United States: Debate Over Cybersecurity Oversight For Gas Pipeline And Bulk Power Systems Continues

Last Updated: March 8 2019
Article by Carol J. Holahan

Earlier this month, Federal Energy Regulatory Commission ("FERC") Chairman Neil Chaterjee testified before the U.S. Senate Committee on Energy and Natural Resources on issues related to cybersecurity in the energy industry.

In his testimony, Chaterjee seemed to soften at least his messaging, if not his position, calling for increased mandatory oversight of cybersecurity for gas pipelines. In a joint letter written last June, Chatterjee, along with fellow FERC Commissioner Richard Glick, advocated for transfer of this oversight responsibility for gas pipelines from the Transportation Security Administration ("TSA") to the Department of Energy ("DOE").

The impetus for the letter was a cybersecurity event earlier last year in which multiple U.S. pipeline companies reported that certain of their communications systems had been shut down as a result of hacking. And while the event did not lead to a disruption in gas service, it underscored the increasing vulnerability of the nation's pipeline infrastructure and the U.S. electric grid, given the grid's heavy reliance on natural gas as fuel source.

The current level of TSA's oversight of the approximately 2.7 million miles of pipeline across the U.S. could be considered inadequate in several regards:

  • TSA has just six employees dedicated to this oversight, which amounts to 450,000 miles of pipeline oversight per employee.
  • TSA has no mandatory compliance or reporting requirements with respect to cybersecurity.
  • TSA relies exclusively on company self-reporting of cybersecurity incidents.

In stark contrast, the bulk power system is subject to intense, mandatory oversight and reporting with respect to cybersecurity:

  • Under the Federal Power Act, FERC has the authority to manage the standards, and oversight is carried out through the North America Reliability Corporation ("NERC").
  • For cybersecurity events that involve international actors, both DOE and the Department of Homeland Security ("DHS") also have oversight involvement.
  • Unlike the gas industry's discretionary self-reporting, NERC Critical Infrastructure Protection standards (CIP standards) include nine standards and approximately 45 separate requirements.

NERC's CIP standards are comprehensive; compliance with them can be time-consuming and expensive.

The bulk power system is seeing an increase in cyberattacks. Changes in technology and customer platforms that look to provide the end-user greater access to and control over the system also create greater vulnerability as interconnection points with the grid increase. The pipeline industry argues that its vulnerability is limited because many pipeline facilities still operate on manual controls to open and close flow. But as automation and digital sensors become more prevalent in the transportation of a physical commodity like natural gas or oil, the opportunities for cyber-intrusion similarly increase. Given the interrelationship between the gas and electric industries, and the growing vulnerability of both to cyberattacks, continued disparate treatment of the two industries for cybersecurity purposes becomes increasingly more difficult to justify.

Moreover, the lack of mandatory reporting standards for gas pipeline cyber events may, in fact, be leaving the industry less secure by creating a false sense of security. Last summer, FERC issued a final rule and instructed NERC to adopt new rules aimed at standardizing reporting of cyber events and required greater sharing of information with other agencies, particularly DHS. FERC determined that there was a "reporting gap," noting that for the same reporting period, NERC reported zero events, DOE reported four events and DHS reported 59 events. NERC is developing standards to address FERC's concern regarding reporting accuracy in order to gain a better sense of the frequency and scope of the attacks.

Not surprisingly, the gas pipeline industry continues to push back against any mandatory oversight, contending that its cybersecurity risks are simply not comparable to those faced by the bulk power system. Avoiding mandatory compliance requirements certainly has other benefits: in January 2019, media reports announced that NERC had issued a $10 million fine related to cybersecurity violations for what NERC called a company's culture of lax attention to cyber issues. By avoiding the imposition of mandatory compliance requirements, the gas pipeline companies remain free from the imposition of fines for non-compliance. A potential starting point for gas pipeline oversight could be those facilities that have digital interfaces and face comparable security risks as facilities serving the bulk power system. With this approach, as the pipeline industry transitions to more automated operation, a framework for oversight would already be in place.

Overall, strong arguments exist for ending the hodgepodge of regulatory oversight and disparate treatment for gas pipeline and bulk power systems with respect to cybersecurity management. Questions regarding which agency or agencies will control and how inter-agency coordination will be handled continue to linger, but as instances of cyberattacks grow, it is clear that the nation would benefit from a coordinated effort of oversight at the federal level, including a well-defined path for sharing information regarding cybersecurity events. Armed with a better sense of the nature and frequency of the attacks, improved protocols may help thwart acts of cyber-intrusion throughout the nation's energy infrastructure.

* * *

I was a recent guest on POWER Magazine's The POWER Podcast with Aaron Larson, where among other issues, I discussed some of the differences between natural gas pipeline and bulk power system cybersecurity requirements. Click here to listen to the episode.

To view Foley Hoag's Energy & Cleantech Counsel blog please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
22 Mar 2019, Other, Boston, United States

The New England Electricity Restructuring Roundtable has been meeting bimonthly since 1995 to discuss current topics related to important changes in the electric power industry in Massachusetts and throughout New England.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Country
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions