Cybersecurity is top of mind for in-house counsel in a number of different industries, ranging from social media to retailers to even states themselves. However, one industry is beginning to look with an even harsher eye towards its current data security laws: the energy industry.
According to a study from consulting, construction and engineering firm Black & Veatch, “2014 Strategic Directions: U.S. Electric Industry,” cybersecurity has become one of energy companies’ top five concerns for the first time. After ranking sixth one year ago and not being in the top 10 in 2012, cybersecurity is now the surveyed companies’ fourth-largest concern, behind reliability, environmental regulation and economic regulation.
“The industry is paying attention and actively seeking ways to bolster security practices to limit power system vulnerability,” says the report. “We are seeing an industry that is actively moving forward with the deployment of comprehensive asset protection plans following several high-profile cyber and physical threat events.”
However, despite this growing concern about cybersecurity issues, many energy companies feel they do not have an adequate handle on protecting private data. Just 32 percent of the electric utilities surveyed had implemented security systems with the “proper segmentation, monitoring and redundancies” for cybersecurity, while 48 percent had not.
No matter the industry, writes U.S. Steel general counsel Suzanne Rich Folsom in the August 2014 issue of InsideCounsel, cybersecurity should be top-of-mind for in-house counsel. “Make no mistake, the compliance challenges arising from data breaches and other cyber incidents are not limited to industries that, like retail and financial, garner the most conspicuous publicity for events that so directly affect the public,” Folsom says. “[F]ar too few companies of any sort are investing in comprehensive compliance, training and monitoring programs to protect against cyberthreats.”
Among the other findings in the report is a growing shift towards natural gas. 50 percent of the survey’s respondents said that their company will be replacing retiring coal and nuclear energy plants with natural gas generation. Natural gas was also cited as the preferred backup for renewable energy initiatives.