From the alarm clock that wakes people in the morning, to the natural gas used to cook breakfast, to the refined petroleum products powering vehicles for daily commutes, energy is a constant in our lives each and every day. The Energy Sector was identified as one of the 16 critical infrastructure sectors outlined by Cybersecurity & Infrastructure Security Agency (CISA) in its Energy Sector-Specific Plan and comprises electricity, oil, and natural gas subsectors, which enable a thriving society and economy by powering essential functions of the modern world.
The sector’s roles include generating, transmitting, and distributing electricity and producing, refining, storing, and distributing oil and gas. While ownership models vary globally, private, federal, state, and local entities own the U.S. Energy Sector’s critical infrastructure. In certain instances, market consumers, such as energy-producing industrial customers and financial institutions, own these assets. According to the U.S. Energy Information Administration energy facts, petroleum and natural gas account for almost 70% of energy sources, with transportation and industrial sectors representing 70% of consumption. In addition to meeting the nation’s critical energy needs, the Energy Sector employs 8.1 million Americans, with growth outpacing overall U.S. employment.
The Energy Sector spans coast to coast, delivering technologies, opportunities, and challenges. These assets require safe and reliable operation for national security, which increases innovation demand to address evolving hazards and threats to critical infrastructures’ safety and reliability.
What Makes This Sector Critical to the Nation, and What Possible Effects Does It Have on States and Local Communities?
The Energy Sector’s criticality to the nation stems from its interdependencies with all other sectors – from healthcare to transportation to industrial manufacturing to electricity for homes and businesses, not to mention governmental agencies and first responders. The impacts on energy disruptions can be observed from events such as hurricanes, which have been increasing in number and intensity since the 1980s, according to a review by NASA.
The high winds and flooding that result from hurricanes can have a devastating effect on coastal communities. According to NOAA, hurricanes have caused the most weather-related disaster costs, totaling $1.3 trillion from 1980 to August 2023. The impacts on communities have been felt from Texas to Florida and as far north as New York City. Forcing residents within these areas to flee the path of the storm. Those who cannot are left to face the devastating impacts and resulting strain and resource limitations immediately after the storm. These storms can also directly impact energy infrastructure by knocking down poles and wires and leaving communities without electricity. Improving infrastructure resiliency, local energy sources, and production facilities for critical components can help speed recovery for the impacted communities.
Additionally, an overreliance on external energy sources can pose a strategic risk from supply chain disruptions, changes in production levels, and intentional sabotage. These factors increase the importance of domestic energy production. For example, recent military conflicts limited energy supplies to European countries, the global pandemic challenged supply chains, and the 2021 winter storm reiterated the interdependencies between electricity delivery, power generation, and natural gas. In each example, Energy Sector disruptions had acute and impactful effects on health and public safety.
The potential for such significant effects requires industry collaboration with critical infrastructure owners, operators, and all levels of government, as impacts at the state and local levels can significantly differ from national priorities. An example of this collaboration often occurs during major events where critical infrastructure representatives convene in emergency operations centers to ensure efficient communication between multiple owners and operators. These representatives work side by side 24/7 and remain in the facility for days until systems are stabilized or returned to normal levels. Public interest meetings, which allow community members to present and discuss concerns, often address stakeholder expectations specific to a local community.
Similarly, Energy Sector owners and operators often meet with regulatory bodies responsible for industry oversight. These interactions assist in prioritizing operational activities that may affect the community, particularly during states of emergency. For example, during various weather-related events such as hurricanes and winter storms, the Energy Sector has supported transportation, heating, and medical services. Although some people take readily available energy for granted, the absence of a functioning Energy Sector greatly impairs state and local community resilience. Regarding the electric utility sector in particular, mutual assistance agreements under which an electric utility that is being hit by a hurricane, for example, can call upon other electric utilities to send trucks, crews, and equipment to help restore power. This is often seen as large convoys of utility trucks on a major highway right after a storm.
What Are This Sector’s Key Assets and Interconnected/Interdependent Systems (Physical or Cyber)?
Each Energy subsector relies on complex equipment with long manufacturing lead times, including compressors, pumps, and valves in the oil and gas subsector. Large transformers are common to all subsectors but are of particular concern for electric utilities. With lead times potentially exceeding 36 months, many entities use front-end engineering and design processes to anticipate equipment requirements and mitigate risks.
Additionally, spare equipment strategies facilitate faster recovery following an equipment failure. These strategies can rely on assets owned by a single entity or through participation in a consortium of operators to gain access to a pool of common equipment types. Operators are constantly evaluating the most effective methods of risk mitigation based on the age and condition of in-service assets and dynamic lead times.
The Energy Sector has several interdependencies, with electricity required for producing, refining, and distributing petroleum-based products. In 2021, Winter Storm Uri in Texas underscored these interdependencies with a simultaneous increase in electricity and natural gas demand and a shortfall of electricity generation. An analysis of the event was conducted, resulting in a series of recommendations by the Federal Energy Regulatory Commission. The report highlighted the need for enhanced inter-sector coordination and planning. In 2022, natural gas accounted for approximately 40% of electricity production.
The scale and complexity of systems in the Energy Sector necessitate using advanced computer systems to monitor and control critical processes. These computer systems are key assets for certain functions and can provide autonomous actions based on predetermined logic. The geographic disparity of asset locations also increases the dependency on these systems. Such systems allow for remote human control of devices using Supervisory Control and Data Acquisition. Technologies that support remote controls and monitoring continue to evolve to meet the operational demands and the need to mitigate cyberthreats.
What Are This Sector’s Dependencies (Physical, Cyber, Geographic, and Logical) and Interdependencies With Other Critical Infrastructures?
The Energy Sector relies on other critical infrastructures to operate safely and reliably. The digitization of systems has increased the interdependencies in information technology and communications. Significant interdependencies also exist with transportation, water, financial, and government services.
Electricity provides energy to electrified transportation systems, pumps in water treatment plants, and transmission equipment in communication systems. Communication system equipment installed on electric infrastructure assets such as poles and towers creates additional interdependencies as an event can impact both.
The oil and natural gas subsector provides fuels for electric generation – large-scale power generation and smaller diesel generators with backup power for critical facilities or restoration efforts should a system-wide event result in a blackout. The Transportation Sector relies on fuel to operate vehicles to transport goods and equipment for multiple critical sectors, and, of course, there is a growing adoption of electric vehicles of all types. Although electricity is typically the primary power source for water and communication systems, oil and natural gas often serve as backup energy sources if electric service is interrupted.
As information technology systems have increased in importance, the intra-sector dependencies have also increased. The commonalities in cybersecurity practices lead to cross-sector collaboration and jointly developed frameworks. Energy Sector operators are constantly monitoring for cyberthreats and work across sector boundaries using trusted relationships with the government, peers within the industry, and other industries.
What Are This Sector’s Current and Emerging Vulnerabilities, Hazards, Risks, and Threats?
The Energy Sector faces a dynamic risk environment from modern technologies, climate change, and regulatory constraints. The threats faced by each subsector can vary widely depending on the market forces and geographic location. When prioritizing mitigation strategies, entities must weigh the potential consequences and probability of occurrence. Therefore, each subsector performs an array of risk assessments in coordination with peers and regulatory bodies to identify the sequence of plans to deploy.
The electric subsector follows guidance set forth by the North American Reliability Council and Federal Energy Regulatory Commission to address the following:
- Cyber and physical security,
- Natural disasters and extreme weather conditions,
- Equipment failure and aging workforce, and
- Changes in fuel mix.
With many of the same challenges, the oil and natural gas subsector has the following subsector-specific concerns:
- Transportation infrastructure constraints,
- Operational hazards such as blowouts and spills,
- Volatile price and demand, and
- Disruption due to political instability.
Lastly, a common challenge is the need for a skilled workforce as retirements increase and erode the institutional knowledge in many organizations. The need for talent extends across all sectors and roles, including technical design, engineering, and skilled trades. Training has become a priority to meet the next generation’s talents and development demands. An additional skill gap exists due to the new skills required to support energy transition. The International Renewable Energy Agency (IRENA) estimated that a transformed Energy Sector will have 122 million jobs in 2050. These jobs will be needed to support each component in the energy transition; however, the majority will be related to renewables, energy efficiency, and electrification.
The number of “green” job postings is outpacing the available talent, driven by the increase in investments planned due to the support from the Inflation Reduction Act. The skills required for the energy transition vary greatly but include digital technology, engineering, waste management, and skilled trades. Most training is offered through government programs aimed at upskilling or reskilling the workforce based on the anticipated skills needed for the transition. Industry and government need to partner in a manner to ensure the correct skills are being developed, opportunities are communicated to the potential workforce, and schools are aligned with the training required.
How Would a Human-Caused, Natural, or Technological Disaster Impact This Sector’s Preparedness, Response, and Recovery Efforts?
The Energy Sector has recorded three times as many Operational Technology and Industrial Control System cybersecurity incidents as other sectors. Disasters related to the Energy Sector are impactful based on interdependencies with other critical infrastructures. The consequences of disruption cascade quickly, impairing the ability to complete routine everyday tasks. The 2021 ransomware attack on Colonial Pipeline exemplifies how quickly the effects can propagate from operational impairment to economic and societal disruption. The ransomware attack resulted in some Americans panicking and causing long lines at gas stations out of fear of not knowing how long and severe the impacts would be. Such events highlight the need for effective communication with the industry when security postures need to change.
Attempted attack vectors include external remote services, removable media, remote services, and supply chain compromise; however, the most used approach is phishing. The ability to remotely initiate such attacks has required strengthening of cyber protections, including defense in depth, complex passwords, 24/7 threat monitoring, and segmentation of networks. In response to phishing, entities continuously train staff to avoid phishing scams and provide proactive awareness of the latest attempts. Cyberattacks can have adverse effects, from data loss to an inability to operate control systems. These same systems may directly support response and recovery efforts, which makes network segmentation a vital strategy to limit network access to personnel.
Natural disasters differ from human-caused attacks due to the ability to assess impacts more directly. While a cyberattack may slowly evolve without detection, many naturally occurring events typically have some advanced warning. Energy Sector operators typically have emergency operations plans for foreseeable disasters such as hurricanes and ice storms that may damage physical assets. As noted above, depending on the event’s severity, operators may call upon external resources in the form of mutual assistance. Trained operations personnel from areas outside the affected region can provide supplemental resources to speed up critical infrastructure restoration.
Technological disasters can result from complex interactions in interconnected systems. Due to the reliance on technology, an impaired or inoperable system may greatly reduce operational capabilities. The inability to operate a critical subsystem may lead to cascading conditions. As a result, operators in the Energy Sector often utilize redundant subsystems to increase technological resiliency. Manual processes are developed when possible as a backup in case the digital or technological solution is impacted, and personnel are trained to ensure the highest reliability achievable by the organization.
What Else Do Emergency Preparedness, Response, and Recovery Professionals Need to Know About This Sector?
The Energy Sector is a diverse and complex interconnection of technologies and processes developed over decades. As the sector moves toward an increasing level of renewable sources and outputs, maintaining the historical levels of reliability will require increased innovation. These innovations will require significant investment in research and development, often starting with demonstration projects at a smaller scale before achieving production levels. Government plays a vital role in risk reduction and acceleration by providing expertise and funding. The vast capabilities of U.S. national laboratories and universities working in collaboration with industry have long added to the success of the Energy Sector. Universities also assist by providing a talent-rich candidate pool with skills specific to current needs.
Many companies in the Energy Sector are pursuing cleaner energy, carbon reduction, and energy transition strategies. Much of the Inflation Reduction Act funding is tax credits intended to incentivize investment in cleaner energy, such as wind, solar, and hydrogen. Successful outcomes from the strategy will aid in pursuing ambitious carbon emissions goals and a supply chain less dependent on nondomestic manufacturing. Examples of such opportunities include battery manufacturing in Georgia, a solar complex in Alabama, hydrogen hubs throughout the U.S., and a wind turbine facility expansion in Colorado. Process facilities looking to deploy electrification to reduce emissions will need renewable sources to power the next generation of equipment. Renewable sources such as wind and solar require large sites, often located further from load centers. As a result, new high-capacity electric transmission lines must deliver electricity, often requiring extensive routing studies and permitting processes. Regulators are realizing the challenges, and, in some regions, efforts are optimizing processes to decrease project timelines.
Ultimately, an evolution of energy sources will take technical and nontechnical changes and public acceptance of new technologies and construction. While nuclear power remains a small portion of total energy production, one utility is in the process of bringing online the first new major nuclear site in the U.S. in decades. Developing small modular reactors may increase use and complement the intermittency of wind and solar. Intermittency (i.e., that solar power is not available when the sun does not shine, and wind power is not available when the wind does not blow) will pose the greatest challenge to the electric subsector’s continued reliability.
While large-scale generation sources are necessary for industrial customers, smaller-scale resources are beginning to proliferate on lower voltage distribution systems. As a result, the distribution system will also require significant changes to accommodate bidirectional power flow on a historically unidirectional system. Introducing producers/consumers, which act as generators and loads at the same point of system interconnection, will require electric subsector operators to have increased visibility and control across the electric grid.
Oil and natural gas will face alternative challenges, including an uncertain market environment regarding demand and the fuel cost for internal combustion engines. Some of the uncertainty stems from the adoption of electric vehicles. As electric vehicle makers increase production, decreasing the total cost of ownership from tax credits and price reductions may incentivize more individuals to purchase electric vehicles. Such market shifts have led Energy Sector companies to explore nonfuel revenue sources, including renewable energy, electric charging, biofuels, hydrogen, and liquid natural gas. Oil and gas companies invested in renewable energy and electric charging as a first step to diversifying from fossil fuels to lower carbon alternatives. However, carbon capture sequestration technologies could aid in delaying a more significant shift.
Acquisitions are often part of the diversification strategy and joint ventures, which allow entrance into the renewable sector at lower risk. Biofuel production and consumption, including ethanol, biodiesel, and renewable diesel, have increased yearly since the early 1980s. Government policies and programs have aided by promoting and sometimes requiring biofuels. Except for 2020, biofuel usage has expanded nearly 6% annually for the past five years and is likely to continue through 2030. Hydrogen may also be pivotal in resolving energy challenges in use cases including transportation, oil refining, blending into natural gas networks, and power generation. An advantage of hydrogen is its ability to be transported as a gas by pipelines or in liquid form by ships, much like liquefied natural gas (LNG). Hydrogen has potential beyond its common uses in oil refining and fertilizers and can assist in the energy transition through adoption in other sectors, assuming challenges can be overcome. This will require reduced hydrogen production costs, hydrogen infrastructure development such as refueling stations, and regulations for safely transporting and storing large volumes.
Lastly, international LNG shipments led to the U.S. becoming a net exporter of natural gas in 2017 and of total energy in 2019. Exports have grown steadily and are forecasted to grow, with two new liquefication projects planned to come online in 2024. LNG can assist in the transition to a low-carbon future by reducing carbon dioxide production compared to other fossil fuels. Its use can provide an affordable energy source as the challenges of intermittency and grid stability are resolved.
The Energy Sector continues to evolve as it supports the economic growth and national security of the United States. In addition to the possibilities delivered to end consumers, this sector is vital to all other critical infrastructures. Of the many challenges discussed, one of the most important is the recruiting and retention of talented problem-solving individuals dedicated to navigating a dynamic energy future. Through partnerships and innovation, it is possible to collectively achieve tomorrow’s goals with today’s reliability. Innovation will assist in mitigating future potential energy crises and avoiding scenarios such as the 1970s energy crisis, which resulted in the establishment of the U.S. Department of Energy. The ability to coordinate efforts among national laboratories, universities, and the private sector will once again be needed to introduce and integrate the next generation of energy innovations.