Next Deepwater Horizon-scale oil spill could be caused by cyber attack

April 20, 2015
To match Feature BP/PLAINTIFFS

Fire boat response crews battle the blazing remnants of the offshore oil rig Deepwater Horizon, off Louisiana, in this handout photograph taken on April 21, 2010. REUTERS/U.S. Coast Guard/Handou

April 20th marks the fifth anniversary of the landmark Deepwater Horizon disaster that saw millions of gallons of crude oil leak into the Gulf of Mexico.

Yet despite the cost to its reputation — not to mention many billions of dollars — BP, the oil major that had leased the Deepwater Horizon oil drilling rig, is emerging more strongly than some anticipated in the wake of the spill. Its comeback has partly relied on off-shore drilling, a practice that still carries environmental risks – along with a potential new set of cyber security concerns.

“Risk free” drilling is unrealistic. And modern technology brings additional potential hazards, as well as opportunities, for oil companies.

Over the last five years, it is estimated that over half of new international hydrocarbon reserves have been discovered in deepwater drilling locations. Despite ongoing reviews to safety measures and better technology, the prospect remains of future disasters.

A report last year by reinsurance broker Willis Group asserted that too much of the energy sector has no insurance against major cyber attacks. This could threaten “a major energy catastrophe — on the same scale — as […] Exxon Valdez or Deepwater Horizon.”

As the report noted, modern technology now allows oil and gas networks to be operated remotely. However, this provides scope for hackers and computer viruses to potentially target the electronic infrastructure. Oil pipelines or refineries could be placed at new risk as a result.

Thirty-two percent of attacks on critical national infrastructure were targeted on energy firms in the fiscal year 2014 year according to Department of Homeland Security data. This situation represents a “time bomb” in Willis’s view, with energy companies needing to enhance their cyber defenses.

Despite these conventional and unconventional challenges, the appetite of major oil firms to operate in deepwater areas remains strong. And, given new reserves being found there, these locations are proving a rewarding frontier for oil exploration.

In this context, some progress is being made toward mitigating the risks inherent in deepwater drilling.

The Deepwater Horizon disaster received massive global attention, and the subsequent regulatory and political backlash was, in some respects, a watershed moment for the industry. Soon afterwards the United States temporarily declared a moratorium on deepwater drilling.

Earlier this month, the Obama administration also proposed new rules that would improve blow-out preventers in wells, allowing them to be sealed more easily.

Despite these steps, significant concerns remain. And the legacy of Deepwater Horizon remains intensely controversial.

Only a few weeks ago, for instance, the U.S. National Wildlife Federation (NWF) released a report which looks at how 20 species of wildlife are faring in the Gulf of Mexico in the aftermath of the disaster. Among its assertions are that dolphins on the Louisiana coast were found dead at four times historic rates in 2014, and research suggests there may be other impacts as well on many species of marine life.

While the NWF’s study is not without critics, at least some evidence from other major spills indicates there can be a long-term impact on local ecosystems from oil spills.

In the absence of further major debacles in the near future, deep-water drilling will probably continue apace, driven in large part by continuing increases in global demand for energy that may only intensify in coming years if emerging markets continue to grow robustly.

The risks will remain right alongside.

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