Last week we were reminded of what Elliott Management's Paul Singer highlighted as the "one risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence" - an electromagnetic pulse (EMP). Specifically, we covered the release of an open letter written to President Obama on the country's concerning level of vulnerability to a natural or man-made EMP. What is stunning about the former CIA Director's comments below is not just the carnage an EMP could wreak, but the apparent rabid intransigence with which the electrical power lobby is fighting any responsibility for defending against one.
On Monday we covered the release of an open letter written to President Obama, issued by a committee of notable political, security and defense experts -- which includes past and present members of Congress, ambassadors, CIA directors, and others -- on the country's concerning level of vulnerability to a natural or man-made Electro-Magnetic Pulse (EMP).
An EMP has very real potential for crippling much of our electrical grid instantaneously. Not only would that immediately throw the social order into chaos, but the timeline to repair and restart the grid in most estimated scenarios would take months to a year or more. Those curious on learning exactly how devastating an EMP can be can read our report on the topic from last summer.
This week, we've been fortunate enough to get several of the authors of that open letter to join us and explain in depth what they conclude needs to be done to protect against the EMP risk: former CIA Director and current Ambassador James Woolsey, Executive Director of the EMP Task Force Dr Peter Pry, and security industry entrepreneur Jen Bawden.
What's frightening in this story is not just the carnage an EMP could wreak, but the apparent rabid intransigence with which the electrical power lobby is fighting any responsibility for defending against one:
Chris Martenson: Now, we’ve had a commission to assess the threat to the United States from an EMP attack, which delivered a report back in 2008. In fact, I found no less than two congressional commissions, a National Academy of Science report, other U.S. government sponsored studies, including your own. All have raised heightened concerns about this issue. All have found, all of them, that the EMP threat poses a significant and existential threat to the United States, and yet here we are still talking about this. Why is that?
Dr. Pry: Well, the short answer to that is it’s called the North American Electric Reliability Corporation. They used to be a trade association or a lobby for the 3,000 electric utilities that exist in this country. And, their relationship with the federal government, with the U.S. Federal Energy Regulatory Commission, is a 19th century-type relationship. There is no part of the U.S. government that has the legal powers to order them to protect the grid. This is unusual, because in the case of every other critical infrastructure, there’s an agency in the U.S. government that can require them to take actions for public safety. For example, the Food & Drug Administration can order certain medicines kept off shelves to protect the public safety. The Federal Aviation Administration can ground aircraft and require protective devices, put locks on aircraft doors, for example, to protect people from having the aircrafts hijacked by terrorists.The U.S. Federal Energy Regulatory Commission doesn’t have those legal powers or authorities.
And, the NERC, which owns half of K Street and has got very deep pockets, has been successful in lobbying against legislation like the Grid Act and the SHIELD Act, both bipartisan bills supported almost unanimously by Democrats and Republicans. They’ve been able to stall for years and keep these bills held up. One time when we got a bill passed: the Grid Act actually, in 2010, unanimously passed the House. Everybody supported it. But Washington is so broken, one senator put a hold on a bill—if they know which senator to buy, they can buy that one senator and the person can put a hold on the bill so it can’t come to the floor for a vote and they can do it anonymously. The senator doesn’t have to identify themselves. So, you never know who stopped the bill.
And, that’s been the problem in Washington. We’ve been trying to overcome resistance by the electric power lobby to try to protect the grid.
They’ve basically been successful in stymying efforts at the federal level. Now, we’ve got another bill, Critical Infrastructure Protection Act, that we’re hoping will pass this year. Again, we’ve got a lot of support, but it’s already under attack by the utilities. And, they’re trying to change the language of the bill to basically gut the bill.
Ambassador Woolsey: And, when NERC is studying a problem, it doesn’t exactly operate at breakneck speed. After the ’03 outage in Cleveland that started with a tree branch touching a power line and took out the electricity for several days of Eastern Canada and much of the northeastern United States, NERC was finally prevailed upon to do a study. And, they did one and focused entirely on how to cut tree branches so that they won’t interfere with electric power lines. And, that tree branch study took them three years and eight months. What’s interesting about that lapse of time is three years and eight months is exactly the amount of time the United States was engaged in World War II, from beginning to end. So, one wonders how many wars worth of time it would take NERC to deal with a more complicated problem such as say, squirrels.
Chris Martenson: I understand that NERC is against this and they think this is overbearing regulation and they don’t want to be more highly regulated. I think possibly understandable concerns from any industry, but in this case, what kind of money are we talking about here? How much would it take to really begin to remedy this issue and how much time would it take? What is NERC fighting here?
Dr. Pry: Sure. Interesting question, because there are different numbers, depending upon how much security you want to buy. One of my colleagues on the, who served on the EMP Commission, had a plan that would cost $200 million. That’s not billions, but millions with an ‘m’. Now, that would be a very minimalist plan, and it would just protect the extra high voltage transformers that service the major metropolitan areas. It would by no means—we would still be at a very high level of risk, but it would at least give us something like a fighting chance to save all those people in the big cities, in the hundred largest big cities from starving to death, if you just invested $200 million.
At this point, as I recently testified to Congress, I think the U.S. FERC is so broken and untrustworthy that we probably need to scrap the regulatory system we’ve got now and go to something completely different. I think what you’ve got is a situation of what’s called regulatory capture. You’ve got a rotating door between FERC and NERC and these guys are basically in cahoots with the electric power industry .
Click the play button below to listen to Chris' interview with Dr. Peter Pry, Jen Bawden, and Ambassador James Woolsey (48m:35s)