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Tech firms vie to secure energy sector against cyberattacks
From: Audrey McNeil <audrey () riskbasedsecurity com>
Date: Tue, 21 Jan 2014 18:19:06 -0700


To hear cybersecurity companies tell it, the U.S. energy industry is a
ticking time bomb.

Smart electric meters on the sides of houses can be entryways for
cyberterrorists to shut off a city’s power grid. Remote-controlled valves
in oil refineries can be manipulated to cause costly spills.

As reports of hacking perpetuate around the globe, security and technology
firms are rushing to introduce high-tech products and services to protect
power plants, pipelines and oil companies from cyberattack.

The emerging business could soon be worth billions of dollars a year as
agencies including the Federal Energy Regulatory Commission and the Nuclear
Regulatory Commission order companies to better protect the infrastructure.

“It’s huge,” said Greg Bell, a partner with the consulting firm KPMG who
works in its cybersecurity division. “Almost every device we put in a power
plant or an oil refinery is computer-controlled. They all have to be
secured. Cybersecurity is a growth area across all the different
industries, but especially oil and gas and [power] transmission.”

The U.S. Department of Homeland Security maintains a cybersecurity team
that responds to hacking attacks in the country’s private sector. Of the
almost 200 cases it handled last year, more than 40 percent were in the
energy sector, according to an agency report.

Would-be attackers include anti-capitalist groups, criminal organizations,
rival companies and those employed by foreign nations, Bell said.

So far, as a homeland security official acknowledged in a recent
conversation, there has not been a successful large-scale cyberattack on
the U.S. energy industry. No grids have lost power, no pipelines have been
tricked into shutting down.

The most publicized incident came three years ago, when the FBI put out an
alert that a criminal group in Puerto Rico had compromised a local
utility’s smart meters. The meters were rigged to underreport customers’
electricity use, resulting in losses of up to $400 million, the agency said.

Fighting ‘rogue code’

Now, companies such as Maxim Integrated, a semiconductor company with a
large operation in North Dallas, are offering chips designed to protect
against hacking and alert utilities when a smart meter is tampered with.

“It used to be if you wanted to take down the grid, you had to break into a
control room or blow up a substation,” said Kristopher Ardis, executive
director of Maxim’s energy solutions division. “Now all it takes is someone
in the supply chain to load in some rogue code.”

Verizon is also getting into the smart meter business. Last month, the
wireless communications company released a cloud-based platform to protect
smart meters, among other wireless devices, against hacking.

Asked about the suite of new products hitting the market, Chris Schein, a
spokesman for the transmission company Oncor, said the company has long
taken steps to protect smart meters and is confident in its security.

“We’ve been dealing with meter fraud for years,” he said.

Incentives for hackers

The degree of vulnerability within the electrical sector is up for debate.

The industry is one of the most proactive when it comes to cybersecurity,
said Jonathan Shapiro, a former telecommunications entrepreneur who works
for the University of Texas at Dallas on cybersecurity projects. Tampering
with a grid might sound dramatic. But the financial incentive for criminals
is modest when compared with what they can make stealing credit card
numbers from banks.

“Here in Texas, everyone communicates and does scenarios. The Texas
electric industry is ahead of other parts of the United States,” he said.
“With utilities, you don’t attack to get rich. You need another reason. And
in that case you’re really talking about nation states.”

Power companies generally keep the networks that control the grid
disconnected from the Internet to deter hackers. But that policy is not
always followed to the letter, and there has been evidence of hackers
probing networks looking for an entryway, Shapiro said.

For the oil and gas industry, cybersecurity is an increasing concern. For
the last eight years, the American Petroleum Institute has hosted a
cybersecurity expo in Houston for industry consultants and executives.

Still fresh on the industry’s mind is a series of attacks beginning in 2009
in which hackers believed to be working in China infiltrated the computers
of executives at oil and petrochemical companies around the globe.

According to a report by the California computer security firm McAfee, the
attack was nicknamed “night dragon.” The hackers were able to walk away
with emails and other documents using tools widely available on underground
Chinese websites.

Ed Goings, who leads investigations of cyberattacks for KPMG, said no
security system is foolproof. All companies can do is make sure their
systems are more secure than their competitors’.

“My father always used to say locks are for honest people,” he said. “If a
criminal wants in, they will find another way in. I can put enough locks on
to make myself feel comfortable and safe. But always be aware there still
may be a break-in. And [learn] how to minimize the damage if and when it
does occur.”
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