines should not be connected to the internet and vulnerable to cyber 
intrusions.

   "The attacks were extremely sophisticated and they were able to defeat some 
pretty sophisticated security controls, or the right degree of security 
controls weren't in place," Chapple said.

   Brian Bethune, a professor of applied economics at Boston College, also said 
the impact on consumer prices should be short-lived as long as the shutdown 
does not last for more than a week or two. "But it is an indication of how 
vulnerable our infrastructure is to these kinds of cyberattacks," he said.

   Bethune noted the shutdown is occurring at a time when energy prices have 
already been rising as the economy reopens further as pandemic restrictions are 
lifted. According to the AAA auto club, the national average for a gallon of 
regular gasoline has increased by 4 cents since Monday to $2.94.

   Anne Neuberger, the Biden administration's deputy national security adviser 
for cybersecurity and emerging technology, said in an interview with The 
Associated Press in April that the government was undertaking a new effort to 
help electric utilities, water districts and other critical industries protect 
against potentially damaging cyberattacks. She said the goal was to ensure that 
control systems serving 50,000 or more Americans have the core technology to 
detect and block malicious cyber activity.

   Since then, the White House has announced a 100-day initiative aimed at 
protecting the country's electricity system from cyberattacks by encouraging 
owners and operators of power plants and electric utilities to improve their 
capabilities for identifying cyber threats to their networks. It includes 
concrete milestones for them to put technologies into use so they can spot and 
respond to intrusions in real time.

 
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