Saturday, November 27, 2021

Colonial Pipeline Hack Reveals Weaknesses in US Cybersecurity

For years, government officials and industry executives have run elaborate simulations of a targeted cyberattack on the power grid or gas pipelines in the United States, imagining how the country would respond. But when the real, this-is-not-a-drill moment arrived, it didn’t look anything like the war games.

The attacker was not a terror group or a hostile state like Russia, China, or Iran, as assumed in the simulations. It was a criminal extortion ring. The goal was not to disrupt the economy by taking a pipeline offline but to hold corporate data for ransom.

The most visible effects — long lines of nervous motorists at gas stations — stemmed not from a government response but from a decision by the victim, Colonial Pipeline, which controls nearly half the gasoline, jet fuel, and diesel flowing along the East Coast, to turn off the spigot. It did so out of concern that the malware that had infected its back-office functions could make it difficult to bill for fuel delivered along the pipeline or even spread into the pipeline’s operating system.

What happened next was a vivid example of the difference between tabletop simulations and the cascade of consequences that can follow even a relatively unsophisticated attack. The aftereffects of the episode are still playing out. Still, some of the lessons are already clear and demonstrate how far the government and private industry have to go in preventing and dealing with cyberattacks and creating rapid backup systems for when critical infrastructure goes down.

In this case, the long-held belief that the pipeline’s operations were totally isolated from the data systems locked up by DarkSide, a ransomware gang believed to be operating out of Russia, turned out to be false. And the company’s decision to turn off the pipeline touched off a series of dominoes, including panic buying at the pumps and a quiet fear inside the government that the damage could spread quickly.

A confidential assessment prepared by the Energy and Homeland Security Departments found that the country could only afford another three to five days with the Colonial pipeline shut down before buses and other mass transit would have to limit operations because of a lack of diesel fuel. The report said that chemical factories and refinery operations would also shut down because there would be no way to distribute what they produced.

And while President Biden’s aides announced efforts to find alternative ways to haul gasoline and jet fuel up the East Coast, none were immediately in place. There was a shortage of truck drivers and of tanker cars for trains.

“Every fragility was exposed,” Dmitri Alperovitch, a co-founder of CrowdStrike, a cybersecurity firm, and now chairman of the think tank Silverado Policy Accelerator. “We learned a lot about what could go wrong. Unfortunately, so did our adversaries.”

The list of lessons is long. Colonial, a private company, may have thought it had an impermeable wall of protection, but it was easily breached. Even after it paid the extortionists nearly $5 million in digital currency to recover its data, the company found that the process of decrypting its data and turning the pipeline back on again was agonizingly slow, meaning it will still be days before the East Coast gets back to normal.

“This is not like flicking on a light switch,” Mr. Biden said Thursday, noting that the 5,500-mile pipeline had never before been shut down.

For the administration, the event proved a perilous week in crisis management. Mr. Biden told aides, one recalled, that nothing could wreak political damage faster than television images of gas lines and rising prices, with the inevitable comparison to Jimmy Carter’s worse moments as president.

Mr. Biden feared that, unless the pipeline resumed operations, panic receded and price gouging was nipped in the bud, the situation would feed concerns that the economic recovery is still fragile and that inflation is rising.

Beyond the flurry of actions to get oil moving on trucks, trains, and ships, Mr. Biden published a long-gestating executive order that, for the first time, seeks to mandate changes in cybersecurity. And he suggested that he was willing to take steps that the Obama administration hesitated to take during the 2016 election hacks — direct action to strike back at the attackers.

“We’re also going to pursue a measure to disrupt their ability to operate,” Mr. Biden said, a line that seemed to hint that United States Cyber Command, the military’s cyber warfare force, was being authorized to kick DarkSide offline, much as it did to another ransomware group in the fall ahead of the presidential election.

Hours later, the group’s internet sites went dark. By early Friday, DarkSide, and several other ransomware groups, including Babuk, which has hacked Washington D.C.’s police department, announced they were getting out of the game.

Darkside alluded to disruptive action by an unspecified law enforcement agency. However, it was not clear if that resulted from U.S. action or pressure from Russia ahead of Mr. Biden’s expected summit with President Vladimir V. Putin. And going quiet might simply have reflected a decision by the ransomware gang to frustrate retaliation efforts by shutting down its operations, perhaps temporarily.

The Pentagon’s Cyber Command referred questions to the National Security Council, which declined to comment. The episode underscored the emergence of a new “blended threat,” which may come from cybercriminals but is often tolerated and sometimes encouraged by a nation that sees the attacks as serving its interests. That is why Mr. Biden singled out Russia — not as the culprit, but as the government harboring more ransomware groups than any other country.

“We do not believe the Russian government was involved in this attack, but we do have strong reason to believe the criminals who made this attack are living in Russia,” Mr. Biden said. “We have been in direct communication with Moscow about the imperative for responsible countries to take action against these ransomware networks. With Darkside’s systems down, it is unclear how Mr. Biden’s administration would retaliate further, beyond possible indictments and sanctions, which have not deterred Russian cybercriminals before. Striking back with a cyberattack also carries its own risks of escalation.

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