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China could rule world’s technology, UK cyber spy chief says

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By Guy Faulconbridge

LONDON (Reuters) -The West must urgently act to ensure China does not dominate important emerging technologies and gain control of the “global operating system”, Britain’s top cyber spy said on Friday.

In an unusually blunt speech, Jeremy Fleming, director of the GCHQ spy agency, said the West faced a battle for control of technologies such as artificial intelligence, synthetic biology and genetics.

“Significant technology leadership is moving East,” Fleming said at Imperial College London. “The concern is that China’s size and technological weight means that it has the potential to control the global operating system.”

“We are now facing a moment of reckoning,” he said.

World powers will compete to shape the future by developing the best technology, hiring the people with the best brains and dominating the global standards that will govern the technologies, Fleming said.

GCHQ, which gathers communications from around the world to identify and disrupt threats to Britain, has a close relationship with the U.S. National Security Agency and with the eavesdropping agencies of Australia, Canada and New Zealand in a consortium called “Five Eyes”.

Fleming said that if Britain wished to remain a global cyber power then it would have to develop “sovereign” quantum technologies, including cryptographic technologies, to protect sensitive information and capabilities.

Fleming said quantum computing, which uses the phenomena of quantum mechanics to deliver a leap forward in computation, was getting closer and posed huge opportunities but also risks.

The West should forge ahead with developing quantum-proof algorithms, he said, “so we’re also prepared for those adversaries who might use a quantum computer to look back at things that we currently think are secure”.

He called for better fostering of market conditions to enable innovation, and create a diversity of supply in a broader set of technologies.

Fleming said China was “bringing all elements of state power to control, influence design and dominate markets” while trying to dominate debates about global standards.

He said digital currencies held significant promise to revolutionise the finance sector but posed a potential threat to liberties if abused by illiberal states as they could enable “significant intrusions into the lives of citizens and companies”.

Russia remains the biggest immediate threat to the West but Communist China’s long-term dominance of technology poses a much bigger problem, he said.

“Russia is affecting the weather, whilst China is shaping the climate,” he said.

(Reporting by Guy Faulconbridge; editing by Michael Holden, Kate Holton and Timothy Heritage)

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Cyberattack exposes lack of required defenses on U.S. pipelines

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The shutdown of the biggest U.S. fuel pipeline by a ransomware attack highlights a systemic vulnerability: Pipeline operators have no requirement to implement cyber defenses.

The U.S. government has had robust, compulsory cybersecurity protocols for most of the power grid for about 10 years to prevent debilitating hacks by criminals or state actors.

But the country’s 2.7 million miles (4.3 million km) of oil, natural gas and hazardous liquid pipelines have only voluntary measures, which leaves security up to the individual operators, experts said.

“Simply encouraging pipelines to voluntarily adopt best practices is an inadequate response to the ever-increasing number and sophistication of malevolent cyber actors,” Richard Glick, the chairman of the Federal Energy Regulatory Commission (FERC), said.

Protections could include requirements for encryption, multifactor authentication, backup systems, personnel training and segmenting networks so access to the most sensitive elements can be restricted.

FERC’s authority to impose cyber standards on the electric grid came from a 2005 law but it does not extend to pipelines.

Colonial Pipeline, the largest U.S. oil products pipeline and source of nearly half the supply on the East Coast, has been shut since Friday after a ransomware attack the FBI attributed to DarkSide, a group cyber experts believe is based in Russia or Eastern Europe.

The outage has led to higher gasoline prices in the U.S. South and worries about wider shortages and potential price gouging ahead of the Memorial Day holiday.

Colonial did not immediately respond to a query about whether cybersecurity standards should be mandatory.

The American Petroleum Institute lobbying group said it was talking with the Transportation Security Administration (TSA), the Energy Department and others to understand the threat and mitigate risk.

THIN STAFFING

Cyber oversight of pipelines falls to the TSA, an office of the Department of Homeland Security (DHS), which has provided voluntary security guidelines to pipeline companies.

The General Accountability Office, the congressional watchdog, said in a 2019 report that the TSA only had six full-time employees in its pipeline security branch through 2018, which limited the office’s reviews of cybersecurity practices.

The TSA said it has since expanded staff to 34 positions on pipeline and cybersecurity. It did not immediately respond to a request for comment on whether it supports mandatory protections.

When asked by reporters whether the Biden administration would put in place rules, DHS Secretary Alejandro Mayorkas said it was discussing administrative and legislative options to “raise the cyber hygiene across the country.”

President Joe Biden is hoping Congress will pass a $2.3 billion infrastructure package, and pipeline requirements could be put into that legislation. But experts said there was no quick fix.

“The hard part is who do you tell what to do and what do you tell them to do,” Christi Tezak, an analyst at ClearView Energy Partners, said.

U.S. Representatives Fred Upton, a Republican, and Bobby Rush, a Democrat, said on Wednesday they have reintroduced legislation requiring the Department of Energy to ensure the security of natural gas and hazardous liquid pipelines. Such legislation could get folded into a wider bill.

The power grid is regulated by FERC, and mostly organized into nonprofit regional organizations. That made it relatively easy for legislators to put forward the 2005 law that allows FERC to approve mandatory cyber measures.

A range of public and private companies own pipelines. They mostly operate independently and lack a robust federal regulator.

Their oversight falls under different laws depending on what they carry. Products include crude oil, fuels, water, hazardous liquids and – potentially – carbon dioxide for burial underground to control climate change. This diversity could make it harder for legislators to impose a unified requirement.

Tristan Abbey, a former aide to Republican Senator Lisa Murkowski who worked at the White House national security council under former President Donald Trump, said Congress is both the best and worst way to tackle the problem.

“Legislation may be necessary when jurisdiction is ambiguous and agencies lack resources,” said Abbey, now president of Comarus Analytics LLC.

But a bill should not be seen as a magic wand, he said.

“Standards may be part of the answer, but federal regulations need to mesh with state requirements without stifling innovation.”

 

(Reporting by Timothy Gardner; Editing by Cynthia Osterman and Marguerita Choy)

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U.S. senator asks firms about sales of hard disk drives to Huawei

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A senior Republican U.S. senator on Tuesday asked the chief executives of Toshiba America Electronic Components, Seagate Technology, and Western Digital Corp if the companies are improperly supplying Huawei with foreign-produced hard disk drives.

Senator Roger Wicker, the ranking member of the Commerce Committee, said a 2020 U.S. Commerce Department regulation sought to “tighten Huawei’s ability to procure items that are the direct product of specified U.S. technology or software, such as hard disk drives.”

He said he was engaged “in a fact-finding process… about whether leading global suppliers of hard disk drives are complying” with the regulation.

(Reporting by David Shepardson, Editing by Rosalba O’Brien)

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Colonial Pipeline hackers stole data on Thursday

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The hackers who caused Colonial Pipeline to shut down on Friday began their cyberattack against the top U.S. fuel pipeline operator a day earlier and stole a large amount of data, Bloomberg News reported citing people familiar with the matter.

The attackers are part of a cybercrime group called DarkSide and took nearly 100 gigabytes of data out of Colonial’s network in just two hours on Thursday, Bloomberg reported late Saturday, citing two people involved in the company’s investigation.

Colonial did not immediately reply to an email from Reuters seeking comment outside usual U.S. business hours.

Colonial Pipeline shut its entire network, the source of nearly half of the U.S. East Coast’s fuel supply, after a cyber attack that involved ransomware.

 

(Reporting by Aakriti Bhalla in Bengaluru; Editing by Himani Sarkar)

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