Energy Security Wars: Grids vs. Hackers

According to this Washington Post article, the grid doesn't always win, especially in some ambiguous foreign countries. Tom Donahue, the CIA's top cyber security analyst, made some news when he disclosed that cyber attackers have breached the electrical systems of multiple countries and have gone as far as powering down entire cities when their demands weren't met.

Of course, it's not business as usual for the CIA to speak out so publicly:

The CIA wouldn't have changed its policy on disclosure if it wasn't important. Donahue wouldn't have said it publicly if he didn't think the threat was very large and that companies needed to fix things right now.

But it's not just that hackers are getting more organized and more powerful. Grid breaches are occurring because new IT and communications technologies are making life easier for operators ... and at the same time, more dangerous for customers.  According to security specialist Ralph Logan:

In the past, if they wanted to go out and read a gauge on a gas well, for example, they would have to send a technician in his vehicle; he would drive 100 miles and physically read the gauge and get back in his truck. Now they can read it from headquarters. But it allows attackers a gateway into the system.

All I can say is get ready for the Smart Grid, DOD. I'd recommend more diesel generators on the base ... and lots of candles in the home.

Photo: Wikipedia Commons

DDR&E HASC Testimony March 3, 2009

Not much progress to report I'm afraid. Mr. Shaffer's defense of DOD energy activities made before the House Armed Services (HASC) committee on readiness, in response to the just released, highly critical GAO report on energy efficiency (and the lack thereof) at forward operating bases, was a rehash of presentations given over the past year. Many technology-based initiatives are cited, including the oft (read: over) used reference to spray foam insulation of tents.

But most bothersome is the clear lack of progress on energy processes and metrics. The energy efficiency KPP has been up in the air for almost a decade, and now in 2009 it is announced that a study will soon commence: 

OUSD(AT&L) and the Joint Staff will soon embark on developing a methodology for implementing the Energy Efficiency key performance parameter (KPP), established in 2007. The study will help inform us of when to apply this energy-related KPP, and how to determine what the metrics should be for a given platform or system type.

And the next item updates the status of a decision made in 2006 to use the JLTV program (and two others) to pilot energy metrics practices.  Three years later here's where we are:

The OUSD (AT&L), the Army, and the Marine Corps are in the very early discussions about how best to set energy “productivity” metrics for the Joint Light Tactical Vehicle program. We expect this to be addressed in the program’s study plan prior to the next milestone decision, currently scheduled for 2011.

"Very early discussions."  This is not change we can believe in.

Is Fuel Price Yo-Yo Broken?

I've posted on the yo-yo before. Basically it was a simple peak oil-based supply and demand system that had some logic to it. Speculation aside, it helped explain how and why oil was rising towards $150 last summer, and to a lesser extent why it began to fall off from its high of $147. But when demand started cratering in the fall, though the y0-yo effect would have predicted it, it had little to do with the high price of oil. The drop in prices turned out to be connected more closely with the sharp global economic downturn that became visible to the mainstream in 4Q08, and that signalled an almost unprecedented drop in demand. 6 months in, and we're seeing the next major snap of yo-yo take shape.  The WSJ reports that there are:  

mounting signs that the economic crisis and lower oil prices are shuttering projects around the world. OPEC countries—which meet next week to consider another output cut—have voluntarily slashed production by around three million barrels a day since last fall.  But the big and lasting cuts are coming in non-OPEC countries, where companies are postponing or canceling projects in droves. Bernstein Research said this week that non-OPEC oil production could fall by 2.5 million barrels/day over the next year.

A drop that steep,  analysts say, would more than make up for the steep fall in global oil demand. PFC Energy said in a report this week that it expects non-OPEC supply to continue to droop next year, losing an additional 460,000 barrels a day. Oil gurus at Barclays Capital predict that the fall in demand will become “less precipitous in coming months, while the supply-side contraction starts to bite and the impact spreads out from the physical markets.” Translation: Higher prices.

This time it's not rising demand that's looming (though many wish it were); it's falling supply that's going to drive the price up. I see a future yo-yo post on a reaction to higher prices in the form of more oil development. How it plays out timing-wise vis-a-vis a global economic recovery is the real wild card.

Photo of ancient Yo-Yo player: Wikimedia Commons

Honeywell Performs for DOD Energy Savings

Long before talks of energy stimulus began echoing down Pentagon halls, Honeywell engineers were bringing energy savings technologies to the DOD en masse. The company recently announced the award of an Energy Savings Performance contract (ESPC) with the Army Corps of Engineers to continue doing for the Army what it's been doing for the other services:

Honeywell has ... implemented energy conservation measures for the Air Force and Navy. Combined, the company's DOD work will provide around $540 million in guaranteed savings. Typical improvements include replacing and upgrading heating, ventilation and cooling (HVAC) equipment, installing centralized building automation systems, replacing outdated fixtures with energy-efficient lighting, tightening building envelopes through new windows and doors, and upgrading electrical systems. Renewable energy technology like solar panels and biomass boilers is frequently employed as well.

In case you can't tell, that's not high tech stuff; that's low hanging fruit by the bushel. And it pays for itself, guaranteed. Bravo!

Energy Security a Major Concern for China as Well

And you thought Energy Security was only something that keeps certain US officials up at night? The good news and the bad news is: we are not alone. Europe is increasingly being squeezed by Russia who, through the pseudo company Gazprom, can turn off the lights and heat in many major cities at (almost) a moment's notice. And now you can add China, with its formerly rapidly expanding and very energy intensive economy to the club:

Chinese security analysts fear that oil import dependency is a potential pressure point that could be exploited by future adversaries of the People’s Republic of China (PRC). Approximately 80 percent of China’s 3.3 million barrels per day (bpd) in crude oil imports passes through the Straits of Malacca. Such funneling could facilitate interdiction of China’s oil lifeline in times of crisis.

In "No Oil for the Lamps of China?" in the Naval Warfare College Review, Gabriel Collins and William Murray make it clear that China has ample cause to be concerned about keeping the oil routes open. Unlike the US, its ability to defend those lanes is far from mature. The paper also gets pretty detailed about how to perform an energy blockade of China, and what China's most likely responses would be. Very interesting reading about energy as an offensive and a defensive weapon.

DOD and USA Need to Get Smart (Grid)

At the intersection of energy security and cyber security lies the Smart Grid. Why all the bother; you might say: "What's the matter with the current grid? Everything's been just fine where I live."

Well here are a few facts for you:

• The DOE reports that in 2009 the average age of a substation transformer on the U.S. power grid is 42 years -- two years more than their expected life span. 
  
• They also observe that "If Alexander Graham Bell were somehow transported to the 21st century, he would not begin to recognize  the components of modern telephony – cell phones, texting, cell towers, PDAs, etc. – while Thomas Edison, one of the grid’s key early architects, would be totally familiar with the grid." Jeez.
  

And finally, this is the kicker for me: the DSB Energy Task Force 2008 report stated: 

Military installations are almost completely dependent on a fragile and vulnerable commercial power grid, placing critical military and Homeland defense missions at an unacceptable risk of extended outage.

Sounds to me like we're long past due for a better approach and infrastructure. For more see this nicely designed, if somewhat fluffy, DOE introduction to the Smart Grid.

Reader response to "DOD Overstimulated"

This just in from KTA on last Friday's stimulus post; it's a good one:

The author here is absolutely correct: there is a tremendously ironic possibility that the energy efficiency money is going to be frittered away in the most inefficient manner. However, that doesn't HAVE to be the case. Yes, the money is directed to the services and, as such, each service will make it's own expenditure decisions. This is going to increase the number of individuals who have their own agenda and pet projects. This will lead to  decentralized and uncoordinated efforts that will not have the power of synergy.  However, there are BIG projects, that can be undertaken service-wide, or, with SecDef guidance, DoD wide, which could yield tremendous efficiency gains.  They are not sexy and they are not likely to be on any base/post/garrison commander's wish list of projects.  But undertaking a coordinated, demand reduction program would create significant and measurable gains in energy efficiency and have the added effect of short payback periods.

Maybe a DoD-wide effort to retro-fit every appropriate ceiling/roof/attic with closed cell spray polyurethane foam isn't going to excite anyone. Maybe changing lighting and windows makes us all yawn.  And maybe doing so would anger every commander whose pet-project would not get funded. But significant efficiencies can be gained by making a bold decision at the outset. 

Choose to the right thing even if it's unpopular. The benefits are there for the taking. Such an action would be consistent with the appropriation and avoid the delay that will come in attempting to be responsive to the many and varied voices crying out for congressional dollars. This decision really isn't that hard. But it would require bold, decisive, strong leadership, whether from Secretary Gates or Secretaries Winter, Donley and Green.