EOW May 2014

Transatlantic cable

Some leading energy security experts have reported that, despite rising anxiety over the possibility of a cyberattack, neither the energy industry nor the US government is set up well to counter the threat. Their report, released 28 th February, was sponsored by the Bipartisan Policy Center, a Washington non-pro t group. The study was led by Michael V Hayden, a former CIA director; Curt Hébert Jr, a former chairman of the Federal Energy Regulatory Commission; and Susan Tierney, a former assistant secretary of the Department of Energy and one-time utility regulator in Massachusetts. As summarised by Matthew L Wald of the New York Times ’s Washington bureau, the authors say that companies are reluctant to share information with one another – a critical step in reducing vulnerability – out of fear of being accused of antitrust violations or failure to comply with cybersecurity rules. Firms also have concerns about giving away proprietary information. The experts found that, while the government had focused on the high-voltage power grid, less work has been done on the lower-voltage distribution system, which could cause problems that would propagate up the chain. And, wrote Mr Wald, federal rules intended to protect the electricity distribution system from cyberattack were deemed inadequate because they do not give companies an incentive to continually improve and adapt to a changing threat. (“Power Grid Vulnerable to Cyberattack, Report Says,” 3 rd March) Not even public utility commissions were found to be ready for new problems. Regulated utilities can add security costs to the expenses for which they bill their customers, if the regulators nd the expenditures “prudent,” but “many regulators lack the expertise to make these judgments,” the report said. And many entities on the grid are unregulated in a competitive market, which may make it hard for them to recover their costs. † Mr Wald noted that outside experts endorsed some of these ndings. Samuel P Liles, an associate professor at Purdue University in Indiana, where he works in the Cyber Forensics Laboratory, said that sharing best practices was “a hit or a miss,” although information on threats was generally shared. At the Utilities Telecom Council, a trade association of electric and water utilities, Nadya Bartol, a cybersecurity expert, said the report was correct in asserting that utilities might not always come forward with helpful information. She told the Times : “They may hesitate to talk about their vulnerabilities because, ‘if I put it out in the public space, I will get hacked more.’” † Cyberwarfare is “a domain that favours the attacker,” Mr Hayden said in the panel discussion accompanying the release. But he said that the United States could reduce its vulnerability and improve its ability to recover. He and his colleagues recommended establishment of a group like the Institute of Nuclear Power Operations – formed by the nuclear industry after the Three Mile Island accident in 1979 – to conduct peer-to-peer audits and disseminate information on best practices. The former CIA director also invited perusal of a line of John Wayne’s, from the lm Sands of Iwo Jima: “Life is tough, but it’s tougher if you’re stupid.” Dorothy Fabian USA Editor

ArcelorMittal expects to source 100 per cent of the plate order – 160,000 tons – from three of its mills: Burns Harbor (long quench and temper plate), Coatesville (wide and heavy plate), and Conshohocken (lighter gauge plate). The bridge project is scheduled for completion in 2018. The present 16,000-foot, seven-lane cantilever Tappan Zee, spanning one of the widest points of the Hudson River about 25 miles north of Midtown Manhattan, is the longest in the state. After 15 years of planning, it is to be replaced with a 3.1-mile twin-span cable-stayed bridge with angled main span towers. The project is believed to be the biggest of its kind in US history.

Manufacturing

The approach of spring found American and global manufacturers on a comfortably ascending trend line

In its report for February, issued 3 rd March, the Institute for Supply Management (ISM) said that its PMI (purchasing managers’ index) registered 53.2 per cent for the month, an increase of 1.9 percentage points from January’s reading of 51.3 per cent – indicating expansion in manufacturing in the United States, for the ninth consecutive month. ISM’s New Orders Index for February registered 54.5 per cent, an increase of 3.3 percentage points from January’s reading of 51.2 per cent. And inventories of raw materials increased by 8.5 percentage points to 52.5 per cent. The Tempe, Arizona-based association develops its data from information collected from the nation’s supply executives. An exception to the improving trend was the Production Index, which at 48.2 per cent represented a decrease of 6.6 percentage points from the previous reading of 54.8 per cent. As in January, several respondents mentioned the severe winter weather as a factor impacting their businesses in February. Of the 18 manufacturing industries canvassed by ISM, 14 reported growth in February. These included primary metals, fabricated metal products, machinery, transportation equipment, appliances and components, and electrical equipment. Impediments to US power grid cybersecurity: an energy industry loath to share information, regulators lacking expertise In the January issue of EuroWire , this column recounted a drill in which US o cials and utility executives conducted a mock attack on the power grid, “knocking out” power lines and computers across America. “The enemy” injected computer viruses into grid control systems, bombed transformers and substations, and knocked out power lines by the dozen. It was persuasive. Unfortunately, despite the shock value of that exercise, it must be reported this time that securing the nation’s power grid will take more than a sti ening of resolve. Energy

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May 2014