money Russia-Ukraine crisis forces US energy rethink, stokes new cyber attack fears
In the wake of the Russian invasion of Ukraine, a debate is being revived about the sources and diversity of U.S. energy – and whether the country’s infrastructure is sufficiently protected against cyberattacks.
The fallout from Russian President Vladimir Putin’s decision to invade Ukraine has sparked a worldwide wave of condemnation, heavy sanctions and restrictions meant to punish Moscow for its aggression.
Those dramatic steps, which included Germany suspending the Nord Stream 2 pipeline and forcing Russia off the SWIFT banking system, are fanning fears of retaliatory attacks that may crimp world energy supplies. Early Tuesday, oil (CL=F) skyrocketed to new multi-year highs above $100 as Russia – one of the globe’s largest energy producers – zeroed in on Ukraine's capital city, Kyiv.
According to Senator Mark Warner (D-VA), Russia may choose to engage in cyber-warfare – putting critical infrastructure like power operators at risk.
“As these sanctions really start to cut into the Russian economy even further, Putin could say ‘all right, I’m gonna strike back against NATO and America,” Warner told Yahoo Finance Live on Monday.
“We have to acknowledge that Russia still has additional tools in the toolkit,” he says. “The idea that Russia may launch some of their cyber capabilities against America or the west, we have to be ready for that in the coming days as well,” he said.
Warner added the interconnected nature of networks means even an indirect cyberattack could quickly escalate the conflict beyond Eastern Europe.
The spillover effects on NATO members could get “very close to what would be considered an Article Five violation of the NATO treaty,” said Warner. That clause says an attack on one NATO member would be considered an attack on all members.
Sen. Warner stated U.S. cyber defenses are ready, citing several programs designed to thwart attacks; meanwhile, energy providers say they have been investing heavily in cybersecurity and physical security.
“We’ve been averaging about $3 billion a year for well over the past decade,” Ralph Izzo, president and CEO at energy provider PSEG, told Yahoo Finance Live on Monday. He said more investment has poured into a vulnerable power grid, preserving nuclear plants, and energy efficiency.
Energy providers also say the power grid can be protected from foreign attacks by diversifying the sources of energy a nation uses. “Over the longer term, [the Russian invasion of Ukraine is]
gonna have a lot of people re-thinking their energy security plans,” predicted Izzo. He forecasts a bigger shift to renewable energy and nations re-considering the use of nuclear plants to generate power.
“The United States has learned some lessons from 40 and 50 years ago about not having sufficient energy diversity and being overly reliant on nations that don’t always have our best interests at heart,” he added.
But despite precautions and defenses, Warner believes that at some point a cyberattack from a nation state will eventually get through. “The question for American businesses, industry and government will be even if the Russians are able to penetrate our cyber defenses, how quickly can we bring our systems back up in terms of resilience,” Warner added.
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