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Let’s not replicate NERC CIP’s problems for pipelines.

Tom Alrich's picture
Tom Alrich 36722
Supply chain Cybersecurity Risk Management and NERC CIP-013 consulting Tom Alrich LLC

Currently with Tom Alrich LLC, I provide strategy and compliance consulting to electric power industry clients and vendors to the power industry, focusing on the NERC CIP cybersecurity standards....

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  • Jan 24, 2022
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I’m thinking of renaming this “Mariam Baksh’s Blog”, since once again the NextGov reporter has written a really interesting story on cyber goings-on in Washington (my last post was based on one of her articles, and I’ve written a few others before that). Mariam isn’t the kind of reporter whose goal is to write the best story about something that everybody else is also writing about. Instead, she is constantly digging up interesting stories where I would have never even dreamed to look.

The story this time is an outgrowth of the Colonial Pipeline attack. Once the TSA issued a cyber directive to the pipeline industry a few months after the attack, most reporters assumed the problems were solved. After all, you solve cyber problems with regulations, right?

I might have assumed the same thing, except a kind person sent me a redacted[i] copy of the directive, which I wrote about in this post. What did I think of the directive? Well, I thought the font it was written in was attractive, but it was all downhill from there. However, I have found a great use for the directive: In February, I’ve been invited to speak on cyber regulation for a seminar at Case Western Reserve University. At first, I was going to talk about lessons learned from various compliance regimes: NERC CIP (which I know most about), PCI, HIPAA, CMMC, etc. But after reviewing my post on the TSA directive, I realized I hit the gold mine in that one: Just about everything the TSA could have done wrong, they did. They should stick to telling people to take their shoes off in airports. It’s the perfect pedagogical example of how not to develop cybersecurity regulations!

And maybe they will, since Mariam’s article points out that Rep. Bobby Rush[ii] of Illinois has introduced legislation that would take the job of cyber regulation for pipelines away from the TSA and vest it in a new “Energy Product Reliability Organization”. This would be modeled on the North American Electric Reliability Corporation (NERC), which develops and audits reliability standards for the North American electric power industry, under the supervision of the Federal Energy Regulatory Commission (FERC). NERC is referred to as the “Electric Reliability Organization” in the Electric Power Act of 2005, which set up this unusual regulatory structure.

The best known of NERC’s standards are the 12 cybersecurity standards in the CIP family. And clearly, these standards have a good reputation on Capitol Hill. This was reinforced by FERC Chairman Richard Glick’s testimony at a hearing on Wednesday, when he was asked by Rep. Frank Pallone, “…do you think that the industry led stakeholder process established by Chairman Rush's legislation would likewise be a successful mechanism for protecting the reliability of the oil and gas infrastructure?” Glick replied, “I believe so. The electricity model has worked very well … and I believe a similar model will work with pipeline reliability.”

I don’t deny that the NERC CIP standards have made the North American electric grid much more secure than it would be without the standards. On the other hand, there are some serious problems with the CIP compliance regime, which I wouldn’t want to see replicated for the pipeline industry:

  1. The standards should be risk-based, like CIP-013, CIP-012, CIP-003 R2, CIP-010 R4 and CIP-011 R1. This means they should not prescribe particular actions. Instead, they should require the entity to develop a plan to manage the risks posed by a certain set of threats - e.g. supply chain cyber threats or threats due to software vulnerabilities. Then the entity needs to implement that plan. In drawing up the plan, it should be up to the entity to decide the best way to manage the risks, but there will be a single set of approved guidelines for what should be in the plan (something that is missing with CIP-013). Prescriptive requirements, like CIP-007 R2 and CIP-010 R1, are tremendously expensive to comply with, relative to the risk that is mitigated. Explicitly risk-based requirements are much more efficient, and are probably more effective, since the entity doesn’t have to spend so much money and time on activities that do very little to improve security.
  2. Auditing should be based on how well the plan followed the guidelines. Of course, this isn’t the up-or-down, black-or-white criterion that some people (including some NERC CIP auditors, although I believe that sort of thinking is disappearing, thank goodness) think should be the basis for all auditing. If an entity has missed something in the guidelines, but it seems to be an honest mistake, the auditor should work with them to correct the problem (in fact, the auditor should work with them in advance to make sure the plan is good to begin with. This is currently not officially allowed under NERC, due to the supposed risk to “auditor independence”, a term that’s found nowhere in the NERC Rules of Procedure or GAGAS).
  3. In other words, auditors should be partners. They actually are partners nowadays, but when they do this, they’re officially violating the rules – and note that they’ll still never write down any compliance advice they may give and they’ll always say it’s their personal opinion - meaning you can’t count on the next auditor saying the same thing).
  4. Auditing should also be based on how well the plan was implemented. This is where I think auditing actually should be black & white. Once the entity has created the plan, they need to follow it. If they decide something needs to be changed, they should change the plan and document why they made the change. But they shouldn’t just deviate from the plan as it’s currently written (I believe this is how CIP-013 is audited, as far as I know. The entity can make a change to the plan whenever they want, but they need to document the change, and then follow it).
  5. Identification of new risks to address in the standards needs to be divorced from the standards development process. When a new area of risk is identified as important, entities should immediately be required to develop a plan to mitigate those risks and follow that plan – this shouldn’t wait literally years for a new standard to be developed and implemented.
  6. NERC standards development proceeds in geologic time – and because of that, a number of important areas of cyber risk have never been addressed by CIP, since nobody wants to go through the process of developing a new standard. For example, where are the CIP standards that address ransomware, phishing, and APTs? These risks have been around for at least a decade, yet a new standard has never even been proposed for any of them, let alone written. And how long does it take for a new standard to appear after the risk first appears? The risk caused by use of “visiting” laptops on corporate networks has been well known since the late 1990s. When did a requirement for “Transient Cyber Assets” take affect? 2017.
  7. There needs to be a representative body – with representatives from industry stakeholders, the regulators, and perhaps even Congress and the general public – that meets maybe twice a year to identify important new risks that have arisen, as well as to identify risks that are no longer serious. If the body decides a new risk needs to be addressed, a new standard should be created, the mechanics of which would be exactly the same as in the other standards. Only the name of the risk and the guidelines for the plan would differ from one standard to another. So no new requirements need to be developed.
  8. The unit of compliance for the standards shouldn’t be a device (physical or virtual) – specifically, a Cyber Asset, as it is in the current CIP standards. Instead, it should be a system. As I have pointed out several times before, putting BES Cyber Systems in the cloud (e.g. outsourced SCADA) is now impossible, since doing so would put the entity in violation of twenty or so CIP requirements – simply because they would never be able to furnish the evidence required for compliance. Basing the standards on systems (and a BCS is defined just as an aggregation of devices, nothing more) would allow cloud-based systems, containers, and more to be in scope for CIP.

So I wish the new Energy Product Reliability Organization good luck. I think having stakeholder involvement is crucial to having successful cyber standards for critical infrastructure. But don’t spoil it all by not taking account of the lessons learned from the NERC CIP experience.

Any opinions expressed in this blog post are strictly mine and are not necessarily shared by any of the clients of Tom Alrich LLC. Nor are they necessarily shared by CISA’s Software Component Transparency Initiative, for which I volunteer as co-leader of the Energy SBOM Proof of Concept. If you would like to comment on what you have read here, I would love to hear from you. Please email me at tom@tomalrich.com.


[i] Making the directive secret was ridiculous, and almost by itself guaranteed it would fail, as I discussed in my post on the directive. But just for good measure (and to make sure that there was no possibility at all that the directive would succeed), the TSA violated just about every other principle of good cybersecurity standards development.

[ii] Rush just recently announced his retirement, after 30 years representing Chicago’s 1st Congressional District in the House. He served well and happens to be the only person who ever beat Barack Obama in an election (Obama challenged him for his House seat in 2000). He was a co-founder (with Fred Hampton) of the Illinois branch of the Black Panther party in 1968.

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Richard Brooks's picture
Richard Brooks on Jan 24, 2022

Cybersecurity concerns have resulted in a virtual feeding frenzy among regulators. Regulators at Federal and State levels are joining the frenzy with each one defining their own set of cybersecurity regulations, with the FERC NOPR serving as living proof. The FERC NOPR calls for NERC to define cybersecurity standards for anti-virus scanning, which has been a best practice for over 20 years by anyone following NIST cybersecurity guidelines, which many already do. FERC, NERC, SEC, FTC, PUC's and other regulators are working on their own set of cybersecurity regulations. It's conceivable that a single Electric Utility (IOU) could be expected to comply with 3 or more different cybersecurity regulations, from each of the regulators with jurisdiction over them.

It's time to stop the frenzy and establish one set of cybersecurity best practices defined by our Nation's cybersecurity experts at CISA/NIST. Regulators could avoid burdensome and redundant cybersecurity regulation by simply pointing to the CISA/NIST best practices as their adopted cybersecurity policies. This will eliminate any confusion, and unnecessary paperwork that comes with having multiple regulators "in charge of cybersecurity", each with their own cybersecurity regulations and compliance requirements.

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