Dividends and US steps in to help Colonial Pipeline after cyberattack

Dividend stock buyers are attracted to utility companies and many operate pipelines to move oil and gas. The reason is our economy is dependent on oil and gas and there tends to be a steady stream of usage which translates in stable earnings. In addition, the regulators of the utilities tend to listen carefully to the utilities and offer the ability to raise prices once a year, which continues to produce regular income streams. As an investor you like that.

In an article by Richard Valdmanis of Reuters, the pipeline operator Colonial Pipelines which transports about 2.5 million barrels of gasoline and other fuels from the refiners on the Gulf Coast (which over 50% of the refinery capacity in the US is) to consumers in the mid-Atlantic and south eastern US. The Pipeline was hacked into by ransomware and forced the company to shut down. Gasoline supplies will be limited and prices rise for consumers and the bigger issue is will the company have to pay the hackers to have their company again. The pipeline carries 45% of the gas used in the eastern US and runs straight from Houston to New Jersey. It also carries aviation fuel for airports including the busy airport of Atlanta.

Commerce Secretary Gina Raimondo has enlisted the government officials and cybersecurity firm FireEye to help solve the problem. There is another pipeline which carries a third of what Colonial does, however any lenghty shortage would increase tanker and truck volumes. The good news for consumers is the White House has a number of actions they can do and are doing. Perhaps because Colonial is headquartered in Georgia, Governor Kemp suspended state taxes for a week.

In a follow up, it took a week before Colonial Pipeline was up to speed again and the best news was the company was did the hacking was shut down and the money taken from their bank accounts. By who, no one is quite sure but it was likely related to the government of the US or Russia.

Linking to dividend paying stocks, many are the lifeblood of their communities and during AGMs it would be good to ask about cybersecurity.

There are more questions than answers, till the next time – to raising questions.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s