Cybersecurity in the Energy Sector
Published March 24, 2023
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The U.S. and global economies depend on energy to make nearly every facet of modern life possible.
Without reliable access to energy, manufacturing, agriculture, transportation, and other key components of the economy would quickly grind to a halt. Natural gas, oil, coal, and renewable energy sources all rely on cybersecurity.
According to a Lookout threat report, 17.2% of all mobile cyberattacks target energy companies, which makes the energy industry the largest target for cybercriminals and hacktivists.
Cybersecurity techniques, tools, and professionals help keep the energy sector secure in various ways. Some of the energy industries that rely on cybersecurity include extraction, production/generation, distribution, and consumption.
This guide explores the role of cybersecurity in the energy sector. We discuss how cybersecurity protects energy industries, common vulnerabilities, emerging opportunities, and potential security impacts to the future of energy.
How Cybersecurity Protects Energy Industries
Energy companies need cybersecurity professionals and their skills to protect their product at various points in the energy pipeline. Security needs may shift depending on whether an organization is local or national, public or private.
Energy companies can be vulnerable to cyberattacks that cause sharp price increases for consumers. In 2021, a cyberattack involving ransomware shut down Colonial Pipeline, the biggest pipeline operator in the U.S. and supplier of half of the East Coast's fuel.
This incident drew attention to the sector's vulnerability to hacking. Weeks prior to the attack, Colonial Pipeline had a cybersecurity management job vacancy, a position still empty at the time of the ransomware attack. Reports credit an inactive VPN as the weakness that allowed the attack.
In an April 2022 alert, the U.S. government warned energy companies that they were at high risk of cyberattack and hacking from custom-made malware.
The bulletin urged the energy sector to take various cybersecurity precautions, including enabling multi-factor authentication and consistently changing all passwords on their systems and devices.
Common Vulnerabilities
Below, we list some common vulnerabilities and emerging opportunities for cybersecurity in the energy industry.
Ransomware Attacks:
One of the biggest threats to the energy industry, ransomware attacks happen when cybercriminals use malware that blocks an organization's access to its own data, or threatens to leak sensitive information unless the company agrees to pay a ransom fee.
The industry can minimize damage from ransomware attacks by creating robust incident management response plans and taking precautions to secure computer systems upfront.
Hackers using ransomware against Norwegian green energy solutions supplier Volue Technology caused disruptions for customers in 44 countries.
Mobile Phishing:
The energy industry is very vulnerable to mobile phishing threats. A 2021 report from Lookout found a 161% increase in phishing attacks against energy employees between the second half of 2020 and the first half of 2021.
Employees in the energy sector use mobile devices that contain very sensitive information. Cybercriminals can penetrate an organization's computer network by using phishing emails and texts, websites, and login pages.
Energy companies are addressing this threat by training their employees to adopt best practices and spot phishing attempts.
Supply Chain Attacks:
Supply chain attacks happen when cybercriminals get unauthorized access to a company's computer networks via a third-party vendor. Third-party vendors may have less robust cybersecurity protocols than the energy companies they contract with.
The energy industry can address this issue by requiring third-party vendors to adopt cybersecurity best practices that include effective incident response plans.
Emerging Opportunities
Industry-Wide Action:
The World Economic Forum highlights the importance of energy companies working together to combat cyberattacks. Traditionally, each energy company created its own policies and procedures related to cybersecurity.
However, individual organizations benefit from combining forces to develop cybersecurity best practices, plans, and processes. This is increasingly important as energy systems become more interconnected and interdependent.
Proactive Approach to Cyber Threats:
Instead of taking a reactive approach to cyberattacks once they happen, the energy industry can adopt a proactive approach to identifying potential threats.
This includes emphasizing the importance of cyber resiliency as a core operational value for energy companies and their executives.
Government Interest in Helping:
Governments recognize that cybersecurity threats and attacks on the energy industry can greatly impact their citizens.
It is not hard to imagine a scenario where cyberterrorism is used against a country's power system, causing a national security issue. In 2022, the Department of Energy pledged to spend $12 million to help improve cybersecurity in the energy sector.
Which Energy Industries Rely on Cybersecurity?
Energy is one of the most promising industries for cybersecurity professionals. As cybercriminals focus more of their attacks on energy, opportunities for cybersecurity workers will likely increase.
The energy industry encompasses everything directly or indirectly related to producing or supplying energy. It includes both renewable and nonrenewable energy resources.
The extraction, production/generation, distribution, and consumption energy sectors can all benefit from cybersecurity professionals, techniques, and tools.
Extraction
Energy extraction refers to the process of taking raw materials from nature that can be turned into fuel to create power. Examples of extractive energy sectors include oil and gas drilling, and coal mining.
Energy exploration is a precursor to extraction, in which companies search for and find energy sources like oil and gas.
Important cybersecurity roles for the energy extraction sector include security director and security specialist.
Production/Generation
The energy production and generation sector takes the raw materials extracted from the earth and turns them into usable energy. The energy production and generation sector involves companies that refine renewables, as well as fossil fuels like oil and coal.
The energy production sector is vulnerable to ransomware attacks. Cybersecurity consultants and information security analysts may be especially critical to the energy production industry.
Distribution
The energy distribution sector focuses on getting power to the places and people that need it. It includes pipelines that collect and transport oil and natural gas.
The energy distribution sector is vulnerable to ransomware attacks and phishing attacks. The Pipeline Cybersecurity Initiative identifies key vulnerabilities for the oil and natural gas pipeline industry.
Important cybersecurity positions for the energy distribution sector include incident responder and vulnerability assessor.
Consumption
The energy consumption sector consists of the companies that deliver the energy to businesses and consumers. It includes utility companies.
Cybersecurity professionals that can help the energy consumption industry include information security analysts and security consultants.
The Future of Energy Demands Greater Security
The energy sector will need more security to ensure reliable power delivery. Due to its economic and national security importance, cybercriminals will likely continue to see the energy industry as a good target.
There is already an urgent need for general cybersecurity experts. The Bureau of Labor Statistics projects a 35% growth (much faster than average) in demand for information security analysts between 2021 and 2031.
Cybersecurity in the energy industry is already a crucial issue. As cyberattacks on the energy sector continue to increase, cybersecurity professionals can likely expect an excellent job outlook in the coming years.
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FAQ About Cybersecurity and the Energy Sector
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How crucial is cybersecurity to the energy sector?
Very crucial. Energy is one of the industries most vulnerable to cyberattacks. Because energy is so crucial to the global economy, cybersecurity in the energy sector is incredibly important.
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Which energy industries need cybersecurity the most?
Cybersecurity is increasingly important in many energy industries. A 2020 article by global management consulting firm McKinsey & Company reported that gas and electric-power companies are particularly at risk.
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What is the biggest threat facing the distribution of energy?
The biggest threats to the distribution of energy include cyberattacks, extreme weather, and wildlife.
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Can cyberattacks happen at utility companies?
Yes, cyberattacks can happen at utility companies. In fact, in its Cyber Risk Heat Map Report, Moody's identified utility companies as the most vulnerable to cyberattacks. Utility companies often take minimal risk mitigation measures, making them attractive targets.
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