US Power Grid Vulnerable To "Devastating" Attack, NERC Finds

Just as tensions between the US and North Korea are finally beginning to cool (while animosity between the US and Russia intensifies), a recent industry report argues the US government isn"t doing nearly enough to safeguard the US electric grid from a potentially devastating attack.

In its report, the North American Electric Reliability Corporation (NERC) revealed that much of the US electricity grid is vulnerable to attack - and neither the industry or the government are doing anything about it. NERC is the organization responsible for overseeing the US"s massive electric grid, which is subdivided into eight regional entities.

Though the report didn"t include a "comprehensive" assessment of the myriad physical threats to the US"s energy infrastructure, worries that North Korean could execute a massive electromagnetic pulse (or EMP) attack have been intensifying as the prospect of a nuclear showdown with the restive communist state looms large (Kim Jong Un"s recent actions aside). The research was also inspired by a series of gun attacks on transformers, including a rifle attack on a transformer in Utah that occurred in September 2016, according to the Washington Free Beacon.

Many organizations, including recently the National Academy of Sciences, have warned of the catastrophic consequences should a malicious actor - be it a state or a terrorist organization - manage to take down the US energy grid.

"There is widespread belief that bulk power critical assets are vulnerable to physical attack, that such an attack potentially could have catastrophic consequences, and that the risks of such attacks are growing," according to the report. "But the exact nature of such potential attacks and the capability of perpetrators to successfully execute them are uncertain."

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"Although the electric power sector seems to be moving in the overall direction of greater physical security for critical assets, many measures have yet to be implemented and the process of corporate realignment around physical security is still underway," according to the report, which omitted a comprehensive overview of all the pressing threats due to national security concerns.

"The September 2016 rifle attack on a 69 kV transformer substation in Utah—which reportedly left 13,000 rural customers without power for up to eight hours—showed that similar incidents could occur almost anywhere on the grid," the report warns.

To be sure, the Edison Electric Institute has highlighted the fact that it would be nearly impossible to completely secure the grid (the costs would be immeasurable). However, the US could be doing a lot more than it"s doing.

A massive attack on the US energy grid could leave large swaths of the country without power without weeks or months. The end result would resemble Puerto Rico following last year"s devastating hurricane season - but on a much larger and deadlier scale.

In this scenario, hundreds of thousands - if not millions of Americans - could die.

"While to date there have been only minor attacks on the power system in the United States, large-scale physical destruction of key parts of the power system by terrorists is a real danger," the academy warned. "Some physical attacks could cause disruption in system operations that last for weeks or months."

But unfortunately for the US citizens whose security is predicated on a functioning power grid, the power industry and US government have failed to organize a cohesive response to these threats. Because of the industry"s utter lack of preparation, even crude attacks could have devastating consequences.

And while this month"s volatility in equity markets was deeply unsettling for millions of Americans, imagine what would happen to markets if the entire Atlantic seaboard lost power in an instant.