At least five separate U.S. pipeline companies have been forced to shut down their communications systems or have suffered downtime after an outside company used by them was compromised in the latest attack on the energy industry.

The hack targeted Latitude Technologies Inc., a division of Energy Services Group LLC, a private equity-owned company that provides business process solutions for energy firms in 22 U.S. states as well as clients in Canada and Japan.

Pipeline companies that shut down their communications systems as a precaution against malware likely used in the hack include Duke Energy Corp., Energy Transfer Partners LP, Boardwalk Pipeline Partners LP, Chesapeake Utilities Corp.’s Eastern Shore Natural Gas and the Portland Natural Gas Transmission System, owned by TransCanada Corp.

The form of the hack has not been disclosed. Energy Services told Bloomberg that as of Wednesday its systems are back up. “We are now completing testing and system validation to bring all customers back into safe and secure operation,” the company said.

The attack could have led to far worse outcomes, given that ESG’s systems are said to include tracking and scheduling of gas flows in pipelines, as well as energy demand tracking.

“If ESG has been taken offline by a cyberattack, then whatever cybersecurity investment they made has, regrettably, proven to be insufficient,” Andrew Lloyd, president of Corero Network Security Inc., told SC Magazine. “The lesson is clear: if you’ve moved your business-critical operations to the internet, then you’re going to need to have adequate cybersecurity defenses to ensure resilience.”

Tom Kellermann, chief cybersecurity officer at Carbon Black Inc., noted that the energy sector is vulnerable to risk in part because of its reliance on internet-facing networks and, in many cases, outdated technology.

“Energy exchangers are single points of failure for command and control of our grid,” Kellermann said. “The sector must adopt a comprehensive approach to cybersecurity, one that incorporates prediction, prevention, detection and response to attempted attacks.”

Photo: Geograph.ie