FPC Blog


Terrorism vs. Renewable Energy – A Game Theory Analysis

By:


Introduction

Sun Tzu said “To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.”

Imagine if a country decided that the number one impediment to its ambitions for power is America. But a direct attack is not yet possible. The longer view is required, patience is a virtue.

How do you win a war with America without fighting? Will the powerful U.S. military see it coming and rage against it? What is this unbeatable strategy that might take us down? In fact, the strategy goes back to ancient times, the same method alluded to above in Sun Tzu’s original work back in the 5th century BC. 

Psychology. In this sense, it means instilling fear, doubt, lack of confidence, dissent, weakness.

Psychology is a powerful tool, its methods for war include propaganda, terrorim (an attack but not a direct one, and designed for psychological impact), nefarious business methods (e.g.dumping), anonymous cyberattacks. 

Energy is wealth. And like every other kind of wealth, it is fought for by nations, coveted by and denied to enemies.  Americans have taken reliable energy for granted for several generations, it runs our society, provides heat, food, cars, houses, everything we own.  And Americans deep in their hearts realize that a lack of energy means chaos and loss of life on a nationwide scale. Lack of energy means no gasoline, no food shipments, no water, no heating or air conditioning, no job, no paycheck, and only two days worth of food in your refrigerator. We don’t panic at an temporary accidental outage, but a direct attack strikes fear in the hearts of men (and women, too!).    

See the connection?

Our goal is to study security threats to renewable energy, but without an understanding of the environmentals those threats are impossible to understand. 

This article provides a narrow focus to examine a specific type of risk: international asymmetric warfare, more commonly known as terrorism, targeting renewable energy infrastructure.  Keep in mind that we have seen relatively little terrorism in the U.S. since 9/11 and these considerations are not top of mind for most people. But we have serious adversaries in the world, and free societies are always the most vulnerable.

We will deliberately exclude discussions on cyberthreats and will not address issues specific to the oil and gas industry, concentrating instead on the physical threats to renewable sources. These threats represent just a piece of the complex risk puzzle endangering America’s power grid. As the grid expands and becomes more complex, the problem of security expands geometrically.

This analysis exemplifies the educational and advisory initiatives championed by the Financial Policy Council (FPC). The FPC (https://financialpolicycouncil.org/ ) is committed to delivering unfiltered insights and impartial assessments regarding the risks of terrorism and other significant threats confronting America. With a clear and determined approach, the FPC emphasizes the importance of addressing these critical issues, underscoring its dedication to promoting security and stability through informed policy recommendations.

A Game Theoretic Approach

This perspective is informed by my previous tenure at the Central Intelligence Agency, where part of my role involved working in counterterrorism. It should be noted that information and perspectives provided in this article are derived from unclassified work and my personal perspectives and contains nothing from the classified realm. 

This work has a slight bent toward game theoretical analysis, defining the adversary and the rules under which the topic is to be analyzed.  The resulting information becomes more clear and by “gaming” the estimates that we have made as new information comes in, we can prepare better for possible attacks.

The Adversary

To build our scenario, let’s choose an adversary, one that might exist if we knew how to look, we will call them the “XiComms” (after Chinese President “Xi” who is a “communist”).  Keep in mind that we are not at war at the moment, but as military planners will tell you, we must deal in “capabilities” and leave “intentions” to the politicians. 

Fact: Right now there are thousands of Chinese males of military age pouring across our borders.  Pockets of Chinese males of military age have been noted, conspicuous in their manner – their awareness of security in their travels is … military. These have been observed by U.S. ex-military in our contact network in Central America, who recognize their own species.

For the sake of our discussion, let’s assume our hypothetical  XiComms  are experts in guerrilla tactics, skilled in the art of asymmetric warfare. We’ll refer to them as terrorists in this context, not “insurgents” which typically implies they’re an extension of an official military force acting with government backing, nor “spies” since their main goal in this scenario isn’t to gather intelligence but to target and disrupt infrastructure. This fictional scenario serves as a backdrop analyze the threats posed by unconventional warfare tactics to national security within our limited frame.  

Other Possible Adversaries

It’s important to recognize that the threat landscape is not limited to just one type of group. 

Fact: on March 5, 2024, a far-left activist group named Vulkangruppe, or the “Volcano Group,” carried out an arson attack on the Tesla Gigafactory near Berlin.

Similarly, one could consider hypothetical far-right factions, modeled after individuals like Timothy McVeigh, the domestic terrorist who blew up a building in Oklahoma. It’s plausible to suggest that international actors like Russia and Iran could have operatives within the U.S., potentially leading to the formation of groups we might name ‘PutinSocs’ or ‘KhameneiRads,’ which could be state supported and working in tandem with or parallel to the aforementioned ‘XiComms.’

Additionally, organizations that stir significant public debate, such as BLM, Antifa, and La Raza, might be viewed by some as ‘terrorist adjacent,’ potentially acting as (perhaps inadvertent) allies to the XiComms.  There is certainly evidence these groups are susceptible to manipulation through tactics like bribery and extortion.

 For our purposes here we will call them the ‘amplifier groups’ since they would be used to (perhaps unwittingly) amplify the intended dissent and dissatisfaction through protest. This perspective opens a discussion on the complexity of internal and external threats and the myriad ways in which different groups might intersect or influence each other’s actions within a larger context of national security.

What are the adversaries after?

Again, the primary aim of terrorism is to impact psychological well-being rather than cause extensive physical damage –  fear, doubt, lack of confidence, dissent, weakness.

The underlying motive is strategic: instilling indecision and hesitation within the U.S. weakens its resolve to confront China’s interests in distant regions such as Taiwan, the Philippines, and Vietnam. This psychological leverage is seen as a significant advantage, justifying the efforts behind such tactics. The amplifier groups can be key in providing this leverage.

So what are the target areas with maximum psychological impact in the U.S.? 

  • Neighborhoods with lower income levels or those known for instability, e.g. 50 days of George Floyd riots in Portland
  • Places of worship, e.g. the Sutherland Springs Church shootings, killing 25
  • Social venues popular among groups with sensitive demographic characteristics, e.g. gay nightclub Pulse, killing 49
  • Transportation services used predominantly by these demographic groups
  • Major workplaces employing a significant number of individuals from these sensitive groups
  • Hospitals, schools, other places where people worry about family members.
  • Any other area with a history of protest where amplifier groups can arise

A significant strategy for the hypothetical group XiComm would be to maintain a substantial an active underground force within the U.S., always prepared to escalate their operations to create widespread distress and panic whenever necessary. For China, investing in such a capability would be considered valuable at any cost.

Analysis

The following categories of Reward and Risk for XiComm require evaluation in accordance with game theory analysis.

Psychological Impact: This considers the level of disturbance or unrest the public might experience due to an attack, and the susceptibility to the influence of amplifier groups. The less the impact, the less effective the attack is in causing widespread concern or disagreement.

Cost: This measures the financial impact of an attack relative to its execution cost and complexity. For instance, a simple act that causes significant financial damage is considered highly asymmetric and effective.

Repair Time: This assesses the duration required to restore services or repair damage, directly influencing the extent of public frustration or agitation. A longer repair time implies a more significant impact.

Difficulty of Attack: This evaluates the risks and planning involved in executing an attack. The greater the difficulty, the more resources and risk are associated with the attack, indicating a higher investment by the XiComm group.

Low/High Profile: This gauges the likelihood of an attack being directly linked to the XiComms as opposed to being attributed to an individual acting alone or an accident. Higher visibility increases the risk to the XiComms.

Our assessment of these factors is based on subjective judgment, though it’s informed by a degree of expertise. A “Reward/Risk” column is introduced to highlight tactics that seem more likely to be successful and impactful. This involves adding up the estimated impact factors and dividing by the total of the risk factors. While this is perhaps not as rigorous as it could be, it seems to show the most likely attack scenarios.

Types of attacks

These examples, while not exhaustive, represent typical physical attacks that could be executed under the scenario where the hypothetical group XiComm has access to funds and information but must keep a low profile and does not have access to military-grade equipment. They would rely on materials readily available within American society.

Explosives: Potential methods might include dynamite, licensed small quantities for agricultural or industrial purposes, blasting caps, or a diesel/fertilizer mixture for larger blasts. Crafting such devices is risky and clearly indicates terrorism, potentially generating terror but risking exposure and signaling escalation. We assume the XiComms would be trained for such specialized attacks.

Arson: A relatively simple tactic involving the purchase of gasoline or diesel, which is then spread and ignited from a distance. The main risks include proximity to the target and the challenge of transporting sufficient fuel, but are unlikely to be associated with state sponsored terrorism.

Cut Cables: This involves using cable cutters to cause damage quickly. While cables are easily severed and can lead to temporary service disruptions, they are also inexpensive and quick to repair. Effective when in direct coordination with amplifier groups to take advantage of short term hardships.

Truck/Heavy Machinery Crash: This strategy entails commandeering a large vehicle to ram into costly infrastructure. Such an approach can breach perimeters like chain-link fences to target substations or utility batteries. However, it’s unlikely to damage robust structures like wind turbine posts. In solar farms, a vehicle could potentially cause extensive damage before detection. Importantly, since the XiComms are not envisioned as suicide attackers, they would need to employ this method without endangering themselves.

Rifle Round: With a cost of around $3 per .50 BMG cartridge, this type of ammunition can penetrate steel plates up to 1.5 inches thick (depending on the alloy). This method allows for attacks from a significant distance while remaining concealed.

These methods highlight the practical and risk considerations involved in selecting attack modes, emphasizing the need for strategic planning and execution.

Analysis of Possible Attacks on Renewable Energy

Solar Farms: Solar energy installations, especially on a large scale, present a unique challenge for potential sabotage due to their sprawling nature. The effectiveness of an attack can vary significantly depending on the installation’s design and wiring. For example, a rifle shot might only damage a single panel, and a heavy and powerful vehicle driven through the installation could potentially destroy panels across 2 or 3 acres out of hundreds or thousands, making such efforts largely superficial. Similarly, cutting cables might not lead to significant disruptions given the extensive layout. 

Despite the relative ease of executing these attacks due to security challenges over such a vast area, their impact would likely be minimal. Arson could become a greater threat if the surrounding vegetation is dry. While the use of explosives might cause public alarm, they are generally not considered effective in causing substantial damage to solar farms.

Wind Farms: When discussing large-scale wind farms, we’re looking at a significantly smaller number of units compared to solar farms, with a wind farm typically housing between a dozen and a hundred turbines. Our analysis suggests that .50 caliber ammunition, readily available and effective to those who know where to aim, could potentially breach the protective casing of a wind turbine, damaging or disabling the generator inside. This assumes that the attackers, in this scenario the hypothetical XiComms, have access to detailed schematics of the turbines (well within their capability). It is important to note that we have not consulted with wind turbine manufacturers, who are presumably cognizant of these vulnerabilities and may already be taking steps to mitigate such asymmetric risks. 

Arson appears to be impractical for attacking wind turbines. Similarly, it’s believed that a truck, even one carrying explosives, would likely fail to topple a large scale turbine. A successful explosive attack would require a considerable amount of explosives, presenting logistical challenges in both transport and deployment. 

A series of such attacks could raise the financial risk of wind generation to unacceptable levels, which could seriously disrupt the deployment of renewable energy in the U.S. While this action may not provoke the dissent and dissatisfaction previously discussed, it could serve as an effective measure in industrial espionage, a tactic that is not beyond consideration by China.

Geothermal Energy: For our purposes, we will address large-scale geothermal plants, which, unlike residential units, might seem like potential targets for terrorism. However, for a group like the fictional XiComms, large-scale geothermal facilities offer limited strategic value as targets. These plants are located over natural geothermal reserves and typically do not serve populations that terrorists aim to impact. Amplifier groups would be difficult to rouse, and even a note in the local paper might be hard to come by. Attacks using rifles or vehicles would likely result in only superficial damage to the plant’s external infrastructure, without affecting its core operations.

A significant explosive attack, akin to the scale used by Timothy McVeigh, could potentially cause considerable damage. However, the extensive planning, high risk, and increased visibility such an operation would entail make it an unlikely choice for the XiComms. Moreover, as mentioned above, the psychological impact of attacking a geothermal plant is deemed minimal, given their typically remote locations, further diminishing their attractiveness as targets.

Hydroelectric Dams: The United States is home to over 2,500 hydroelectric plants, with capacities ranging from quite small to several gigawatts. In discussing potential threats, we’ll focus exclusively on physical attacks, setting aside biological/chemical threats—though notably alarming, they fall outside the renewable energy domain—and cyberattacks, which are beyond the scope of this analysis.

According to a 2019 source, the U.S. has not experienced a significant attack on its water resources or dams. Yet, it’s concerning that more than 1,600 dams are reported to be in a state of disrepair. This analysis does not include a detailed chart for hydroelectric power because large dams, which would cause extreme psychological impact if compromised, are generally too massive for low-profile terrorist activities. Nonetheless, it’s worth noting that among the 1,600 dams deemed vulnerable, there could potentially be accessible targets for those willing to conduct thorough research.

Batteries: As solar and wind energy sites increasingly incorporate utility-scale batteries from various manufacturers, the potential impacts of an attack can vary significantly based on the battery chemistry. A rifle shot, for example, might result in a minor leak of harmless liquid in batteries using iron chemistry. In contrast, those with molten sodium chemistry could necessitate extensive cleanup efforts due to hazardous waste creation. Attacks on batteries made from materials like lithium and vanadium pose varying degrees of risk to human health.

To date, there appears to be a lack of research on the effects of significant terrorist attacks on utility-scale batteries. For the purposes of our discussion, we’re assuming the worst-case scenario: a battery is completely destroyed, leading to considerable cleanup costs. We also speculate that such destruction would disrupt the consistent power supply from renewable sources, causing sustained daily blackouts. It’s important to note that part of the psychological impact of an attack involving explosives might stem from the misconception that the battery itself was the source of the explosion. 

A series of such attacks would likely cause extreme cases of “not in my backyard” (NIMBY) syndrome, which could seriously disrupt the deployment of renewable energy in the U.S. While this may not cause the dissent and dissatisfaction we spoke of earlier, it could be effective as an act of industrial espionage, an act that China is not above.

Transformers/Substations – Every renewable energy source must be connected to the grid through a substation containing large transformers to handle all of the power.  This equipment is expensive and difficult to replace, especially at the scale needed to connect to a wind or solar farm. This risk is the subject of the documentary Grid Down Power Up, narrated by Dennis Quaid (linked in the source section)

In the event that our fictional XiComms are asked to elevate their activities and move from low profile terrorists to military insurgents, transformers and substations will like be primary targets.  Given the hypothetical size of the XiComm organization, they can be taken out by the tens of thousands, plunging DC, New York and other major cities into a terrified darkness.  As to this the amplifier groups, that will be active immediately, this could be months of chaos, disruption, riots, food shortages and more in America.

Results

The charts illustrate that wind turbines, batteries, and substations emerge as the prime targets due to their vulnerability to maximum damage with relatively low risk for attackers, especially given the extended range and destructive force of a rifle, allowing the attacker to destroy at a safer distance.

Substations represent an attractive target and a substantial vulnerability because of their ubiquity in the grid. The key impact of attacking a substation lies not in the physical destruction itself but in the immediate power outages it causes, plunging entire areas into darkness. They can be compromised through various means such as rifle shots, improvised explosives, wire cutting, and arson, each causing disproportionate damage. However, it’s important to note that this vulnerability is not exclusive to renewable energy sources but affects the entire power grid. And at present, these attacks are easy.

Another apparent vulnerability is the potential targeting of large wind turbines with a high-powered rifle which could result in prolonged power outages, entail millions in repair costs, and potentially threaten the viability of the wind energy sector. While the financial implications are significant, the psychological impact of such attacks might be less apparent compared to the immediate fear caused by sudden power losses. Renewable energy proponents would likely be the most affected psychologically by such incidents, and whose dissatisfaction would be most vocal.

Utility-scale batteries also present potential weak points that could be exploited. An attack that leads to a hazardous situation could trigger public opposition, leading to a “not in my backyard” response. This could severely damage the reputation and operational sustainability of the affected company.

Recommendations

The glaring vulnerability for renewable and every other form of electricity generation is the transformer/substation. There’s a growing consensus on the need to stockpile substation equipment and enhance security measures to prevent attacks. Implementing these strategies even to the extent of $10s of billions, is seen as cost-effective when compared to the potential fallout from widespread attacks, particularly as our hypothetical terrorists, the XiComms, shift from covert operations to overt actions aimed at disrupting American society.

Wind turbines, given their visibility and lack of surrounding concealment, are susceptible to long range attacks. A simple, readily available rifle could potentially disable a multimillion-dollar turbine from a safe distance, posing little risk to the assailant. This vulnerability may already be recognized within the industry, with possible mitigations underway.  Nevertheless, protective measures against such threats must be considered essential to the wind generation industry.

It is recommended that the Department of Homeland Security evaluate the resilience of various utility-scale batteries and share its findings with the industry. Rational Energy’s batteries have a layout that maximizes the protection of critical battery components, ensuring they are safeguarded against significant damage, service interruptions, or risk to human health. Other batteries need such an analysis and more. 

Deregulation

In the long term, the grid is still hierarchical, it needs to be decentralized and deregulated. There’s a push for decentralization and deregulation to allow small-scale providers to connect and profit without navigating the cumbersome and costly bureaucracy of today’s grid system. Envisioning a grid composed of independent “cells,” where each segment serves a smaller customer base, could enhance overall resilience and robustness. In such a system, attacks on substations or major generators would be less catastrophic, affecting fewer people, and would be less likely to cascade into major outages.  Even a major military attack on infrastructure would leave most areas with independent power.

The challenge lies in convincing  our political leadership and those who manage the existing grid to embrace the addition of independent segments and to foster a competitive market environment. This concept parallels the transformation experienced by the Bell Telephone Company and AT&T, which paved the way for the internet and the vastly improved telecommunications infrastructure we rely on today.

The Financial Policy Council (FPC) recognizes the paramount importance of safeguarding America’s renewable energy infrastructure from the perils of terrorism. As a steadfast advocate for our nation’s energy security, the FPC leverages the unparalleled expertise of its members, many of whom have dedicated their careers to fortifying the resilience of our critical infrastructure. By bringing together luminaries from the realms of national security, energy, and finance, the FPC fosters a collaborative environment where innovative solutions can be forged to address the complex challenges posed by asymmetric threats. Through meticulous fact-finding and a commitment to intellectual rigor, the FPC aims to develop policy recommendations that not only enhance the physical security of our renewable energy assets but also bolster the economic viability of this vital sector. In doing so, the FPC seeks to contribute to a more secure, prosperous, and energy-independent future for all Americans, exemplifying the highest ideals of patriotism and service to our great nation.

Conclusion

This analysis exemplifies the educational and advisory initiatives championed by the Financial Policy Council (FPC). As a non-partisan organization dedicated to promoting financial stability and economic security, the FPC harnesses the collective expertise of its members to deliver unfiltered insights and impartial assessments regarding the risks of terrorism and other significant threats confronting America. Through rigorous fact-finding and a commitment to truth, the FPC seeks to inform policymakers and the public alike, empowering them to make decisions that safeguard our nation’s interests. With a clear and determined approach, the FPC emphasizes the importance of addressing these critical issues head-on, drawing upon the diverse knowledge and experience of its members across various silos, from national security to energy infrastructure. This multidisciplinary perspective underscores the FPC’s dedication to promoting security and stability through informed policy recommendations, reinforcing its role as a bulwark of economic patriotism.

The energy grid in the U.S. is a marvel of engineering that has evolved into a sprawling but highly effective continuous source of power for America. The addition of renewable energy provides the opportunity for robustness and resilience but also extends the range of difficulty in defending it.  

The industry was never intended to have to defend itself against determined attackers and these new requirements have made it difficult.  From a terrorist’s point of view, we conclude that attacks are easy, safe, scalable and highly effective in both cost damage and psychological damage to America.  To mitigate the latter, it should be considered that a more cellularized structure be considered for the grid. 

It is also apparent that in addition to the psychological goals of terror, attacks can be wielded as tools of industrial espionage to harm entire industries by exposing and publicizing weaknesses.  It is a simple fact, that competitive countries such as China, have no compunction about such campaigns that may enhance the marketability of their own equipment.  It is concluded that the low profile terrorist scenario contained herein could do so successfully.

#RenewableEnergySecurityhreats   #EnergyInfrastructureResilience   #AsymmetricWarfare   #TerroristGameTheory   #CybersecurityForTheGrid   #SafeguardingAmericasGrid

References

Grid Down Power Up

https://www.youtube.com/watch?v=1kErOyJ0u-8

https://www.msn.com/en-us/news/world/power-restored-at-tesla-gigafactory-after-far-left-activist-sabotage/ar-BB1jKIt0

50 Caliber Penetration Tests

https://www.youtube.com/watch?v=_3ygggjzf-c

https://www.youtube.com/watch?v=x_TZkLaTVq4

https://www.youtube.com/watch?v=bwmwxo3iMAs

https://www.youtube.com/watch?v=kWnMw3SsxKs

https://pv-magazine-usa.com/2024/03/07/a-look-at-the-great-transformer-shortage-affecting-u-s-utilities/

https://damfailures.org/wp-content/uploads/2019/04/SHANNON-ALEXANDER-USSD-2017-Conference-Paper.pdf

https://apnews.com/article/ne-state-wire-us-news-ap-top-news-sc-state-wire-dams-f5f09a300d394900a1a88362238dbf77

https://www.opb.org/news/article/police-violence-portland-protest-federal-officers/

https://en.wikipedia.org/wiki/Sutherland_Springs_church_shooting

https://en.wikipedia.org/wiki/Pulse_nightclub_shooting

Categories:
Tagged: