A Recap of the Energy Security Council Conference

On August 14, 2014, the Energy Security Council (ESC) hosted its one-day summer conference alongside San Antonio’s scenic Riverwalk and Butchko, Inc. was there to meet with old friends, make new ones, and take the pulse of the oil and gas industry’s security community.

Two particular topics caught our interest at this conference. First, a nod from the FBI’s Special Agent in Charge (SAC) of the San Antonio region, Christopher Combs, towards what we’ve been saying for quite some time about the security issues in the Eagle Ford Shale Play region. He confirmed our ongoing analysis begun in 2012, in terms of who the threat actors are (the cartels – more specifically, the Zetas), their methods (using the cover of oil & gas operations and infrastructure), and the fact they are stealing product. That was indeed an interesting insight. Of course, he also made note of the other crime common to Shale Play boom areas such as theft of vehicles, equipment, etc. We are a bit skeptical of law enforcement’s stated solution to such a large-scale security issue. The “if you see something out of the ordinary, report it” approach – but it is a tactical answer to a strategic problem. We look forward to engaging in further dialogue with both law enforcement and industry on a holistic approach to security issues in Southwest Texas.

The second topic was very intriguing. Electrical substations have become a fixture within our communities and in the countryside that hardly merit a second glance. After hearing about the “Metcalf Incident” in California, that has changed.

On April 16, 2013, a key Pacific Gas & Electric (PGE) electrical transmission substation just south of San Jose, California, was severely crippled following a sustained attack on its critical components. This incident was severely under-reported by the media, partly because the Boston Bombing had occurred the previous day and was consuming the headlines at the time. Subsequent reports on this incident called it “vandalism,” ”shooting up” the substation, essentially downplaying or ignoring the fact that it was a deliberate, well thought-through, sustained attack on critical infrastructure that included penetration of an underground vault, severing of fiber optic lines that knocked out 911 service (they also disguised the vault access, making it appear undisturbed, to delay response to the outage), and then sustained, targeted, high-powered rifle fire over a 20 minute period that disabled 17 transformers and put at risk power feeding Silicon Valley and several large defense contractors.

PG&E’s former chief of corporate security, Michael Peterson, walked everyone carefully through the sequence of events of this incident and provided some key insights. The penetration of the vault, for instance, could not have been done by just one person because the cover is so heavy. The adversaries knew exactly where the vault was located and clearly targeted a single point of failure prior to the main attack. Further, the gunfire targeting transformers was heavy, sustained, and could not have been executed by one individual. This attack was likely carried out by a team of attackers who had planned the operation in advance – their point of entry and escape was covered by heavy vegetation and pointed to operational planning. Over 120 7.62 shell casings were found and Peterson emphasized that this was not “random” shooting at transformers.

What is equally disturbing was the initial lack of urgency in response to the attack. It took Peterson getting people in a room and spelling out the criticality of the infrastructure to get them focused. The investigation into the attack has thus far yielded no results. The key unanswered question to us is given the professionalism of the attack, could this have been a dress rehearsal for a much larger and more serious attack against critical US infrastructure?