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Here Are The Clever Means Russia Used To Hack The Energy Industry

James Conca
This article is more than 2 years old.

Last July, officials from the Federal Bureau of Investigation and the Department of Homeland Security revealed that Russian hackers were behind cyber intrusions into the U.S. energy power grid. The intrusion illustrated the severe threat that hackers pose to our most critical industries - energy, finance, healthcare, manufacturing and transportation.

The DHS and FBI downplayed the danger in a joint statement: "There is no indication of a threat to public safety, as any potential impact appears to be limited to administrative and business networks."

But that might not be the end of it. Russia may be laying the groundwork for more damaging hacks, on America as well as other nations, using new cyber weapons like CrashOverride and BlackEnergy 3.

In 2015, Russia tested this on the Ukrainian capital of Kiev. These tools were specifically developed to disrupt electric power grids and it blacked out 225,000 people in the Ukraine.

One might wonder what is Russia’s end game for this kind of attack. To hurt us financially? To show us how vulnerable we are? In preparation for a more sinister attack?

Is it to punish America for anti-Russian policies? The White House expelled 60 Russians from the United States this week, joining western allies in response to Russia’s poisoning of a former Russian spy in Britain with what was a banned chemical weapon.


When DHS and FBI dissected the hackers’ tradecraft, it turned out to be very clever indeed. Mark Orlando, Chief Technology Officer for cyber services at Raytheon, broke down the particulars of why the new world of hacking works so well in America.

One of the attackers' main strategies is to divide targets into two groups - intended targets which are the energy companies themselves, and staging targets like vendors, suppliers, even trade journals and industry websites.

Instead of going straight to the larger and better-protected targets, like a $60 billion energy company with a cyber security department, the hackers worked their way into the smaller and less secure companies' networks like those that supply the big ones with smaller equipment. Or the local utilities that are partnered with them. Local regulators may also have good access.

There is even an Electric Utility Industry Sustainable Supply Chain Alliance that many of the large energy companies use.

When the hackers get into those systems, they use that access to gather intelligence and set traps for the larger company.

This targeting of the supply chain partners is brilliant. The manufacturer of natural gas turbines that supply a gas power plant would have great access to the plant’s systems and management, would probably have password access, and would not be questioned very hard.

‘It’s important to raise awareness,’ says Orlando. ‘These details, if taken by themselves, might not seem that impactful. When presented with the entire story, we can see it was part of a larger, sustained campaign, potentially causing a lot of damage.’

This is a long-term strategy that takes patience – just the kind of thing traditional espionage has perfected over the last century.

America seems to be getting the message. A recent survey from Raytheon and Ponemon showed that two-thirds of cyber security executives and chief information security officers in America, Europe and the Middle East believe cyber extortion, such as ransomware and data breaches, will increase in frequency and payout.

The traps themselves are pretty imaginative. Many are based in social media. No one would suspect a cute kitten video of hiding malware. But they do. And if your co-worker is a kitten-nut, they may not hesitate to download that video without thinking that it is a trap.

Rupert’s Cat Pics

‘The weakness in cybersecurity are the users themselves, those that are not necessarily computer-savvy,’ says Quinn Mockler, a young cyber security researcher at Columbia Basin College in the Tri-Cities Washington near the Hanford Nuclear Reservation. ‘People overall need better awareness of cyber security. Otherwise, we will be open to constant attack.’

In one example discussed by Orlando, the attackers found a harmless-looking photo on one company’s human resources site that contained valuable information - the manufacturer and model of a certain piece of control-systems equipment.

That provided critical information on how the plant runs and set up the next phase of the attack - spear phishing – which is the use of customized, highly deceptive emails designed to deliver malware. Using resumés, curricula vitae, policy documents and other common messages, the hackers made reference to these control systems creating plausible, well-informed emails likely to fool someone into opening a malware-laced attachment.

One was an invitation to a company New Year’s Eve party.

Another common method used to infiltrate is called a watering-hole attack which plants malicious code in a place the targets trust, then waits for them to come pick it up.

In the energy-sector attack, DHS and FBI found that watering holes included trade publications and informational websites that dealt with matters specific to the energy industry. The hackers corrupted those sites and altered them to contain malicious content. The targets saw no reason to suspect anything was wrong when they visited them.


‘It’s a low-complexity, low-effort, high-yield attack,’ Orlando says. ‘With relatively little effort, you can target lots and lots of users.’ The best defense, he says, is for a company to monitor its own networks for signs that a user may have unwittingly stumbled into a watering-hole.

Much of the malware in the energy-sector attack was designed to capture user credentials, or the digital identity of someone authorized to use a target network. Credential harvesting includes usernames and passwords, hashes or a computer’s digital signature, often stolen through tricking someone at a false login page for a familiar site.

The hackers’ spear phishing emails contained documents that ordered the target's computer to retrieve data from a server – one the hackers either owned themselves, or had commandeered. Once the hackers had the target’s credentials, they could apply techniques to reveal the password in plain text.

Requiring multiple modes of authentication to sign in, such as a thumbprint or a security token code, is the best way to thwart this type of attack.

Hackers imitated login pages themselves, planting a link that redirected users to a page whose ‘username’ and ‘password’ fields fed credentials straight to them. Orlando notes, ‘If I can come into your environment using authorized credentials, detecting that just became exponentially more difficult.’

There are two main lessons from the power-grid hack, Orlando says. First, businesses should know that small hacking attempts like suspicious emails are often part of a larger campaign. Also, they should understand that truly cyber-secure businesses look beyond their own networks. Like tracking the spread of a new Flu virus.

‘Your network isn’t just your network. It’s your network, plus your trusted partners, plus your suppliers,’ he says. ‘If you’re not mitigating risk across the entire cyber ecosystem, you’re potentially missing a very large exposure to your business.’

Since smaller companies are the hacker's first stop on the way to the bigger targets, Orlando recommends monitoring computer networks for unusual activity, installing security patches regularly, developing a response plan to disclose breaches and limit damage, and communicate up and down the supply chain on cyber security.

Data diodes, air gaps, field programmable gate arrays – all the sophisticated approaches to cyber security that the nuclear and defense industries use – eventually need to be part of everyone’s defense.

But as Orlando summed up, the daunting new reality in modern cyber security is that a company's cyber defenses are only as strong as the defenses of everyone connected to it.

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