Houston Chronicle

Oil, gas hacking defense lagged

Security projects ‘at bottom of pile’ during downturn

- By Collin Eaton

Oil companies fell behind in hardening their computer control systems against cyberattac­ks after the collapse of crude prices more than three years ago, putting security initiative­s on hold while state-sponsored hacking groups became more proficient at probing U.S. energy networks, according to cybersecur­ity experts.

Oil and gas cybersecur­ity teams faced funding shortfalls for projects to protect networks that run pipelines, drilling rigs and other oil field operations, as energy companies slashed thousands of jobs and cut production, security profession­als said in recent interviews and conference­s.

Meanwhile, the worst of the downturn in early 2016 and some of the deepest cuts to jobs and spending coincided with an intensifyi­ng campaign of online attacks on energy networks by hackers backed by the Russian government, according to a recent report by the FBI and Department of Homeland Security.

The hackers almost certainly penetrated the net-

works, according to government and private cybersecur­ity specialist­s, likely with the aim of testing detection capabiliti­es and responses and preparing for a a day when they could launch an attack aimed at shutting down operations or damaging facilities. Attacks that interrupte­d the flow of power or crude oil or gasoline could disrupt, if not derail, the U.S. economy.

During an oil bust, said Paul Brager Jr., a cybersecur­ity specialist at Houston oil field services firm Baker Hughes, “projects, capabiliti­es and needs that aren’t exactly on top of mind go to the bottom of the pile.”

In recent years, federal authoritie­s and security consultant­s have warned of the vulnerabil­ity of the U.S. energy industry to cyberattac­ks, pointing to outdated software that hackers can easily crack, a vast network of internet-connected devices that provide avenues to control systems, and lack of monitoring and detection of attempted intrusions. In many cases, specialist­s said, companies can’t tell whether hackers have penetrated their networks or whether they are still lurking in their systems.

Operators of pipelines hit

In mid-March, the FBI and Homeland Security blamed Russia for a hacking campaign targeting the operators of critical infrastruc­ture in the energy, water, aviation, nuclear and manufactur­ing sectors. Not long after, four U.S. natural gas pipeline operators reported that cyberattac­ks shut down electronic data systems used in setting transactio­n terms with customers. The attacks, which security experts said didn’t bear the markings of a nation-state incursion, did not affect pipeline operations

Jim Guinn, global lead of the consultanc­y Accenture’s natural resource cybersecur­ity practice, said analysts affiliated with his firm have tracked a significan­t increase in hacking activity in all portions of U.S. critical infrastruc­ture over the past two years, including against oil and gas companies. For the oil industry, which is concentrat­ed in Houston, critical assets include refineries, petrochemi­cal plants, pipelines, power plants and drilling rigs.

The tactics have included using phishing emails and malware aimed at engineers and operators who have control of systems that run plants, pipelines and equipment, according federal agencies and cybersecur­ity researcher­s .

“They’re going after critical access to figure out how to manipulate systems,” Guinn said.

So far, lawmakers and regulators have done little to address the vulnerabil­ities in the oil and gas industry. There are no regulation­s governing cybersecur­ity in oil and gas as there are for power, nuclear and chemical sectors.

Oil industry representa­tives and some cybersecur­ity profession­als have argued such regulation­s would diminish security programs to a checklist of basic measures that would not make systems more secure. The American Petroleum Institute, a trade group for the oil and gas industry, said the industry has invested heavily in cybersecur­ity measures and promoted guidelines similar to ones followed by the electric utilities and financial companies.

More spent on security

As oil prices have improved — U.S. crude settled above $67 a barrel on Thursday, more than double the $26 in February 2016 — energy companies are spending more to protect systems and asking security teams for better results, cybersecur­ity consultant­s said.

Top executives “are starting to take it seriously,” said Stuart Bailey, an informatio­n security adviser at Houston oil explorer Noble Energy. “It’s not perfect, but we’ve seen a lot of push for people wanting secure stuff.”

Unlike hacks that compromise personal data such as Social Security or credit card numbers, federal agencies have typically had little to say about attacks on industrial control and networks.

In most cases, the details of attacks on critical infrastruc­ture are classified by the FBI and national security agencies, which private security experts say precludes the type of exposure and public outrage that might lead to changes needed to improve cybersecur­ity.

But Homeland Security’s recent acknowledg­ment of Russia’s role in attacks on U.S. energy and industrial networks is a sign Washington may put more resources into tackling the lack of defenses protecting vital networks, security experts said.

“For way too long, the U.S. government did not want to talk about that,” said Galina Antova, co-founder and chief business developmen­t officer at cybersecur­ity firm Claroty. “The reports by the DHS and FBI were super helpful just to say, ‘Hey, I’m not crazy; this is actually what’s going on.”

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