Colonial Pipeline CEO on giving in to ransom demand: ‘right thing to do for the country’
- Colonial Pipeline paid $4.4 million in ransom money.
- CEO says it was the right thing to do.
- The firm's pipeline network provides nearly 45% of the East Coast fuel.
Joseph Blunt, CEO of Colonial Pipeline Co. told Wall Street Journal that the company had first discovered the hack at around 5:30 a.m. on May 7 and had decided by the night that they had to pay a $4.4 million ransom.
What played into the decision to pay?
Colonial Pipeline is the largest operator of fuel pipelines in the United States and provides nearly 45% of the East Coast fuel. The company reaches roughly 50 million Americans across 14 states and also provides fuel supplies to some major airports, air force bases and the army.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
So the firms’ pipeline network is a critical part of the energy infrastructure of the U.S. with the potential to cripple a part of the economy due to prolonged shutdowns.
On the company’s decision to pay the ransom amount, the CEO said:
“I know that’s a highly controversial decision. I didn’t make it lightly. I will admit that I wasn’t comfortable seeing money go out the door to people like this. But it was the right thing to do for the country.”
The company’s major pipelines were shut for 6 days which led to gas prices climbing to their highest levels since 2014 and left thousands of gas stations across many states without fuel.
Cost to the company
In addition to paying the $4.4 million, the hack will cost Colonial tens of millions of dollars more to recover some of the business systems while adding it is “still unable to bill customers following an outage of that system.”
Another cost has been the company’s loss of anonymity. He expanded by saying:
“We were perfectly happy having no one know who Colonial Pipeline was, and unfortunately that’s not the case anymore. Everybody in the world knows.”