1. North American Energy Infrastructure Policy Philip Gonda Steven Mays Robert Floyd Josh Kapp

2. Background DOH defines the U.S. Energy infrastructure: – electricity, petroleum and natural gas. – 80 % under private ownership Electricity – generated at more than 6400 power plants, – moved over 200,000 miles of transmission lines – distributed to 143 million customers. Federal regulation – Federal Energy Regulatory Commission Regulates wholesale/interstate electricity sales Oversight of the reliability of Bulk Power Supply through NERC – North American Electric Reliability Corporation Establishes and enforces Bulk Power System standards. The Nations Bulk Power system – 8 regions U.S. Canada portion of Mexico. Oil/Gas Pipeline – Over 500,000 miles w/in U.S. – Federal government lacking sufficient regulation personnel

3. Cyber Attacks Issues: Cyber vulnerabilities w/in the National Energy Infrastructure – U.S. economy, emergency services and defense/security forces dependent on the Bulk Power System – System has become increasingly reliant on computers and integrated into the World Wide Web and national networks. Smart Grid Remote Stations – U. S. computer systems are under increasing attacks Director of National Intelligence – “dramatic increase in the frequency of malicious cyber activity targeting U.S. computer systems Secretary of Defense believes U.S. – “high risk of cyber attacks against U.S. critical infrastructures and network, the opponents are increasing their cyber capabilities and represent … a serious menace” – U.S. Bulk Power System cyber systems are not protected NERC responsible for establishing/enforcing cyber security standards Currently only 8 standards in place – Process cumbersome, slow and hard to enforce Presently only Electric and Nuclear sectors have some cyber security standards http://securityaffairs.co/wordpress/9403/security/secretary-of-defense-panetta-on-u-s-cyber-capabilities.html

4. Cyber Attacks Effects: – Destruction of Services Stuxnet Rolling Blackouts – Denial of Services Ping of Death Zero day exploits Coordinated cyber and offensive actions – Russia/ Georgian conflict was the first cyber attack and kinetic operation coordination Corrective Actions: – Incentivizes acceptance of Standards Reimburse cost of security equipment to private industry – Active testing NERC White hat system assessment Provides security status of Bulk Power System cyber security Populates cyber vulnerability/ mitigating action database – Collaborative info sharing Central site for push/pull cyber security information Patch Tuesday http://www.nytimes.com/2008/08/13/technology/13cyber.html?_r=0

5. Physical Attacks on Electric Grid Issues: – Attacks include physical damage from Terrorist Weather Competitors Employees Activists – Complete reliance upon Electricity – Integration of all other major energy sources rely upon electricity from the grid. – Substations and Large High Voltage Transformers Limited Security – Limited Spare Parts Available – Low Probability vs Massive Impact Effects: – Outages could last for weeks to months – Cascading Blackouts – Economic – Health and Human Welfare

6. Physical Attacks on Electric Grid Corrective Actions: – Increase Surveillance and Security on site – Incentives to promote the development, manufacture and stock piling of temporary spare parts – Increase investment in current infrastructure as well as Research and Development. – Increase Resiliency by creating a more dense network of High Voltage Transformers

7. Pipeline Infrastructure Issues Issues: Aging infrastructure – Unpredictable failure modes – Weather effects – Effects 1050 Incidents 36% Structural/material damage +$700 million 2000 injuries and fatalities 350,000 barrels of oil lost or spilled. Inadequate Federal Manning Levels – Effects Delegated Regulation Inconsistent regulation Excavation and Farming activities 23% Excavation Damage

8. Pipeline Significant Incidents

9. Pipeline Policy Proposal Leverage technology – Survey and assess the quality of pipeline – Ease manpower burden – Reduce disruption & destruction Information sharing & Transparency – Shared understanding of failure modes – Collectively mitigate risks

10. Energy Demand Issues: US is projected to become an energy exporter @ 2020. Energy for transportation and increased electrical demand of emerging economies drive concerns – If world competition increases, world price increases – If North American reserves are not fully realized, we again become and importer and need to compete on the world market Effects: – Diminishing Economy due to increased costs – Competition with other emerging countries (China / India) Corrective Actions: – State department helping industry in developing India and China. Encourage their membership in the Organization for Economic Cooperation and Development (OECD) – Continued R & D to encourage diversification is sources of energy, specifically Natural Gas, and Renewables – Continued R& D and incentives in Transportation sector to promote alternative fuels (Bio,Hybrid, CNG), and increase use availability of public transportation.

13. Transportation Projections

14. Questions?