[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                    SCADA SYSTEMS AND THE TERRORIST
                    THREAT: PROTECTING THE NATION'S
                        CRITICAL CONTROL SYSTEMS

=======================================================================

                             JOINT HEARING

                               before the

                        SUBCOMMITTEE ON ECONOMIC
                        SECURITY, INFRASTRUCTURE
                     0PROTECTION, AND CYBERSECURITY

                                with the

                       SUBCOMMITTEE ON EMERGENCY
                 PREPAREDNESS, SCIENCE, AND TECHNOLOGY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 18, 2005

                               __________

                           Serial No. 109-45

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     
  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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                     COMMITTEE ON HOMELAND SECURITY

                   Peter T. King, New York, Chairman

Don Young, Alaska                    Bennie G. Thompson, Mississippi
Lamar S. Smith, Texas                Loretta Sanchez, California
Curt Weldon, Pennsylvania            Edward J. Markey, Massachusetts
Christopher Shays, Connecticut       Norman D. Dicks, Washington
John Linder, Georgia                 Jane Harman, California
Mark E. Souder, Indiana              Peter A. DeFazio, Oregon
Tom Davis, Virginia                  Nita M. Lowey, New York
Daniel E. Lungren, California        Eleanor Holmes Norton, District of 
Jim Gibbons, Nevada                  Columbia
Rob Simmons, Connecticut             Zoe Lofgren, California
Mike Rogers, Alabama                 Sheila Jackson-Lee, Texas
Stevan Pearce, New Mexico            Bill Pascrell, Jr., New Jersey
Katherine Harris, Florida            Donna M. Christensen, U.S. Virgin 
Bobby Jindal, Louisiana              Islands
Dave G. Reichert, Washington         Bob Etheridge, North Carolina
Michael McCaul, Texas                James R. Langevin, Rhode Island
Charlie Dent, Pennsylvania           Kendrick B. Meek, Florida
Ginny Brown-Waite, Florida

                                 ______

   Subcommittee on Economic Security, Infrastructure Protection, and 
                             Cybersecurity

                Daniel E. Lungren, California, Chairman

Don Young, Alaska                    Loretta Sanchez, California
Lamar S. Smith, Texas                Edward J. Markey, Massachusetts
John Linder, Georgia                 Norman D. Dicks, Washington
Mark E. Souder, Indiana              Peter A. DeFazio, Oregon
Mike Rogers, Alabama                 Zoe Lofgren, California
Stevan Pearce, New Mexico            Sheila Jackson-Lee, Texas
Katherine Harris, Florida            Bill Pascrell, Jr., New Jersey
Bobby Jindal, Louisiana              James R. Langevin, Rhode Island
Peter T. King, New York (Ex          Bennie G. Thompson, Mississippi 
Officio)                             (Ex Officio)

                                 ______

     SUBCOMMITTE ON EMERGENCY PREPAREDNESS, SCIENCE, AND TECHNOLOGY

                 Dave G. Reichert, Washington, Chairman

Lamar S. Smith, Texas                Bill Pascrell, Jr., New Jersey
Curt Weldon, Pennsylvania            Loretta Sanchez, California
Rob Simmons, Connecticut             Norman D. Dicks, Washington
Mike Rogers, Alabama                 Jane Harman, California
Stevan Pearce, New Mexico            Nita M. Lowey, New York
Katherine Harris, Florida            Eleanor Holmes Norton, District of 
Michael McCaul, Texas                Columbia
Charlie Dent, Pennsylvania           Donna M. Christensen, U.S. Virgin 
Ginny Brown-Waite, Florida           Islands
Peter T. King, New York (Ex          Bob Etheridge, North Carolina
Officio)                             Bennie G. Thompson, Mississippi 
                                     (Ex Officio)

                                  (II)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Daniel E. Lungren, a Representative in Congress 
  From the State of California, and Chairman, Subcommittee on 
  Economic Security, Infrastructure Protection, and 
  Cybersecurity:
  Oral Statement.................................................     1
  Prepared Statement.............................................     1
The Honorable Loretta Sanchez, a Representative in Congress From 
  the State of California, and Ranking Member, Subcommittee on 
  Economic Security, Infrastructure Protection, and Cybersecurity     2
The Honorable Dave G. Reichert, a Representative in Congress From 
  the State of Washington, and Chairman, Subcommittee on 
  Emergency Preparedness, Science, and Technology:
  Oral Statement.................................................     2
  Prepared Statement.............................................     3
The Honorable Bill Pascrell, Jr., a Representative in Congress 
  From the State of New Jersey, and Ranking Member, Subcommittee 
  on Emergency Preparedness, Science and Technology:
  Prepared Statement.............................................     3
The Honoralee Peter T. King, a Representative in Congress From 
  the State of New York, and Chairman, Committee on Homeland 
  Security:
  Prepared Statement.............................................     4
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Oral Statement.................................................     5
  Prepared Statement.............................................    58
The Honorable Donna M. Christensen, a Delegate in Congress From 
  the U.S. Virgin Islands........................................    67
The Honorable Norman D. Dicks, a Representative in Congress From 
  the State Washington...........................................    68
The Honorable Bob Etheridge, a Representative in Congress From 
  the State of North Carolina....................................    65
The Honorable Sheila Jackson-Lee, a Representative in Congress 
  From the State of Texas........................................    64
The Honorable Eleanor Holmes Norton, a Delegate in Congress From 
  the District of Columbia.......................................    62
The Honorable Stevan Pearce, a Representative in Congress From 
  the State of New Mexico........................................    56
The Honorable Ginny Brown-Waite, a Representative in Congress 
  From the State of Florida......................................    60

                               Witnesses

Dr. K.P. Ananth, Associate Laboratory Director--National and 
  Homeland Security, Idaho National Laboratory:
  Oral Statement.................................................    24
  Prepared Statement.............................................    25
Mr. Alan Paller, Director of Research, The SANS Institute:
  Oral Statement.................................................    40
  Prepared Statement.............................................    42
Mr. Donald ``Andy'' Purdy, Acting Director, National Cyber 
  Security Division, U.S. Department of Homeland Security:
  Oral Statement.................................................     6
  Prepared Statement.............................................     7
Dr. William Rush, Institute Physicist, Gas Technology Institute:
  Oral Statement.................................................    31
  Prepared Statement.............................................    33
Mr. Larry Todd, Director, Security, Safety and Law Enforcement 
  Bureau of Reclamation, U.S. Department of the Interior:
  Oral Statement.................................................    14
  Prepared Statement.............................................    15
Dr. Sam Varnado, Director of Information Operations Center, 
  Sandia National Laboratory:
  Oral Statement.................................................    16
  Prepared Statement.............................................    18

                                APPENDIX

Dr. K.P. Ananth Responses to the Honorable Daniel E. Lungren 
  Questions......................................................    71
Mr. Donald ``Andy'' Purdy Responses to the Honorable Bennie G. 
  Thompson Questions.............................................    81
Mr. Larry Todd Responses to the Honorable Bennie G. Thompson 
  Questions......................................................    86
Dr. Sam Varnado Responses to the Honorable Bennie G. Thompson 
  Questions......................................................    89


                    SCADA SYSTEMS AND THE TERRORIST
                    THREAT: PROTECTING THE NATION'S
                        CRITICAL CONTROL SYSTEMS

                              ----------                              


                       Tuesday, October 18, 2005

             U.S. House of Representatives,
                    Committee on Homeland Security,
                         Subcommittee on Economic Security,
              Infrastructure Protection, and Cybersecurity,
                                                   with the
                                  Subcommittee on Emergency
                     Preparedness, Science, and Technology,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 4 p.m., in Room 
311, Cannon House Office Building, Hon. Dan Lungren [chairman 
of the Subcommittee on Economic Security, Infrastructure 
Protection, and Cybersecurity] presiding.
    Present: Representatives Lungren, Reichert, Pearce, Brown-
Waite, Pascrell, Thompson, Dicks, Norton, Jackson-Lee, 
Christensen, Etheridge and Sanchez.
    Mr. Lungren. The joint hearing of the Committee on Homeland 
Security Subcommittee on Economic Security, Infrastructure 
Protection and Cybersecurity and the Subcommittee on Emergency 
Preparedness, Science and Technology will come to order. The 
subcommittees are meeting today in joint session to hear 
testimony on supervisory control and data acquisition systems, 
better known as SCADA systems, in the effort to protect these 
critical control systems from terrorist attack.
    We have been informed that we will have votes starting at 
approximately 4:30, and as a result, we are going to have a 
major interruption. We have six major witnesses here on a very 
important matter, so I am going to not give my opening 
statement. It will be included as a part of the record. And 
then we will proceed.

       Prepared Opening Statement of the Honorable Daniel Lungren

    Good morning and I would like to welcome everyone to this joint 
hearing of the Committee on Homeland Security's Subcommittee on 
Economic Security, Infrastructure Protection, and Cybersecurity and the 
Subcommittee on Emergency Preparedness, Science & Technology. I thank 
Chairman Reichert and Ranking Member Pascrell for agreeing to hold this 
jointly, as this critical issue has far reaching impacts.
    We convene today to focus on the protection of control systems at 
our Nation's critical infrastructure. Control systems are utilized in a 
wide variety of industries--such as electrical generation and 
distribution, oil and gas systems, traffic signals and other 
transportation supervision, water management (including dams), and 
manufacturing industries. These control systems are commonly referred 
to as SCADA systems.
    These computer terminals have the ability to give supervisory 
control to a central user over separate and often disparate functions 
or processes. Further, SCADA systems collect information from remote 
locations and coalesce it into one location.
    Now what does this actually mean? Simply put, a manufacturing 
facility or any of the forementioned facilities incorporate many 
different processes and functions. To safely, securely, and efficiently 
run the facility, companies must be able to monitor and adjust these 
processes simultaneously. Before SCADA systems, workers would be placed 
throughout a facility and manually monitor and adjust the various 
systems. SCADA systems bring monitoring and control of these functions 
into one centralized location, making it easier and more efficient to 
run these processes.
    At the same time, these systems present serious security 
challenges. Because these terminals control crucial systems within our 
critical infrastructure and are often connected to networks and can be 
remotely accessed, they present an attractive means for those wishing 
to cause harm and confusion.
    Securing SCADA systems is similar to securing all of our cyber 
infrastructure; however, the consequences are potentially very 
different. Minimally, adversaries could target SCADA systems through 
cyber networks, utilizing common cyber attack methods to render the 
SCADA systems unusable. This could slow down, stop, or endanger the 
functions of the facility. This would result in not only serious 
problems at that facility but potential cascading effects on other 
facilities or processes that are dependent on the attacked facility. 
Even worse, terrorists could utilize SCADA systems for their own 
sinister motives--causing a pipeline to burst, opening flood gates on 
dams, or shutting down our electric supply, all without ever gaining 
access to the facility.
    Part of this hearing will be to understand the function of these 
systems within the greater picture of our critical infrastructure and 
to understand the general vulnerabilities, consequences, and 
interdependencies of these systems. Although there are literally 
thousands of SCADA systems across the U.S., not all of these control 
systems involve industries or facilities that would be considered high 
risk.
    The threat to these systems has long been recognized and the 
Federal government, the private sector, and this country's best minds 
have been working for years to address it. The second part of this 
hearing then, is to understand what progress has been made--at all 
levels--to address these vulnerabilities.
    We have a diverse panel of experts today, representing the Federal 
government, the National Labs, the dam industry, the gas industry, and 
the cyber industry. I look forward to hearing from all of you about 
your ongoing efforts, and your views on what we need to do to further 
assist you in addressing SCADA security.
    I am especially interested in hearing about the status of securing 
our dams. We have seen recently in New Orleans what can happen when 
nature overwhelms us, even with days of advance notice. The potential 
consequences of an unanticipated attack could be far worse.
    Again, I thank all of our witnesses for being here. I now recognize 
the Ranking Member of the Subcommittee, the Gentle Lady from California 
Ms. Sanchez, for any opening statement she'd like to make.

    Mr. Lungren. The Chair would recognize the Ranking Minority 
Member of the Subcommittee on Economic Security, Infrastructure 
Protection and Cybersecurity, the gentlelady from California 
Ms. Sanchez, for any statement she may make.
    Ms. Sanchez. Thank you, Mr. Chairman. And considering I am 
under the weather today and we are pushed against votes, I, 
too, will hold my opening statement and submit it for the 
record so that we can hear from the witnesses today. Thank you.
    Mr. Lungren. I thank the gentlelady, and her prepared 
statement will be made a part of the record.
    The Chair would now recognize the Chairman of the 
Subcommittee on Emergency Preparedness, Science and Technology, 
the gentleman from Washington Mr. Reichert, for any statement 
he may make.
    Mr. Reichert. Thank you, Mr. Chairman. I, too, will 
withhold boring you to death with my opening statement, and we 
will ask
that it be placed in the record. Thank you, and welcome to the 
witnesses today.
    [The information follows:]

       Prepared Opening Statement of the Honorable David Reichert

    Thank you, Chairman Lungren. I would also like to welcome everyone, 
especially our witnesses, to this joint hearing.
    We are here today to discuss a topic that affects our everyday 
lives, although many of us are never aware of it. Process and control 
systems and the operations that they manage are critical to our Nation. 
They enable us to have everything from clean drinking water and fuel 
for our cars to electricity in our homes.
    As a former law enforcement officer, I know firsthand that 
prevention is the best way to save lives and protect property. So, I am 
particularly interested in our Nation/s efforts to secure these 
systems.
    But, I also recognize that we can not expect to prevent every 
attack, especially in an environment as open and free-flowing as 
cyberspace. And, as we have seen in the aftermath of Hurricane Katrina, 
our ability to recover from an incident--whether natural or manmade--
can be just as important as our ability to detect and prevent it from 
happening in the first place.
    Part of the mission of the Department of Homeland Security's 
National Cyber Security Division is to ``establish a National 
Cyberspace Response System.'' Ideally, such a system will rapidly 
identify and respond to cyber incidents and help mitigate against any 
damage caused by malicious cyberspace activities.
    So far, we have fortunately not yet experienced a serious cyber 
attack directed at the control systems that manage our Nation's 
electrical grid, dams, and other critical plants. Undoubtedly, at some 
point, our luck will run out. That is precisely why we must continue to 
emphasize prevention and response and develop more robust SCADA 
software technology.
    I am, therefore, keenly interested in learning more about the 
vulnerabilities of our SCADA systems, what the NCSD--in partnership 
with the National labs and the private sector--has done to address such 
vulnerabilities, and the additional steps that need to be taken to 
establish and implement a cyber response system.
    Again, I want to thank all our witnesses for being with us today. I 
look forward to your testimony on this important issue.
    Thank you, Mr. Chairman, and I yield back the balance of my time.

    Mr. Lungren. All members of the committee--the Chairman 
would recognize the Ranking Minority Member of the Subcommittee 
on Emergency Preparedness, Science and Technology, the 
gentleman from New Jersey Mr. Pascrell, for any statement he 
might make. I would just inform the gentleman that we have all 
waived our statements, but the gentleman may proceed as he 
wishes.
    Mr. Pascrell. I will waive it.
    Mr. Lungren. Your statement will be made--a prepared 
statement will be made a part of the record.
    [The information follows:]

         Prepared Statement of the Honorable Bill Pascrell, Jr.

    I want to thank Chairman Lungren and Chairman Reichert for holding 
a hearing on an issue of vital importance to our national security.
    Indeed, protecting America's critical control systems is a topic 
that, I believe, has not received the attention it deserves. We know 
that vulnerabilities within these systems are abundant, and we know 
that the threat of a terrorist attack against these systems is real.
    Congress needs to engage in robust analysis and oversight in this 
realm; we need to help ensure the security of the various control 
systems that are used in critical infrastructure--and I am heartened 
that today two Homeland Security subcommittees are leading the charge.
    Obviously this is something that affects all of us. But as a 
resident of New Jersey, I must say that this issue particularly 
resonates with me.
    There are a number of areas in my state, for example, that contain 
key assets on which the region's economy and community functioning 
depend--including critical utilities that provide gas, electric power, 
water and telecommunications services.
    A cyber attack on one of New Jersey's four nuclear power plants, or 
100 chemical sites, for example, has the potential to be absolutely 
devastating. Not only in terms of lives lost, but also in the regional 
and national economic destruction it could bring forth. This is 
serious, serious business.
    Back in 2002, the National Infrastructure Protection Center 
reported that a computer belonging to an individual who had links to 
Osama bin Laden contained programs that clearly showed the individual's 
interest in the structural engineering of various critical 
infrastructures.
    It also indicated that al-Qa'ida members had sought information 
about control systems from multiple websites.
    With this knowledge, one would assume that Washington would take 
every appropriate step, take every possible measure, and institute 
every conceivable action to ensure that critical infrastructure would 
be greater protected.
    Inexplicably, this doesn't seem to be the case.
    In fact, DHS as a whole has been slow in completing its critical 
infrastructure protection policies.
    In December 2003, President Bush issued Presidential Directive 7, 
establishing a national policy for federal departments and agencies to 
prioritize critical infrastructure. DHS was charged with developing the 
National Infrastructure Protection Plan (N.I.P.P.) to serve as the 
guide for protecting infrastructure.
    The N.I.P.P. was due in December 2004. In February 2005, an 
``Interim plan'' was issued, setting a deadline of November 2005 for 
the final plan. According to the GAO, the interim plan was incomplete: 
it lacked both national-level milestones and sector-specific security 
plans.
    The plan remains incomplete to this day. We can't even get 
proposals ready in a timely matter. This is unconscionable.
    I'm also seriously concerned that the Department is not devoting 
enough manpower to this threat. According to an August 12th response by 
DHS to a request made by committee staff, there was only one full time 
employee staffed exclusively to control system projects at the National 
Cyber Security Division in the department.
    One person. Surely it takes more than a single, lonely individual 
to effectively coordinate the public and private efforts in the control 
systems field?
    The fact is this: the threats and dangers to control systems are 
increasing.
    Standardized technologies currently being used have commonly known 
vulnerabilities allowing for easy exploitation. The connectivity of 
control systems to other networks offers additional beaches in 
security. Widespread public availability of technical information about 
control systems continues to present a serious risk.
    And the federal government isn't ready.
    I look forward to the testimony from our witnesses today, and I 
hope that this hearing is the first in a series of actions our 
committee takes to ensure that control systems are as safe as they 
possibly can be.

    Mr. Lungren. All Members are reminded that opening 
statements may be submitted for the record.
    [The information follows:]

         Prepared Opening Statement of the Honorable Peter King

    Thank you. And thanks to our witnesses for appearing before these 
Subcommittees today.
    As Chairman Lungren pointed out-SCADA systems are an integral part 
of our critical infrastructure. These real time control systems operate 
our major industries that we rely on everyday, including our gas, 
water, electric and oil facilities. They are integral parts of our 
efficient operation of these industries- and our National economy. 
SCADA systems control integral and vital processes of our 
infrastructure with potential significant physical and public health 
and ramifications if they are shut down or misused. SCADA systems are 
part of the larger issue of cybersecurity and a vital component of 
critical infrastructure protection.
    Because these systems are connected to the internet or our 
telephone network--these systems can be remotely accessed, and they are 
easily penetrated. These systems were created decades ago and were 
designed before security was as great a concern as it is now. Many 
systems are not protected by basic security features, such as passwords 
or firewalls.
    The good news is that there have been no reported terrorist cyber-
attacks on domestic critical infrastructure control systems that have 
resulted in significant damage. This does not indicate that it is not 
possible or that terrorists are not interested in these 
vulnerabilities. There are reports that al-Qa'ida computers found in 
Afghanistan contained information on structural analysis programs for 
dams and that these computers were used to search for information on 
SCADA systems specifically.
    There have been cases of non-terrorist individuals breaking into 
control systems and in some cases causing damage including an instance 
in Australia, in 2000 where a malicious former employee remotely 
accessed the control system of a sewage plant and discharged almost 
265,000 gallons of sewage into the local environment.
    There are two things that we need to see happen. We need to be 
working with industry and the National Labs to develop new secure 
systems that can be put in as replacements or for new industries. But 
we can not expect all of the owners and operators of SCADA systems to 
incur the expensive cost of replacing existing control systems. Rather, 
the second thing we need to see- is procedures and protocols developed 
and distributed that can improve the security of these critical 
systems. Utilizing encryption, installing security software on outdated 
systems, training and educating employees on basic security procedures, 
these things can be done to reduce the vulnerabilities without entirely 
replacing the systems themselves.
    I look forward to hearing from this panel on their thoughts on 
these issues and what they have done specifically to improve the 
security of the existing SCADA systems and the new SCADA systems being 
produced. I know that DHS has worked with the National Labs and the 
Dept. of Energy to develop programs to test existing systems, to model 
interdependencies and vulnerabilities--but it is also evident that the 
private sector has not waited for the Federal government to provide 
guidance. I look forward to hearing from our private sector witnesses 
as well, as to their efforts to secure this vital component of our 
National infrastructure.
    Thank you again, and I look forward to your testimony and the 
opportunity to ask you questions.

     Prepared Opening Statement of the Honorable Bennie G. Thompson

    Thank you Mr. Chairman, Ranking Member Sanchez. I am glad we are 
here today to consider this important issue.
    SCADA systems perform vital functions in running much of our 
industrial and critical infrastructure processes.
    As technology continues to develop, this country will become more 
reliant on computerized control systems to perform these vital 
monitoring functions.
    It is imperative that the Congress and this Administration act 
quickly to solve the serious security problems that plague SCADA and 
control systems.
    The possibilities of a terrorist breaching a SCADA system are 
incredibly frightening.
    Nuclear power plants--like the one located in Port Gibson, 
Mississippi, in my District--can potentially be at risk.
    Electric grids, water management systems, and oil and gas control 
systems are also all at risk. Attacks can result in unquantifiable 
losses of infrastructure, money, and lives.
    The risks to control systems posed by a natural disaster, like 
Hurricane Katrina, must also be considered.
    The hurricane shut down the electrical grid along the Gulf Coast, 
thereby forcing two critical pipelines to shut down.
    We're all still paying at the gas pump partially because of that 
failure.
    we spent the time, money, and energy building our critical 
infrastructure systems; we must now spend the time, money, and energy 
to protect them.
    As you all know, protecting SCADA and control systems requires a 
commitment from two entities.
    The private sector must continue to identify current security 
risks, modify and adopt new encryption standards, and create new 
technologies to secure future systems.
    It's also important for us here in Congress to determine what role 
the federal government should play.
    Should we provide incentives for SCADA systems to comply with best 
practices? Should we establish new guidelines for existing SCADA 
systems?
    Should we use the leverage the federal government has when buying 
SCADA systems for itself in order to create changes across the market, 
as Mr. Paller will testify about today?
    In terms of current federal efforts, I am particularly concerned 
about what the National Cyber Security Division at DHS is doing right 
now.
    I am glad that the director of the NCSD is here today to answer 
some of those questions. Mr. Purdy, for example, I also want to hear 
more about what the NCSD is doing to help DHS complete the cyber 
security portions of the National Infrastructure Protection Plan. A 
final version of the NIPP was due last December. we are still waiting 
for it.
    I look forward to hearing from the members of this panel on all of 
these issues.
    Thank you Mr. Chairman.

    Mr. Lungren. We are pleased to have a distinguished panel 
of witnesses before us today on this important topic. The Chair 
would recognize Mr. Donald ``Andy'' Purdy, the Acting Director 
of the National Cyber Security Division of the U.S. Department 
of Homeland Security, to testify.
    I would just mention to all of you we are under the gun, I 
am sorry about that, because of votes that we are going to 
have. I would ask you to please restrict your oral statements 
to 5-minutes, and your prepared statements will be made a part 
of the record.

 STATEMENT OF DONALD ``ANDY'' PURDY, ACTING DIRECTOR, NATIONAL 
 CYBER SECURITY DIVISION, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Purdy. Good afternoon, Chairman Lungren and 
distinguished members of the committee. My name is Andy Purdy. 
I am the Acting Director of the Department of Homeland 
Security's National Cyber Security Division. I am pleased to 
appear before you today to share with you the work of NCSD to 
address one of the significant threats to our cyberspace and 
critical infrastructure, industrial control systems. In my 
testimony today I will focus on our Control Systems Security 
Program.
    To carry out our mission and related responsibilities under 
the National Infrastructure Protection Plan, we have identified 
two overarching priorities: to build an effective national 
cyberspace response system and implement a cyber risk 
management program for critical infrastructure protection of 
which our control systems effort is an important risk 
mitigation effort.
    The interdependency between physical and cyber 
infrastructures is particularly acute in the use of control 
systems as integral operating components by many of our 
critical infrastructures. To assure immediate attention is 
directed to protect these systems, we have established a 
Control Systems Security Program to coordinate efforts among 
Federal, State and local governments, as well as control 
systems owners, operators and vendors, to improve control 
system security within and across all critical infrastructure 
sectors. As a key component of the program, in August, 2004, we 
established a U.S. Computer Emergency Readiness Team Control 
Systems Security Center in partnership with Idaho and Sandia 
National Laboratories and other Department of Energy national 
laboratories. The center's mission is to reduce the risk of 
cyberattacks on control systems, and it partners with control 
systems industry associations, universities, vendors and 
industry experts.
    Our program encompasses five goals. First we seek to 
enhance the US-CERT capabilities for control systems security 
to coordinate incident management, provide timely situational 
awareness information, assess vulnerabilities, encourage 
voluntary reporting and manage vulnerability and threat 
reduction activities.
    Our second goal is to reduce control system cyber 
vulnerabilities in critical infrastructure. We have developed 
the draft protection framework for identifying protection 
measures and comparing them against existing security 
standards. In addition, the framework includes a self-
assessment tool developed to allow owners and operators to 
perform on-site assessments against the database of categorized 
security requirements. We will soon pilot the tool with 
multiple infrastructure sectors and will assist selected 
control systems owners and operators in using the tool at their 
sites.
    Our third goal is to bridge industry and governmental 
efforts through participation in working groups, standards 
development bodies and user conferences. In partnership with 
the Department of Homeland Security Science and Technology 
Directorate, we chair the Process Control System Forum, which 
includes industry, academia and government representatives. It 
is designed to accelerate the development of technology that 
will enhance the security, safety and reliability of control 
systems, including legacy installations.
    Our fourth goal is to develop control systems security 
awareness and create a self-sustaining security culture within 
the control systems community. A key element is our awareness 
workshop program, which we began in May of this year and will 
have completed approximately eight workshops by the end of this 
year.
    Our final goal is to make strategic recommendations for 
improvements to future generation secure control systems and 
security products. We have responsibility for developing 
requirements for cybersecurity R&D projects to inform our 
Science and Technology Directorate's research priorities, and 
we coordinate with S&T in the development of new technologies 
for securing control systems and networks.
    We have a robust effort underway with our partners to 
address the security of control systems through our Control 
System Security Program. The efforts of our center toward 
realizing the program goals has moved the ball forward in this 
arena by increasing the control systems communities' awareness 
of the need for cybersecurity and helping to provide them the 
tools and resources to secure their control systems. We 
continue to further these strategic goals through advancement 
of our key initiatives.
    We are committed to achieving success in meeting our goals 
and objectives, but we recognize we cannot do it alone. We will 
continue to meet and work with industry representatives, our 
government counterparts, academia and State and local 
government to formulate and enhance partnerships needed for 
productive collaboration, and leverage the efforts of all so we 
as a Nation are more secure in cyberspace and in our critical 
infrastructure.
    Again, thank you for the opportunity to testify to you 
today, and I look forward to answering your questions.
    Mr. Lungren. Thank you very much, Mr. Purdy.
    [The statement of Mr. Purdy follows:]

             Prepared Statement of Donald (Andy) Purdy, Jr.

    Good morning Chairman King and distinguished members of the 
Committee. My name is Andy Purdy, and I am the Acting Director of the 
Department of Homeland Security's National Cyber Security Division 
(NCSD). I am delighted to appear before you today to share with you the 
work of the NCSD to address one of the significant threats to our 
cyberspace and critical infrastructure--industrial control systems.
    In my testimony today, I will provide an overview of NCSD's mission 
and goals, priorities, and partnerships, with a particular focus on our 
Control Systems Security Program. The Control Systems Security Program 
addresses the cyber security of industrial control systems that run the 
operational processes within the nation's critical infrastructure.

DHS and Critical Infrastructure Protection
    Over the course of the past several months Secretary Chertoff 
conducted a systematic evaluation of the Department's operations. On 
July 13th, Secretary Chertoff announced the results of that evaluation 
and outlined his six point agenda for the path ahead for the 
Department. As part of this agenda, the Secretary announced several 
Departmental organizational changes. Among these was the creation of a 
new Preparedness Directorate which would house a newly created office 
of the Assistant Secretary for Cyber Security and Telecommunications. 
According to Secretary Chertoff, ``Securing our cyber systems is 
critical not only to ensure a way of life to which we've grown 
accustomed, but more importantly to protect the vast infrastructure 
these systems support and operate.''
    Currently, the Office of Infrastructure Protection (IP), located 
within the Information Analysis and Infrastructure Protection (IAIP) 
Directorate, is responsible for all critical infrastructure and key 
resource protection. The Office of Infrastructure Protection has four 
component divisions: (1) the Infrastructure Coordination Division 
(ICD), (2) the Protective Security Division (PSD), (3) the National 
Communications System (NCS), and (4) the National Cyber Security 
Division (NCSD).
    In December 2003, President Bush issued Homeland Security 
Presidential Directive 7: Critical Infrastructure Identification, 
Prioritization, and Protection (HSPD-7), which established a national 
policy for federal departments and agencies to identify and prioritize 
United States critical infrastructure and key resources and to protect 
them from terrorist attacks. Among other things, HSPD-7 identified 
seventeen (17) \1\ critical infrastructure and key resource sectors and 
assigned responsibility for each to a Sector Specific Agency (SSA), 
with DHS serving as the overall program coordinator.
---------------------------------------------------------------------------
    \1\ The NIPP identifies the following Critical Infrastructure 
Sectors and Key Resources: Food and Agriculture; Public Health and 
Healthcare; Drinking Water and Wastewater; Energy; Banking and Finance; 
National Monuments and Icons; Defense Industrial Base; Information 
Technology; Telecommunications; Chemical; Transportation Systems; 
Emergency Services; Postal and Shipping; Dams; Government Facilities; 
Commercial Facilities; Nuclear Reactors, Materials, and Waste.
---------------------------------------------------------------------------
    Additionally, HSPD-7 set forth how DHS should address critical 
infrastructure protection, including development of a ``summary of 
activities to be undertaken in order to: define and prioritize, reduce 
the vulnerability of, and coordinate the protection of critical 
infrastructure and key resources.''\2\ To meet this mandate, IP 
developed the interim National Infrastructure Protection Plan (NIPP), a 
plan that is to serve as the guide for addressing critical 
infrastructure and key resource protection. It sets forth a risk 
management framework for public and private sector stakeholders to work 
together to identify, prioritize, and conduct vulnerability assessments 
of critical assets and key resources in each sector. It also includes 
the identification of interdependencies of critical assets and key 
resources both within and across the sectors as well as providing 
priority protective measures that owners and operators of such assets 
should undertake to secure them. Recognizing that more that 85 percent 
of the critical infrastructure is owned and operated by the private 
sector and that the development of public-private partnership is 
paramount to securing our nation's assets, private sector-led Sector 
Coordinating Councils (SCCs) are being established to work with their 
appropriate SSA via Government Coordinating Councils (GCC), which 
represent the government agencies that have a role in protecting the 
respective sectors.
---------------------------------------------------------------------------
    \2\ Homeland Security Presidential Directive 7, December 17, 2003; 
http://www.whitehouse.gov/news/releases/2003/12/20031217-5.html.
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    Currently, the Office of Infrastructure Protection is finalizing 
the NIPP and it is expected to be released later this year. This 
finalized document will refine the public-private partnership model and 
a process for protecting our critical infrastructures from physical or 
cyber attack or natural disasters.

DHS and Cyber Security
    In June 2003, in response to the President's National Strategy to 
Secure Cyberspace, the Department of Homeland Security created the NCSD 
as a national focal point for cyber security. The national strategy 
established the following five national priorities for securing 
cyberspace:
Priority I:A National Cyberspace Security Response System
Priority II: A National Cyberspace Security Threat and Vulnerability 
Reduction Program
Priority III: A National Cyberspace Security Awareness and Training 
Program
Priority IV: Securing Government'S Cyberspace
Priority V: National Security and International Cyberspace Security 
Cooperation
    Given today's interconnected environment and DHS's integrated risk-
based approach to critical infrastructure protection, NCSD's mission is 
to work collaboratively with public, private, and international 
entities to secure cyberspace and America's cyber assets. To meet that 
mission, NCSD developed a Strategic Plan that establishes a set of 
goals with specific objectives for each goal, and milestones associated 
with each objective. The Strategic Plan goals, which are closely 
aligned with the Strategy, HSPD-7, the NIPP, and the Cyber Annex to the 
recently announced National Response Plan, are as follows:
        1. Establish a National Cyberspace Response System to prevent, 
        detect, respond to, and reconstitute rapidly after cyber 
        incidents;
        2. Work with public and private sector representatives to 
        reduce vulnerabilities and minimize severity of cyber attacks;
        3. Promote a comprehensive awareness plan to empower all 
        Americans to secure their own parts of cyberspace;
        4. Foster adequate training and education programs to support 
        the Nation's cyber security needs;
        5. Coordinate with the intelligence and law enforcement 
        communities to identify and reduce threats to cyberspace; and
        6. Build a world class organization that aggressively advances 
        its cyber security mission and goals in partnership with its 
        public and private stakeholders.
    To meet these goals, NCSD is organized into four operating branches 
to address the various aspects of the risk management structure: (1) 
U.S. Computer Emergency Readiness Team (US-CERT) Operations to manage 
the 24x7 threat watch, warning, and response capability that can 
identify emerging threats and vulnerabilities and coordinate responses 
to major cyber incidents; (2) Strategic Initiatives to manage 
activities to advance cyber security in critical infrastructure 
protection, control systems security, software development, training 
and education, exercises, and standards and best practices; (3) 
Outreach and Awareness to manage outreach, cyber security awareness, 
and partnership efforts to disseminate information to key 
constituencies and build collaborative actions with key stakeholders; 
and (4) Law Enforcement and Intelligence to coordinate with and share 
information between these communities and NCSD's other constituents in 
the private sector, public sector, academia, and others, and also to 
coordinate DHS efforts within interagency response and mitigation of 
cyber security incidents. Together, these branches make up NCSD's 
framework to address the cyber security challenges across our key 
stakeholder groups and build communications, collaboration, and 
awareness to further our collective capabilities to detect, recognize, 
attribute, respond to, mitigate, and reconstitute after cyber attacks.
    The Strategy, HSPD-7, and the interim NIPP provide NCSD with a 
clear operating mission and national coordination responsibility. To 
carry out this mission and its related responsibilities, NCSD has 
identified two overarching priorities: to build an effective national 
cyberspace response system and to implement a cyber risk management 
program for critical infrastructure protection. Our focus on these two 
priorities and related programs addresses the overarching NIPP Risk 
Management methodology and establishes the framework for securing 
cyberspace today and a foundation for addressing cyber security for the 
future.
    Within the second priority, in addition to fulfilling our NIPP role 
as the Sector Specific Agency for the Information Technology (IT) 
Sector and providing cross-sector cyber security guidance to all 
sectors, NCSD undertakes a cyber risk mitigation approach focused on 
three key areas. These include the Internet Disruption Working Group, 
the Software Assurance Program, and the Control Systems Security 
Program.

NCSD and Control Systems Cyber Security
    The interdependency between physical and cyber infrastructures is 
hardly more acute than in the use of control systems as integral 
operating components by many of our critical infrastructures. ``Control 
Systems'' is a generic term applied to hardware, firmware, 
communications, and software used to perform vital monitoring and 
controlling functions of sensitive processes and enable automation of 
physical systems. Specific types of control systems include Supervisory 
Control and Data Acquisition (SCADA) systems, Process Control Systems 
(PCS), and Distributed Control Systems (DCS).
    Examples of the critical infrastructure processes and functions 
that control systems monitor and control include energy transmission 
and distribution, pipelines, water and pumping stations, 
telecommunications, chemical processing, pharmaceutical production, 
rail and light rail, manufacturing, and food production. Increasingly, 
these control systems are implemented with remote access and 
connections to open networks such as corporate intranets and the 
Internet. Older control systems that operated with manual components, 
vacuum actuators, and proprietary software are rapidly being upgraded 
with modern computer systems. These sophisticated IT tools are making 
our critical infrastructure assets more automated, more productive, 
more efficient, and more innovative, but they also may expose many of 
those physical assets to physical consequences from new, cyber-related 
threats and vulnerabilities.
    Control systems represent an attractive target for malicious actors 
for several reasons. First, they provide a possible avenue for 
inflicting physical, environmental, or economic harm to the nation from 
a distance. Second, relatively mature attacking tools have been 
developed and are available on the Internet. Finally, these tools can 
be used with little technical expertise to attack control systems that 
are accessible from the Internet.
    To assure immediate attention is directed to protect these systems, 
NCSD established the Control Systems Security Program to coordinate 
efforts among federal, state, and local governments, as well as control 
system owners, operators, and vendors to improve control system 
security within and across all critical infrastructure sectors.
    The Program incorporates five highly integrated goals to address 
the issues and challenges associated with control systems security.
        1. Coordinate control system incident management, provide 
        timely situational awareness information for control systems, 
        assess control system vulnerabilities, encourage voluntary 
        reporting, and manage control system vulnerability and threat 
        reduction activities by enhancing the US-CERT's capabilities 
        for control systems security;
        2. Reduce control system cyber vulnerabilities in Critical 
        Infrastructure by establishing a proactive environment for risk 
        reduction and security assessments, to evaluate systems, and to 
        work with control systems owner/operators and vendors to 
        resolve vulnerabilities;
        3. Bridge industry and governmental efforts through 
        participation in working groups, standards development bodies, 
        and user conferences to build cooperative and trusted 
        relationships and enhance control systems security efforts;
        4. Develop control systems security awareness and create a 
        self-sustaining security culture within the control systems 
        community; and
        5. Make strategic recommendations as to the funding, 
        development, and testing of next-generation secure control 
        systems and security products.

Goal 1--Enhance US-CERT capabilities for control systems cyber security
    Our control systems activities support NCSD's overall efforts to 
address cyber security across critical infrastructure sectors over the 
long term, as well as the US-CERT's capability in the management, 
response, and handling of incidents and vulnerabilities, and mitigation 
of threat actions specific to critical control systems functions. NCSD 
established the US-CERT Control Systems Security Center (CSSC) in 
partnership with Idaho National Laboratory (INL) and other Department 
of Energy (DOE) National Laboratories \3\ in August, 2004. Through the 
use of Cooperative Research and Development Agreements (CRADA's) and 
other mutually benefiting agreements, the CSSC also incorporates 
partners from control systems industry associations, universities, 
vendors, and industry experts. The CSSC mission is to reduce the risk 
of cyber attacks on control systems, and as such, it provides 
facilities and expertise to support the reduction of risk in critical 
infrastructure through site and system assessments, demonstrations for 
education and awareness, risk assessment and risk analysis, adversarial 
awareness, and coordination among the national laboratories.
---------------------------------------------------------------------------
    \1\ Pacific Northwest, Los Alamos, Argonne, Sandia, Lawrence 
Livermore and Savannah River
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    Through its partnerships and technological improvement efforts for 
systems and facilities, the CSSC has been maturing response 
capabilities to support US-CERT with control system expertise. The CSSC 
continues to work with the US-CERT in enhancing their ability to 
provide initial control system guidance and expertise, and a CSSC 
limited access secure portal (https://us-cert.esportals.net/) has been 
established for information coordination and dissemination of cyber 
threat and vulnerability alerts. A web site is under development to 
share control systems security information with our cyber security 
partners and the control systems community. The web site, which will be 
available in FY06, will also provide information, resources, and links 
for owners and operators to effectively defend their control systems. A 
``Tier II'' support function will further support US-CERT by leveraging 
CSSC partners in incident response and vulnerability handling, and 
performing in-depth evaluation of specific attacks or exploits and 
determining the impact on various operating systems, components, and 
vendor systems.
    In FY06, CSSC will explore the need for establishing a trusted 
third-party within academia to serve as a voluntary reporting center to 
encourage open communication among the private sector regarding 
emerging control system threats and exploits. As such, the CSSC is 
developing a control systems incident management support tool to 
enhance US-CERT cyber threat notification efforts. It is designed for 
use when a new vulnerability is detected and will enable the 
identification of critical infrastructure at greatest risk to an 
identified threat, thereby enabling the CSSC to rapidly notify the 
facilities at the greatest risk. Owners and operators can then 
implement protective measures as appropriate to reduce that risk and 
mitigate damage to their systems. It is important to note that the 
effectiveness of the tool is dependent on the acquisition of current 
owner/operator system data. NCSD continues to work with Sector Specific 
Agencies to obtain data from the various sectors necessary to utilize 
the tool and maximize its benefits.

    Goal 2--Reduce control system vulnerabilities in critical 
infrastructure
    To reduce control system vulnerabilities in our critical 
infrastructure, CSSC developed a draft cyber security protection 
framework for identifying control systems security protection measures 
and comparing them against existing security standards. The cyber 
security protection framework, which is based on the Common Criteria 
and an Industrial Control System Security Protection Profile developed 
by the National Institute of Standards and Technology, supports NCSD's 
mission to reduce cyber security risk within control systems. The 
framework provides a systematic methodology for assessing the cyber 
security posture of control systems. It is designed to reduce the 
burden on owners and operators by providing them with a means to select 
protective measures that apply to their specific architecture and 
operating environment and reduce their respective risk.
    Application of the framework methodology results in a risk-based 
set of security measures. Risk is defined by DHS as Risk = Threat x 
Vulnerability x Consequence. To calculate quantitative values for risk, 
one must define the system of interest, establish attack-defense-
failure scenarios, and consider the consequences of a successful 
attack. Then, protection measures are identified to reduce risk. The 
overall goal is to provide a quantitative, traceable, and supportable 
value of risk.
    As part of this framework, the CSSC also has capabilities at INL to 
perform vulnerability assessments of control systems. For example, the 
CSSC leverages the National SCADA Test Bed funded by DOE and operated 
in partnership with Sandia National Laboratories. Linkages with these 
test beds and assessment facilities provides the CSSC with incoming and 
outgoing data traffic and communication channels necessary for the 
replication of control systems (e.g., PCS, SCADA) and components. These 
testing capabilities also support quick mock-ups of control systems 
and/or components to evaluate existing threats, vulnerabilities, and 
incidents as they are reported to the US-CERT.
    The CSSC utilizes a unique ``plug and play'' patching system that 
allows engineers to assess systems or components in an environment 
simulating the conditions found in industry to include multiple 
communication pathways and live incoming and outgoing control systems 
specific data traffic. This allows for in-depth assessments of control 
systems in a near true-to-life environment. The CSSC is working with 
commercial vendors and DOE to complete assessments of three different 
control systems to identify cyber vulnerabilities, reverse engineer 
exploits, and provide solutions to secure vendor systems. A code-based 
analysis has also been conducted in cooperation with a vendor/
manufacturer to identify possible vulnerabilities and recommendations 
to secure the system.
    Our adversaries are developing tools to hack into and take over 
control systems, and we need greater collective awareness of those 
capabilities to understand specific threats to and vulnerabilities of 
our control systems. As such, CSSC tracks information on current 
control systems security trends and threats, review and assesses new 
vulnerabilities and exploits as they are discovered or reported, and 
conducts analysis to better understand adversarial tools and 
capabilities. The CSSC considers specific exploit assessment scenarios 
on control systems and ``reverse engineers'' exploits to provide 
solutions to industry before an exploit is made public.
    The cyber security protection framework also leverages best 
practices from industry for securing control systems against cyber 
attacks and organizes them so the control systems community can 
identify specific solutions to their security vulnerabilities. As part 
of the framework, implementation tools, such as a ``self-assessment 
tool,'' have also been developed to allow owners and operators of 
industrial control systems to perform on-site self-assessments against 
a database of categorized security requirements. Each security 
requirement is supported by recommendations for meeting the requirement 
and mitigating vulnerabilities within the architecture of that 
particular control system. As new vulnerabilities emerge and associated 
solutions are developed, the framework of security requirements will 
expand and new protection solutions will be made available to the 
control system community. The protection framework provides categorized 
and graded guidance, component by component, for improving cyber 
security of control systems.
    The draft security protection framework and its associated 
implementation tools are ready for validation. NCSD will soon pilot the 
self-assessment tool with multiple infrastructure sectors and will 
assist selected control system owners and operators in using the tool 
at their sites. This effort will help owners and operators identify 
security vulnerabilities within their systems, recommend solutions for 
reducing the risk of successful cyber attacks, and prioritize risk 
reduction efforts. The pilot effort will also allow NCSD to validate 
and enhance the self-assessment tool for future, widespread roll-out 
across the control system community. NCSD is also working with PSD and 
other Sector Specific Agencies to ensure that concepts from the cyber 
security protection framework are integrated into risk and 
vulnerability assessments across the sectors. For example, NCSD is 
working closely with the American Society of Mechanical Engineers and 
PSD to incorporate cyber into the Risk Analysis and Management for 
Critical Asset Protection (RAMCAP) framework.

    Goal 3--Bridge industry and governmental efforts through 
participation in working groups, standards development bodies, and user 
conferences
    A primary objective of NCSD's Control Systems Security Program is 
to coordinate efforts among Federal, State, and local governments, as 
well as control system owners, operators, and vendors to improve 
control systems security within and across all critical infrastructure 
sectors.
    In partnership with DHS' Science and Technology (S&T) Directorate, 
NCSD chairs the Process Control System Forum (PCSF). The PCSF includes 
industry, academia, and government representatives and is designed to 
accelerate the development of technology that will enhance the 
security, safety, and reliability of control systems, including legacy 
installations.
    In addition to the PCSF, the CSSC works to enhance private sector 
awareness through participation in industry association meetings, user 
groups, and standards coordination work groups. For example, most 
recently, representatives from CSSC participated in a Railroad 
Association meeting in Annapolis, Maryland, the Pacific Northwest 
Economic Region 15th Summit, and the Interagency Forum for 
Infrastructure Protection in Portland, Washington. At all of these 
gatherings, attendees were provided with an overview of the CSSC 
program, capabilities, and with information on how they can participate 
and take advantage of what the CSSC program has to offer, including 
alert and informational bulletins, self-assessment and risk reduction 
calculation tools.
    CSSC has also established relationships with a number of industry 
partners, including partnerships designed to facilitate initial 
assessments and develop risk reduction plans in various industry 
sectors. Our private industry partners provide experience in 
understanding vulnerabilities and operational perspectives, and bring 
established contacts within the control systems community. 
Specifically, they provide CSSC with control system expertise from 
various critical infrastructure sector perspectives; expertise and 
feedback on assessment tools; subject matter expertise regarding 
development of security requirements and best practices; assessment, 
research, and risk assessment capabilities; and contacts and 
opportunities to interface with sectors.
    CSSC is also working with control system vendors to provide 
equipment for assessments to be conducted at CSSC facilities. They 
assist in identifying vulnerabilities based on their experience and 
work to resolve vulnerabilities in next generation and legacy systems 
as a result of assessments performed against their systems. A number of 
industries (e.g., oil and gas, chemical, petro-chemical, electrical, 
power generation plant automation [coal, hydro, and gas fired plants], 
and transportation) are contributing to these CSSC efforts to reduce 
cyber vulnerabilities in control systems. Partnerships with members of 
the control system community are designed to help NCSD better assist 
owners and operators secure their systems.

    Goal 4--Enhance control systems security awareness
    The NCSD is engaged in several activities designed to increases 
awareness and provide the tools and products necessary to enable the 
critical infrastructures and key resources to secure their control 
systems against cyber threats. A key element is CSSC's awareness 
workshop program.
    Our ``threat-brief, demonstration, and mitigations'' workshop has 
been well received by the control systems community. The first workshop 
was held in May, 2005 at a PCSF meeting in Dallas, Texas. Since then 
additional workshops have been held in Bellevue, Washington and Idaho 
Falls, Idaho. We anticipate that by late 2005, approximately eight 
workshops will have been conducted. The workshops include a brief 
overview of the threat picture, a cyber vulnerability demonstration, 
and a discussion of mitigation steps. NCSD has found that cyber 
vulnerability demonstrations are an effective method to show the impact 
that cyber attacks can have on their control systems and operations and 
that cyber security is essential to protect them.

    Goal 5--Make strategic recommendations for improvements to future 
generation secure control systems and security products
    Cyber-related research and development (R&D) is vital to improving 
the resiliency of the Nation's critical infrastructures. This difficult 
strategic challenge requires a coordinated and focused effort from 
across the Federal Government, State and local governments, the private 
sector, and academia to advance the security of critical cyber systems.
    Two components within DHS share responsibility for cyber R&D. The 
Science & Technology (S&T) Directorate serves as the primary agent 
responsible for executing cyber security R&D programs. NCSD has 
responsibility for developing requirements for cyber security R&D 
projects. NCSD supports the overall DHS R&D mission by identifying 
areas for cyber innovation and coordinating with S&T. NCSD collects, 
develops, and submits cyber security R&D requirements to provide input 
to the federal cyber security R&D community and specifically to inform 
the DHS S&T Directorate's cyber security research priorities. NCSD 
coordinates with S&T on the development of new technologies for 
securing SCADA systems and networks.
    NCSD's Control Systems Security Program identifies R&D cyber 
security requirements for legacy and next generation control systems 
and security products through US-CERT CSSC operational activities such 
as incident management, site and system assessments, and analyses. As 
difficult problems which would benefit from advanced technological 
solutions are discovered, requirements are identified and forwarded to 
control systems vendors and DHS S&T for new R&D projects. Best 
practices, common vulnerabilities, and requirements for security 
standards are also shared with the control systems community to promote 
enhanced security for legacy and new control systems.
    DHS S&T manages the Congressionally directed funding for the 
Institute for Information Infrastructure Protection (I3P). The I3P is a 
national research consortium composed of more than two dozen research 
entities, including academic institutions, non-profits, federally 
funded labs, and FFRDCs. In early 2005, the I3P launched a major 
initiative focused on addressing the vulnerabilities of SCADA systems 
in the oil and gas industry.

Moving Forward
    NCSD has a robust effort underway to address the security of 
control systems through our Control Systems Security Program. The 
efforts of the CSSC toward realizing the five goals the Program sets 
forth, including the enhancement of capabilities, initiatives to reduce 
vulnerabilities, and establishment of partnerships, has moved the ball 
forward in this arena by increasing the control system communities' 
awareness of the need for control systems cyber security and providing 
them the tools and resources to secure their control systems.
    Many activities are planned for the near future including:
         Developing and finalizing the CSSC portal and web site 
        to enhance capabilities and encourage greater information 
        exchange with the control system community.
         Supporting vulnerability assessments to determine the 
        cyber security posture of legacy and next generation control 
        systems at critical sites. Assessments will identify critical 
        components threat vectors, and misconfigurations in hardware, 
        applications, and network topologies within our current 
        infrastructure and recommend protective measures. This 
        information will aid in determining the level of compliance 
        with current best practices and control system protection 
        framework requirements.
         Continuing to integrate CSSC activities, skills, and 
        capabilities to identify particular high risk cyber 
        vulnerabilities. Specifically, for FY06 high-risk system 
        vulnerabilities will be identified in at least two critical 
        infrastructure sectors and then security enhancements to 
        mitigate those vulnerabilities will be identified. Other site 
        assessments will be supported as appropriate to identify cyber 
        risks to control systems.
         Encouraging the voluntary implementation of security 
        measures. The CSSC will accomplish this through development of 
        a ``Business Case,'' beginning in FY06. Development of a 
        business case will demonstrate cost-benefit where the cost will 
        be represented as the cost of implementing countermeasures and 
        benefit will be the reduction of risk. Risk analysis is the 
        basis for the business case.
         Continuing to work with PSD and other Sector Specific 
        Agencies to integrate cyber security and control systems 
        security efforts into risk and vulnerability assessment efforts 
        such as Comprehensive Reviews, the Vulnerability Identification 
        Self Assessment Tool, and the Risk Analysis and Management for 
        Critical Asset Protection.
         Continuing to participate in forums and meetings to 
        raise awareness while conducting targeted outreach activities 
        in sectors and with senior executives to not only pilot and 
        validate our control systems protection framework and tools but 
        also to create an understanding among control system owners and 
        operators of the need for and importance of security.
    We are committed to achieving success in meeting our goals and 
objectives, but we cannot do it alone. We will continue to meet with 
industry representatives, our government counterparts, academia, and 
state and local representatives to formulate the partnerships needed 
for productive collaboration and leverage the efforts of all, so we, as 
a nation, are more secure in cyberspace and in our critical 
infrastructures.
    Again, thank you for the opportunity to testify before you today. I 
would be happy to answer any questions you have.

    Mr. Lungren. The Chair would now recognize Mr. Larry Todd, 
the Director of Security, Safety and Law Enforcement for the 
Bureau of Reclamation, U.S. Department of Interior, to testify.

 STATEMENT OF LARRY TODD, DIRECTOR OF SECURITY, SAFETY AND LAW 
  ENFORCEMENT, BUREAU OF RECLAMATION, U.S. DEPARTMENT OF THE 
                            INTERIOR

    Mr. Todd. Thank you, Mr. Chairman and distinguished members 
of the subcommittee. I am pleased to appear before you today to 
tell you about the security of the control systems used by the 
Bureau of Reclamation.
    Reclamation uses SCADA systems as tools to enable us to 
meet our mission of water delivery, power generation, flow 
monitoring and water regulation. SCADA is used to control 
outlet works, valves at dams, to control hydroelectric 
generators and associated circuit breaker switches and 
transformers, and to control pumps and gates on water delivery 
systems and canals. However, we do not use SCADA controls to 
operate the spillway gates, nor for flood control operations.
    Reclamation has a number of security features built into 
the SCADA operation. For instance, no SCADA system is attached 
to the Internet, and therefore, the systems cannot be accessed 
by the Internet. There are software controls within SCADA 
systems to protect against unauthorized operation, and on some 
facilities we have mechanical controls that prevent operation 
beyond set parameters. In addition, Reclamation regularly tests 
to ensure the connectivity does not exist.
    To help identify physical and cyber vulnerabilities, 
Reclamation uses independent organizations to evaluate our 
security posture. We have had numerous investigations by the 
Inspector General's Office, and they report that the SCADA 
systems are operating in relative safety from potential 
catastrophic cybersecurity threats.
    In summary, Reclamation recognizes that SCADA plays a key 
role in protecting critical infrastructure components. Where we 
employ SCADA systems, we believe we have taken responsible 
steps to ensure their security and safe operation. We also will 
employ better assessment and protection tools as they become 
available.
    Thank you for this opportunity to describe Reclamation's 
use of SCADA. I would be pleased to answer any questions the 
committee may have.
    Mr. Lungren. Thank you very much, Mr. Todd.
    [The statement of Mr. Todd follows:]

                    Prepared Statement of Larry Todd

    Mr. Chairman, my name is Larry Todd, and until recently I served as 
the Director of Security, Safety, and Law Enforcement for the U.S. 
Bureau of Reclamation. Established in 1902, Reclamation is known 
primarily for the dams, power plants, and canals we have built and 
operate in seventeen western States. Reclamation is our Nation's 
largest wholesaler of water, and its second largest producer of 
hydroelectric power. I am pleased to appear before you today to tell 
you about the security of the control systems used by the Bureau of 
Reclamation.

Reclamation's Supervisory Control and Data Acquisition (SCADA) Systems
    Reclamation employs SCADA systems as tools to enable us to meet our 
mission obligations of providing essential services and commodities. 
These obligations include electric power generation, flood monitoring, 
water regulation, and water delivery. To accomplish these goals, 
Reclamation controls water release gates and valves at dams; 
hydroelectric generators, circuit breakers, switches and transformers 
at power plants; and pumps and gates on waterways and canals.
    Reclamation's SCADA systems collect information about our 
facilities through transducers, converting information such as gate 
position, reservoir level, hydroelectric generator output, and water 
flow to electrical signals for processing in the SCADA system's 
computers. Once in the computers, the information is examined for any 
unusual characteristics, such as whether it exceeds an expected value. 
When information does not meet expectations, alarms may be triggered to 
inform operations staff of the situation, enabling them to take 
corrective actions. Reclamation's major SCADA control centers are 
manned at all times, enabling operations staff to react to both normal 
operations and emergency situations 24 hours a day and 365 days a year.
    Along with collecting information, Reclamation's SCADA systems also 
facilitate our operations staff's reaction to normal and abnormal 
operational needs. They do this by supporting the supervised remote 
control of our facilities. By providing the operations staff with 
information about the facility, informed decisions can be made quickly 
and the appropriate actions taken. The SCADA systems computers help to 
supervise these decisions by ensuring that they meet safe operational 
criteria.

Protecting Reclamation's SCADA Systems
    The focus of security efforts has changed since SCADA systems were 
first employed by Reclamation. In those early years SCADA design 
focused almost entirely on the operational integrity of the SCADA 
systems. In all cases where SCADA systems were permitted to control 
equipment, the safety and reliability of the control was examined and 
appropriate improvement measures were engineered and incorporated. This 
supported safer equipment operation and permitted the disabling of 
SCADA control if necessary. This was done to protect the equipment and 
to ensure the safety of the public and Reclamation personnel in the 
event of a SCADA malfunction. These safety measures acted independently 
from the SCADA system to ensure that the failure of the SCADA system 
did not adversely affect the safety measures. If the safety of SCADA 
control actions could not be ensured, additional steps were taken to 
limit the degree of SCADA control or the control was not enabled. 
Reclamation still follows these practices in implementing its SCADA 
systems, providing a significant measure of operation security for its 
SCADA controlled facilities.
    From the very beginning of Reclamation's use of SCADA systems, we 
have maintained a policy of not connecting our SCADA systems to our 
administrative networks. Today we adhere to that policy in all but the 
most unusual of situations. All connections to SCADA systems are 
minimized. Reclamation does not connect its SCADA systems to the 
Internet and routinely tests to ensure that such connectivity does not 
exist. Wherever practical, connections to our SCADA systems do not use 
Internet-like protocols, instead employing simple, limited capability, 
serial protocols. Those connections that must be present and that use 
Internet-like protocols are protected by firewalls and intrusion 
detection systems. Reclamation has adopted ``best practices'' and 
follows the cyber security guidance outlined by the National Institute 
of Standards and Technology (NIST) in their Special Publications.
    In addition, Reclamation has evaluated and improved both personnel 
and physical security at our SCADA facilities. We perform background 
checks on key personnel and have ``hardened'' our facilities and 
control rooms through the addition of various access controls. This 
includes the access to our SCADA system control consoles.
    To help identify physical and cyber vulnerabilities within the 
organization, Reclamation has invited independent organizations, 
including some represented by other panel members, to evaluate our 
security posture. We have also supported numerous investigations by our 
Inspector General's Office, some of which included limited penetration 
testing of our SCADA systems. The Inspector General's FY05 management 
report concluded that ``the SCADA systems are operating in relative 
safety from potentially catastrophic cyber-security threats.'' To 
maintain these results, we are continuously evaluating and implementing 
prudent and practical security improvements.

Actions to Improve SCADA Security
    Despite our security successes so far, Reclamation believes we can 
still take additional steps to improve the security of our SCADA 
systems. These steps, specifically identified and addressed in internal 
documents, will create more rigorous testing processes, improve and 
increase the frequency of security assurance reviews, and establish 
more comprehensive security planning targets. We also favor additional 
steps to improve the coordination of SCADA security efforts at both the 
Federal and private sector levels. Close coordination will assure 
consistency of Federal and private sector standards and security 
guidance, and could also help ensure that an appropriately rigorous 
security baseline is established for SCADA systems employed in 
different industry segments, depending on the significance of the 
infrastructure monitored or controlled.

In Summary
    Reclamation recognizes that it plays a key role in protecting 
critical infrastructure components, including dams, waterways, water 
resources, and electrical generation capability. Where we employ SCADA 
systems to facilitate the control of these components, we believe we 
have taken responsible steps to ensure their security and safe 
operation. We recognize that cyber security, as it applies to both 
administrative and SCADA systems, requires continuous monitoring and 
diligence. We believe our security program meets the challenges of 
these requirements, but look forward to contributing to and employing 
better development, assessment, and protection tools and techniques as 
they become available.

    Mr. Lungren. The Chair would now recognize Mr. Sam Varnado, 
the Director of Information Operations Center at the Sandia 
National Laboratory, to testify.

  STATEMENT OF SAM VARNADO, DIRECTOR, INFORMATION OPERATIONS 
               CENTER, SANDIA NATIONAL LABORATORY

    Mr. Varnado. Thank you, Mr. Chairman and distinguished 
members of this committee. I am Sam Varnado from Sandia 
National Laboratories, with laboratories in both California and 
New Mexico.
    First let me applaud the work the committee is doing. It is 
very important to the well-being of our citizens and to the 
national security. I am pleased to be part of it.
    Today we are going to discuss SCADA systems. We are 
concerned about these systems. We are very worried about them 
because successful cyberattacks on these systems could lead to 
serious consequences, which include loss of life, destruction 
of equipment that is hard to replace, environmental insult and 
economic loss.
    Let me give you one example. Mr. Chairman, in June of 1982, 
a huge explosion occurred in the Siberian wilderness in the 
former Soviet Union. The yield was estimated at 3 kilotons in 
that explosion. In his book At the Abyss: An Insider's History 
of the Cold War, Thomas Reed attributes the monumental 
explosion and resulting fire to a cyberattack on the SCADA 
system that controlled the Trans-Siberian pipeline. According 
to Mr. Reed, the pipeline software that ran the pumps, turbines 
and valve settings was programmed to produce pressures far 
beyond those acceptable to the pipeline joints and wells. He 
further states that the malevolent software in this case was 
what we call today a Trojan. It had been implanted in the host 
software by a foreign intelligence service. This episode 
illustrates the physical damage that can be created by 
attacking a cybersystem.
    SCADA systems are the soft underbelly of our infrastructure 
protection strategy in this country. The older stand-alone 
legacy SCADA systems are highly vulnerable. Some of these 
vulnerabilities are listed in my written statement. But today 
the trend is to replace those older systems with control 
systems that use the Internet as the backbone. From a security 
standpoint, this will make matters worse for the following 
reasons: First, U.S. computer networks are under daily attack, 
and adversaries are becoming more sophisticated. We are seeing 
structured, well-resourced attacks that are designed to steal 
information or disrupt and/or deny processes. For example, the 
recent Super Slammer, which was a fast worm, infected 60 
percent of DOD's NIPRNet computers in 8 minutes.
    Improvements in attack methods, particularly by 
sophisticated threats such as terrorist and nation states, are 
outpacing our activities in defensive countermeasures. The 
contest between the attackers and the defenders is a dreadful 
mismatch with the advantage strongly in the attacker's corner.
    Second, information technology vendors release on average 
four new vulnerabilities each day at the same time new attack 
methods are proliferating.
    Third, we have no alternative to the use of commercial off-
the-shelf, or COTS, products in our information systems because 
of cost issues; therefore, most of the hardware and software we 
use is manufactured in countries whose interests do not always 
align with those of the United States. We are buying and 
embedding these products in very complex systems that we expect 
to be secure. We are essentially trying to build trusted 
systems from untrusted components, and many of us wonder if it 
can be done at all.
    Fourth, most of the current emphasis in cybersecurity is on 
responding to hacker attacks that exploit the inherent 
vulnerabilities that are present in all networked computer 
systems. This effort is necessary and useful and should be 
increased, but a longer-term view is needed. We need to put 
more emphasis on addressing enterprisewide solutions and 
threats from the more sophisticated adversaries.
    My suggestions for addressing these problems are as 
follows: First, reaffirm the concept of public/private 
partnerships, and encourage stronger collaboration among 
government, industry, universities and national labs. We need 
to put more effort into sharing information on threats, 
vulnerabilities, consequences of outages, training and 
technology.
    Second, extend these partnerships to include helping the 
infrastructure owners make the business case for their 
investments in security upgrades.
    Third, increase funding for cybersecurity technology to 
address the new threat and vulnerability environment and to 
keep the defensive efforts on par with the attack development 
activities being conducted by our adversaries.
    Fourth, establish and fully fund a concentrated effort to 
provide defense against the sophisticated threat.
    Finally, support the initiatives, directives and plans 
described in several reports that DHS and the administration 
have produced over the last few years.
    Thank you, Mr. Chairman and members of the committee, for 
the opportunity to address you today. I would be happy to 
answer questions at the appropriate time.
    Mr. Lungren. Thank you, Doctor.
    [The statement of Mr. Varnado follows:]

              Prepared Statement of Dr. Samuel G. Varnado

Introduction
    Mr. Chairman and distinguished members of the committee, thank you 
for the opportunity to testify on the vulnerabilities of, and threats 
to, Supervisory Control and Data Acquisition (SCADA) systems. I am Dr. 
Sam Varnado, Director of Sandia National Laboratories' Information 
Operations Center. I have more than thirty years of experience in 
energy, information, and infrastructure systems development. I 
currently coordinate Sandia's activities in cyber security technology 
development, with special emphasis on critical infrastructure 
protection applications.
    Sandia National Laboratories is managed and operated for the 
National Nuclear Security Administration (NNSA) of the U.S. Department 
of Energy (DOE) by Sandia Corporation, a subsidiary of the Lockheed 
Martin Corporation. Sandia's unique role in the nation's nuclear 
weapons program is the design, development, qualification, and 
certification of nearly all the nonnuclear subsystems of nuclear 
warheads. We perform substantial work in programs closely related to 
nuclear weapons--including intelligence, non-proliferation, and treaty 
verification technologies. As a multiprogram national laboratory, 
Sandia also conducts research and development for other federal 
agencies when our special capabilities can make significant 
contributions.
    My statement will describe SCADA systems, identify some of the 
threats they face, describe some of the cyber vulnerabilities of these 
systems, discuss the consequences of disruptions, and explain Sandia's 
contributions and capabilities in SCADA system security. I will also 
comment on the gaps in current approaches to the problem, possible 
solutions, and needs that Congress might choose to address.

What Are SCADA Systems and How Are They Used in Critical Infrastructure 
Applications?
    Both the national security of the United States and the well being 
of our citizens are highly dependent on the reliable operation of the 
nation's critical infrastructures. These infrastructures include 
electric power, oil and gas, banking and finance, transportation, 
telecommunications, and other networks. The operation of most of these 
infrastructures is controlled by SCADA systems. These systems are 
highly vulnerable to a wide range of threats, including terrorism. As 
an example, we have shown that it is possible to turn out the lights in 
most major U.S. cities through cyber attacks on SCADA systems. 
Disruption of these systems by any means will result in substantial 
economic loss, potential loss of life, long recovery times, and severe 
disruption of the lives of our citizens.
    We should note that we use the term ``SCADA'' to include all real-
time digital control systems, process control systems, and other 
related technologies. The control processes for each infrastructure are 
automated systems that combine humans, computers, communications, and 
procedures. Automated systems are used to increase the efficiency of 
process control by replacing high-cost personnel with lower cost 
computer systems. The widespread use of SCADA systems makes them 
critical to the safe, reliable, and efficient operation of physical 
processes common to most infrastructures.
High Level SCADA Vulnerabilities
    SCADA systems have generally been designed and installed with 
little attention to security. Terrorist groups are aware of this. As 
noted in an article in the June 27, 2002 Washington Post, these systems 
have been targeted by al-Qa'ida terrorists. Some government experts 
have concluded that the terrorists hope to use the Internet as an 
instrument of bloodshed by attacking the juncture of cyber systems and 
the physical systems they control. The article further postulated that 
combined cyber and physical attacks could produce nightmarish 
consequences.
    Sandia has been investigating vulnerabilities in SCADA systems for 
over ten years. During this time, many have been found. Our red team 
assessments show that security implementations are, in many cases, 
nonexistent or poorly implemented. Many of the older SCADA systems are 
operated in a stand-alone mode; that is, they are not connected to the 
Internet or to other corporate systems. Even so, these legacy systems 
have vulnerabilities, including inadequate password policies and 
security administration, no data protection mechanisms, and information 
links that are prone to snooping, interruption, and interception. When 
firewalls are used, they are sometimes not adequately configured, and 
there is often a ``back-door'' access because of connections to third-
party contractors and maintenance staff. We have found many cases in 
which unprotected remote access allows users to circumvent the 
firewall. In addition, most of the SCADA manufacturers are foreign-
owned.
    In summary, it is easy for adversaries to take control of these 
legacy systems and cause disruptions with significant consequences. 
Today, the legacy systems are gradually being replaced by new SCADA 
systems that use the Internet as the control backbone. This change is 
being implemented to reduce cost and increase efficiency of operation. 
However, this trend substantially increases the possibility of 
disruptions because (1) the number of people having access to the 
system is substantially increased, (2) disruptions can be caused by 
hackers who have no training in control systems engineering, and (3) 
the use of the Internet exposes SCADA systems to all the inherent 
vulnerabilities of interconnected computer networks that are currently 
being exploited by hackers, organized crime, terrorists organizations, 
and nation states. Worms, viruses, network flooding, no-notice attacks 
through compromised routers, spyware, insider attacks, data 
exfiltration by outsiders who gain insider privileges (phishing), and 
Distributed Denial of Service attacks are all commonplace. Effectively 
combating these attacks requires increased awareness, new technology, 
and improved response and recovery capabilities.
    Especially vulnerable is the electric power grid. Under 
restructuring, the grid is now being operated in a way for which it was 
never designed. More access to control systems is being granted to more 
users, the demand for real-time control has increased system 
complexity, and business and control systems are interconnected. In 
many cases, these new systems are not designed with security in mind. 
More vulnerabilities are being found, and the opportunities for 
disruptions are increasing rapidly. The complexity of the systems and 
the high degree of interdependency among the infrastructure sectors can 
lead to cascading failures in which failures in one sector can 
propagate to others.
    Sandia has identified the vulnerabilities of SCADA systems and 
summarized them in a report--''Common Vulnerabilities in Critical 
Infrastructure Control Systems''--that is available from our Center for 
SCADA Security website (http://www.sandia.gov/scada). The report 
identifies the vulnerabilities that we uncovered in our red team 
assessments of systems in use by a diverse set of customers from the 
electric power, petroleum, natural gas, and water infrastructures. This 
document has been made available to other government agencies and to 
private industry.

SCADA Threats
    Sandia performs vulnerability assessments using a red team process 
that models adversarial capabilities and approaches. It is essential to 
view SCADA systems from an adversarial perspective in order to identify 
their important vulnerabilities. We use adversarial modeling as a way 
of understanding threats from different political, social, and 
motivational structures so that relevant characteristics may be 
utilized to identify the classes of attacks that each adversary might 
be able to launch. Hackers, organized crime, cyber terrorists, and 
nation states are examples of different classes of adversaries with 
varying capabilities and attributes.
    We consider two basic categories of adversaries: ``outsiders'' and 
"insiders." It is generally the goal of an outsider to acquire the 
attributes of an insider through such means as hijacking connections, 
password sniffing, and identity theft. Most U.S. critical 
infrastructure owners and operators have only a passing knowledge of 
the nature of the adversaries' capabilities. Consequently, the level of 
protection is low and the probability of significant disruptions is 
high. Critical infrastructure owners and operators need to increase 
their awareness of both the vulnerabilities and the threat. They also 
need training in network defense, information about improvements in 
cyber security technology for control systems, and timely updates on 
threat information.

SCADA Attack Consequences
    The consequences of disruptions to SCADA systems are numerous, 
expensive, and varied. Two examples are presented here simply to make 
the point that we must start thinking seriously about the security of 
SCADA systems.
    In his book, At the Abyss: An Insider's History of the Cold War, 
Thomas C. Reed (former National Security Council member and Air Force 
Secretary) reported that in June 1982 the CIA, through exploitation of 
software transferred to the Soviet Union, created a damaging attack on 
Soviet pipeline systems. The software that was used to run the pumps, 
turbines, and valves of the pipeline was programmed to malfunction 
after a specific time interval. The malfunction caused the control 
system to reset the pump speeds and valve settings to produce pressures 
beyond the failure ratings of the pipeline joints and welds. The result 
was the largest non-nuclear explosion and fire ever seen from space. 
There were no physical casualties, but the goal of economic damage was 
met. This story is an excellent example of the type of attack that can 
be accomplished by a nation state.
    In January 2003, when the SQL Slammer worm began attacking computer 
networks around the world, users of the business network at Ohio's 
Davis-Besse nuclear power plant began to notice a network slowdown. 
Investigation revealed the worm had spread from the plant's business 
network to its operations network, causing enough congestion to crash 
the computerized panel used to monitor the plant's most crucial safety 
indicators. Minutes later, the Plant Process Computer, another 
monitoring system, crashed as well. The plant's firewall had initially 
blocked Slammer, but the worm still managed to reach the plant through 
a high-speed connection from an unsecured contractor's network. Had the 
plant's operations network been properly protected from either the 
contractor's network or the plant's own business network--or had the 
plant operators installed Microsoft's patch to prevent the Slammer 
infection (released six months earlier)--the infiltration would not 
have happened. Fortunately, the incident did not result in disaster 
because the plant was off-line at the time, for regular maintenance, 
and the crashed monitors were being backed-up by analog counterparts..
    These two incidents exemplify the potential consequences of 
inadequate cyber security processes. We should regard them as warnings.

Sandia's Contributions to Critical Infrastructure Control System 
Protection
SCADA Security and Standards
    During the Clinton administration, Sandia was heavily involved in 
supporting the President's Commission on Critical Infrastructure 
Protection. That activity, along with our experience in providing 
secure information systems for nuclear weapon command and control 
systems, provided impetus for our initial work in SCADA security. We 
began our work with laboratory directed research and development (LDRD) 
funds, and we initiated development of a laboratory SCADA test bed in 
1998. At that time it was difficult to convince others of the 
implications of SCADA vulnerabilities, so we also engaged the standards 
community. Standards are necessary for improving the security of 
distributed, networked systems. Because many SCADA equipment 
manufacturers are foreign owned, the only way to provide trusted 
systems is through the application of standards. Sandia was designated 
by the DOE to be the U.S. representative to the International 
Electromechanical Committee standards working group, TC57. We are 
expanding our efforts, in collaboration with other national 
laboratories, by engaging other standards groups like AGA 12-1 
(``Cryptographic Protection of SCADA Communications''), API 1164 (``API 
Security Guidelines for the Petroleum Industry''), and ISA SP99 
(``Manufacturing and Control System Security''), as well as various 
IEEE working groups.
    Sandia maintains strong research and development programs in 
cryptography, network security, secure network architecture design, 
wireless network security, threat assessment, and intelligent agent-
based security approaches. This work is coordinated by our Center for 
SCADA Security, which was established in 2000.

Red Team and Assessments
    Sandia also performs vulnerability assessments of critical 
infrastructure systems from both cyber and physical security 
perspectives. We have completed vulnerability assessments of a number 
of dams in the western United States. We have also assessed the 
vulnerability of networks used by a number of banks and by the 
Strategic Petroleum Reserve. We have worked with the electricity and 
oil and gas sectors to improve the robustness of their SCADA systems. 
As a result of these experiences--as well as our own strategic 
planning, our LDRD investments, and the foresight of sponsors to invest 
resources toward critical infrastructure protection--Sandia was in a 
position to immediately address some of the urgent needs following the 
events of 9/11.
    For example, we quickly developed a self-assessment methodology 
called RAM-W for water treatment facilities; this effort was sponsored 
by both the Environmental Protection Agency and the American Water 
Works Association Research Foundation. We also developed training 
classes on assessing SCADA systems for use in training our own staff. 
We now provide this training to industry, and we promulgate best 
practices to industry for securing SCADA systems. These and other 
contributions to critical infrastructure protection are possible 
because of strategic planning conducted years ago that led to early 
investment in the capabilities needed to respond. We also continue to 
invest LDRD funds in areas of urgent need. Examples include the 
integration of cyber and physical security technology, cryptographic 
solutions for SCADA system communications, modeling and simulation of 
infrastructure elements, secure control of micro-grids, SCADA 
forensics, and application of new network security technologies to 
SCADA systems.

Partnering Activities
    In 2004, the DOE and the National Energy Technology Laboratory 
funded the National SCADA Test Bed (NSTB), which is an activity of the 
Center for SCADA Security at Sandia. Sandia and Idaho National 
laboratories were designated as co-leads of this effort. Other partners 
include Argonne National Laboratory, Pacific Northwest National 
Laboratory, and the National Institute of Standards and Technology. The 
goals of the NSTB are to raise awareness of, and demonstrate the need 
for, improved security. The approach is to demonstrate credible threats 
against critical infrastructures and conduct vulnerability assessments 
of SCADA systems. We also develop, in collaboration with industry, risk 
mitigation strategies for current SCADA systems. We are developing new 
architectures for future secure infrastructures, and we are supporting 
the development of national guidelines and standards for secure SCADA 
design and implementation.

Internal Sandia Programs
    A number of Sandia facilities support the SCADA security effort, 
including the Distributed Energy Technology Laboratory, which provides 
a platform to test the control of operational generation and load 
systems. We also have a Network Visualization Laboratory that provides 
both visualization and network modeling capabilities, a Cryptographic 
Research Facility that supports research and development of 
cryptographic methods for SCADA networks, an Attack Resource Center 
that provides tools to attack and analyze SCADA vulnerabilities, and an 
Advanced Information Systems Laboratory that supports research and 
development of intelligent agent technologies that may provide self-
healing infrastructures in the future.
    Sandia also sponsors a nationally recognized College Cyber Defender 
program that trains university students to protect electronic 
information and defend computer systems and networks from cyber 
attacks. The program encourages a pipeline of qualified candidates in 
the fields of cyber security and protection to address Homeland 
Security and national security needs.

Research
    The Department of Homeland Security has funded the Institute for 
Information Infrastructure Protection (I3P) to conduct research in 
SCADA security in order to improve the robustness of the nation's 
interdependent critical infrastructures. Sandia is the team lead for 
this project, which includes faculty and staff from ten institutions 
individually recognized for their expertise in cyber security and 
critical infrastructure research: Sandia, University of Virginia, New 
York University, University of Tulsa, Pacific Northwest National 
Laboratory, Massachusetts Institute of Technology's Lincoln Laboratory, 
SRI International, MITRE, University of Illinois at Urbana-Champaign, 
and Dartmouth College. The institute is presently researching the 
following six high-priority tasks:
        Task 1: Assess dependence of critical infrastructures on SCADA 
        and its security.
        Task 2: Account for the type and magnitude of SCADA 
        interdependencies.
        Task 3: Develop metrics for the assessment and management of 
        SCADA security.
        Task 4: Develop inherently secure SCADA systems requirements.
        Task 5: Develop cross-domain solutions for information sharing.
        Task 6: Transfer technology of these solutions into industry.
    The institute represents the type of collaboration needed among 
private stakeholders, academia, government agencies, and national 
laboratories to solve the complex problem of SCADA security.

Suggestions for Addressing Critical Infrastructure Control System 
Problems
    Private industry owns about eighty-five percent of U.S. critical 
infrastructure assets. Industry, therefore, has a key role in 
implementing protection strategies. Currently, the business case (i.e., 
return on investment) for industry to invest in increasing the security 
of their information systems has not been convincingly made. Part of 
the reason is that no one has been able to clearly define a specific 
threat. In the past, industry has demonstrated its willingness to 
invest in protection when faced with a specific threat. The best 
example of this is the hard work and dedicated effort that industry 
provided to counter the Y2K threat.
    Although we know that many threats exist, specific details are 
elusive. It may be that we will need to take a consequence-based 
approach--rather than a threat-based approach--to provide the rationale 
for the business case. This approach would involve identification of 
specific portions of information systems affected by specific attacks. 
It would require vulnerability assessments, analyzing the consequences 
of disruptions in economic terms, and defining and implementing 
optimized protection strategies based on risk assessments. The national 
laboratories use sophisticated means to develop simplified assessment 
and risk survey processes, like the RAM-W work at Sandia. Risk 
assessment methodologies can quickly and more broadly identify the 
current security conditions and help decision-makers plan the most cost 
effective steps to improve a particular infrastructure's security 
posture. Increased emphasis should be placed on public-private 
partnerships in order to make this process efficient.
    When considering solutions, the difference between levels of 
threats needs to be considered. The current emphasis by industry is to 
try to eliminate inherent vulnerabilities that are present in all 
networked computer systems. Hackers and hacker coalitions view these 
vulnerabilities as low-hanging fruit. They exploit them to steal 
information and identities and/or to deny or disable processes. There 
is recent evidence that organized crime is also exploiting these 
vulnerabilities for extortion purposes. Academia and the industrial 
information security groups are working to provide technology solutions 
to counter the lower level threat. Until those solutions arrive, all 
critical infrastructure providers should apply best practices for 
defense against inherent system vulnerabilities. These practices should 
include development of security policy as well as technology solutions 
to provide a sustainable security environment.
    At the same time, terrorists and nation states are developing 
attack methods that are much more sophisticated, often covert. We need 
new efforts to identify, characterize, and counter these threats. 
Perhaps this is the proper role for government agencies with technical 
support from the national laboratories. In that case, the government 
agencies and national laboratories that are working on high-end 
defensive solutions will need to establish a plan for technology 
transfer to industry, because the methods used by today's sophisticated 
adversary will at some point be available to the lower level threat 
community.
    It is clear that successful defense of the nation's infrastructure 
will require increased interagency cooperation. For example, the 
Department of Defense (DoD) has a vital interest in the reliable and 
secure operation of the nation's critical infrastructures because the 
U.S. military depends on both domestic and international 
infrastructures to conduct its missions. Thus the DoD has a keen 
interest in protecting the SCADA systems that monitor infrastructures, 
and cooperation with other U.S. agencies will be vital to its mission 
success.
    The Department of Homeland Security (DHS) is already working with 
the DOE on cooperative interagency projects like the National SCADA 
Test Bed and the DHS's SCADA security programs. These two agencies 
should continue their cooperative efforts to ensure that work is 
coordinated effectively, all threats are considered, the best 
technology is used, and duplication of effort is avoided. The 
collaborations and partnerships called for in Homeland Security 
Presidential Directive 7 (Critical Infrastructure Identification, 
Prioritization, and Protection), along with the roles and 
responsibilities described there, are key to accomplishing these goals.

Recommendations
         Reaffirm the concept of public-private partnerships 
        and encourage participants to share information on threats, 
        vulnerabilities, consequences of outages, training, and 
        technology. Extend these partnerships to assist industry in 
        making the business case for investments in security upgrades.
         Increase funding for improvements in cyber security 
        technology, for example: tools for high speed intrusion 
        detection systems, software assurance, attack attribution and 
        trace-back, security modeling of existing and proposed SCADA 
        systems, network visualization for mapping cyber disruptions, 
        triage of threat scenarios across many vectors, and methods for 
        assuring the reliable performance of COTS products.
         Establish and fully fund additional work that provides 
        defense against sophisticated threats.
         Continue Congressional support of the initiatives and 
        directives described in the National Strategy for the Physical 
        Protections of Critical Infrastructures and Key Assets, the 
        National Strategy to Secure Cyberspace, Homeland Security 
        Presidential Directive 7, the Interim National Infrastructure 
        Protection Plan, and associated Sector Specific Plans.
    Thank you, Mr. Chairman. I would be pleased to respond to any 
questions you may have.

                              ATTACHMENTS

           Supplemental Statement of Dr. Samuel Glenn Varnado

                      Sandia National Laboratories

    Summary of Major Points
         The nation's infrastructure is highly vulnerable to 
        cyber threats. Supervisory Control and Data Acquisition (SCADA) 
        systems are prime targets for hackers, terrorists, and nation 
        states.
         U.S. computer networks are under daily attack. 
        Adversaries are becoming more sophisticated. We are seeing 
        structured, well-resourced attacks that are designed to steal 
        information or disrupt and/or deny processes.
         Information technology vendors release four new 
        vulnerability announcements each day. At the same time, new 
        attack methods are proliferating. For example, Super Slammer, a 
        fast worm, infected 60% of the Department of Defense's (DoD's) 
        NIPRNET (Unclassified but Sensitive Internet Protocol Router 
        Network) machines in eight minutes.
         Most of the current emphasis in the cyber security 
        community is on responding to hacker incidents. This effort is 
        necessary and useful; however, the work has a short-term focus. 
        We must mature our thinking in the area of enterprise-wide 
        network defense strategies. In addition, more complicated 
        threats such as terrorism and nation state actors must be 
        addressed.
         We have no alternative to the use of Commercial Off 
        the Shelf (COTS) products in all our information systems. Most 
        of these hardware and software products are manufactured in 
        countries whose interests do not always align with those of the 
        United States.
         We must understand that we will be attacked. What are 
        the implications of that understanding, and what strategies do 
        we have in place to operate through the attacks in order to 
        implement recovery and response activities?
         We need to expand our investment in cyber security 
        technology development in order to address the new threat and 
        vulnerability environments.
         We must encourage more public-private partnerships to 
        share threat, consequence, and vulnerability data and to 
        implement cost effective security solutions.
         We must help industries develop a business case for 
        their investment in SCADA security.
         Sandia National Laboratories has been working to 
        improve the security of SCADA systems for over ten years. We 
        have invested laboratory directed research and development 
        (LDRD) and other appropriate sponsor-provided funds into 
        technologies that have direct application to homeland security 
        and infrastructure protection.

    Mr. Lungren. The Chair would now recognize Dr. K.P. Ananth, 
Associate Laboratory Director for National Homeland Security at 
the Idaho National Laboratory, to testify.

   STATEMENT OF K.P. ANANTH, ASSOCIATE LABORATORY DIRECTOR, 
   NATIONAL AND HOMELAND SECURITY, IDAHO NATIONAL LABORATORY

    Mr. Ananth. Thank you, Chairman Lungren and distinguished 
members of the homeland security subcommittee. I am K.P. 
Ananth, Associate Lab Director for National and Homeland 
Security at the Idaho National Laboratory, a DOE national lab. 
It is a pleasure for me to appear before you to represent the 
work carried out at INL in support of our national efforts to 
protect critical infrastructure. In this testimony I will give 
you a short summary of our unique capabilities related to 
SCADA, critical infrastructure protection, and cybersecurity, 
the work we do and the challenges we face.
    For the last half century, INL has played a key role in the 
energy security and national security of the U.S. through its 
pioneering work in nuclear reactors, nuclear power and nuclear 
ship propulsion, and, as a result, developed a significant 
infrastructure with one-of-a-kind test beds and facilities on a 
secure 890-square-mile complex in Idaho. The written testimony 
provides details on many of the facilities, but I will focus 
here on those assets directly related to improving 
cybersecurity and a critical infrastructure protection mission.
    Process control systems in SCADA at the INL include a 61-
mile, 138-kilovolt transmission line with seven substations and 
a power distribution control center, a pilot chemical plant, 
and significant cybersecurity capabilities. We have 10 SCADA 
test beds with plug-and-play capabilities that a system might 
need for evaluation. These test beds are secure to protect 
vendor systems and information and have connectivity to the 
test range.
    Additionally, we work with the global commercial vendors 
such as ABB, AREVA, GE, Siemens and others, and we enable our 
work through these vendor systems to look at the system 
vulnerability and to improve cybersecurity.
    Additionally, INL's low radio frequency background, 
combined with our NTIA status and access to major telecom 
vendors, enables INL to address risks and improve robustness of 
communication links. This portfolio of unique test beds 
complemented with our experienced staff and our collaborators 
in the national laboratories, academia and industry serve as a 
national resource for critical infrastructure protection.
    Now I will touch upon the key programs we have and results. 
The DHS program known as US-CERT Control Systems Security 
Center is aimed at improving control systems security across 
all critical infrastructure sectors. Key accomplishments 
include design of a cybersecurity framework and self-assessment 
tool for industry that is being validated by industry and NIST. 
This will be piloted in fiscal year 2006.
    We support US-CERT in handling control systems-specific 
incidents and events, preparing bulletins and support for 
reported events. We have expanded the cyber test bed with three 
fully functioning systems and tested control systems of vendors 
showing vulnerabilities and shared them with industry. We have 
provided training and tabletop demonstrations at 9 U.S. 
locations to 460 end users.
    The DOE program known as the SCADA Test Bed performs 
testing and analysis focused on the energy sector. We have 
identified key vulnerabilities in four major control systems 
used in the electric sector and worked with vendors to develop 
fixes. We have shared findings with over 200 representatives of 
100 major industry owner user groups through invited 
participation. We provided SCADA security NERC-certified 
training and other courses to over 350 participants. Through 
these programs we have helped industry develop and deploy more 
secure digital control SCADA systems and evaluated technology 
from providers representing 80 percent of the control systems 
market for the electric grid.
    Now I will move on quickly to the challenges. Increased 
connectivity. As my colleague mentioned here, control systems 
today are susceptible to security threats due to open industry 
protocols and access to control systems information via public 
networks, legacy systems. Many of the older control systems 
with long life cycles did not consider cybersecurity; hence, 
they are vulnerable.
    Deregulation. Utility deregulation has increased the number 
of entities involved in the power life cycle, from generation 
to transmission, distribution, marketing and billing. 
Consequently there is increased connectivity and increased 
potential for cyberattacks via corporate networks.
    Offshore reliance. Again, cost pressures and technology 
support constraints have driven companies to go abroad, again 
causing security vulnerabilities.
    And the need for information sharing is also critical.
    Although these challenges are numerous, they are 
surmountable, and we have got some recommendations that are in 
the written testimony that you will see.
    Mr. Chairman and distinguished members of the group, we 
invite you to visit Idaho, see the test bed and the work we do 
in supporting the Nation's infrastructure problems. Thank you.
    Mr. Lungren. Thank you very much, Doctor.
    [The statement of Mr. Ananth follows:]

                 Prepared Statement of Dr. K.P. Ananth

    Chairman Lungren and distinguished members of the Homeland Security 
Subcommittee:
    I am Dr. K. P. Ananth, Associate Laboratory Director for National 
and Homeland Security at the Idaho National Laboratory (INL), a DOE 
national laboratory. It is a privilege and honor for me to appear 
before you to represent the work being carried out at INL in support of 
our national efforts, undertaken in both the federal and private 
sectors, to protect U.S. critical infrastructure. In this testimony, I 
will give you a brief background on INL and its mission, and a summary 
of our unique capabilities as they relate to Supervisory Control and 
Data Acquisition (SCADA), Critical Infrastructure Protection (CIP) and 
Cyber Security. I will also discuss key federal and commercial programs 
carried out at the Laboratory to support industry and end users, and 
identify the challenges we face along with some recommendations.

INL and its Mission
    The Idaho National Laboratory had its origin as the National 
Reactor Testing Station in 1949 in Idaho Falls with a mission to 
design, engineer, develop a prototype, and test an electricity 
producing nuclear reactor. Within two (2) years, in December 1951, INL 
successfully demonstrated the first electric power reactor and, soon 
thereafter, developed the first prototype nuclear reactor for the 
nuclear submarine Nautilus. For more than 50 years, the laboratory has 
been a critical asset within the National Laboratory system as an 
engineering, prototyping and testing resource, with 52 reactors built 
and operated on the 890 square mile reservation in southeastern Idaho. 
Beginning in the 1950s, the Laboratory began to support major 
Department of Defense programs, including training of thousands of Navy 
nuclear operators; earlier the Laboratory was involved in the 
development and testing of naval guns and ordnance. In 1985, the 
Laboratory was selected to produce armor for the Army's Abrams tank 
using depleted uranium, and earlier this year we successfully completed 
our twentieth anniversary on the program.
    To support these varied missions, INL has developed a significant 
infrastructure on the Idaho desert. INL carries the distinction of a 
vast, remote, and secure heavily-invested site complex with ``one-of-a-
kind'' test beds and facilities for nuclear research and development 
(R&D), explosives detection and testing, unmanned aerial and ground 
vehicles payload testing, physical security, cyber security and 
critical infrastructure protection. Mindful of the rich assets at INL, 
the Department of Energy issued a Request for Proposal (RFP) in 2004 to 
manage and operate INL with the mission of ensuring the nation's energy 
security with safe, competitive, and sustainable energy systems and 
providing unique national and homeland security capabilities. Two areas 
were specifically called out within national and homeland security for 
the Laboratory: nuclear nonproliferation and critical infrastructure 
protection. On February 1, 2005, the new contract to operate the 
Laboratory was implemented, making the critical infrastructure 
protection mission of the Idaho National Laboratory unique within the 
National Laboratory system. We are hard at work fulfilling this 
mandate.
    Today I will focus on how we are leveraging our efforts with DHS 
and DOE in the area of improving control systems security across all 
critical infrastructure sectors by reducing cyber security 
vulnerabilities and risk.

    INL's Unique Assets
    With more than five decades of experience in establishing, 
developing and maintaining critical infrastructure systems, INL has 
created several recognized and integrated capabilities to provide real 
solutions to our customers in critical infrastructure protection and 
cyber security. INL has focused in three major areas--process control 
systems, cyber security, and wireless technology.
    Process Control Systems (PCS) and SCADA--Our location and 
operational infrastructure provides the ultimate proving ground for 
analysis and assessment of real-world critical infrastructure 
components. INL has become the logical home for significant portions of 
the National SCADA Test Bed and has become the focal point for research 
and testing of control systems and cyber security with a direct benefit 
of increasing the security of these systems. INL operates a power 
distribution control center, a pilot chemical plant, and 61 miles of 
138 kV transmission line with seven substations and a dedicated control 
room on our 890 square mile site. It is the combination of this 
infrastructure, a program with current access to commercial control 
systems from principal global vendors (e.g., ABB, AREVA, GE, METSCO, 
Micro Motion, [Emerson], Rockwell Automation, Siemens), and our 
research expertise and partners that enables us to conduct offline and 
full-scale testing in a real life environment. This unique capability 
is helping to research and develop solutions that will strengthen our 
nation's industrial control systems and physical components of our 
infrastructures from attacks by viruses, hackers, and terrorists.
    Cyber Security--the INL Cyber Security Group's intimate familiarity 
with various hacker methodologies enables us to generate exploits and 
assessment tools for use in testing the security of Critical 
Infrastructure control system environments. Focused on multi-tier 
attack vectors and full spectrum threat actors, the team provides a 
credible representation of cyber threats and then conducts cutting edge 
research into advanced mitigation strategies and solutions. Coupled 
with our academic and industry partners in this area, we are striving 
to effectively address current challenges while advancing the state-of-
the-art in detecting hacker signatures. We have invested resources to 
explore the cyber security vulnerabilities of Portable Electronic 
Devices (PEDs) technology. INL is pursuing commercial and government 
partnerships to address vulnerabilities in PEDs technology because 
these devices are becoming more prolific and have crept into new 
control systems.
    Wireless Technology--INL's Wireless Test Bed and telecommunications 
infrastructure provides access to advanced, next generation 
communication technology and current communication systems to analyze 
vulnerabilities, analyze new protocols and operational performance, and 
develop risk mitigating solutions. INL's location providing a low RF 
background, our National Telecommunications and Administration (NTIA) 
experimental radio station status, full-scale isolated communications 
networks, and ability to connect to functional systems has attracted 
industry (e.g., Bechtel Telecommunications, Nokia, AT&T Wireless) and 
government customers. Bechtel Telecom, through a Cooperative Research 
and Development Agreement (CRADA), has made a significant investment at 
the Laboratory in this area. These attributes afford us the unique 
opportunity to holistically analyze both performance and risk of entire 
systems, develop wireless security solutions for our nation's complex, 
interconnected infrastructures, and improve robustness of communication 
links for emergency responders.
    The importance of these core assets can not be overlooked, 
representing a national resource that provides access to control system 
hardware and applications, functioning transmission and distribution 
assets, wireless local and metro area networks, advanced radio, 
microwave, fiber optic and satellite communications, mesh networks and 
personal electronic devices (PEDs). Additional assets include unmanned 
aerial vehicles (UAVs), explosives detection, testing and blast 
mitigation systems. Perhaps more importantly, our current network of 
industry participants and top shelf researchers across the nation 
enable INL to address the most challenging issues in CIP.
    These are the elements--housed in our comprehensive test range, 
designed to be full-scale in nature, representative of real world 
infrastructures and capable of being isolated--that uniquely position 
the federal government, national laboratories, and industry to be 
successful in identifying and managing risk to our nation's critical 
infrastructure. To the best of our knowledge, there is no similar 
facility in the world. And, the cache of over 100 experienced 
scientists, engineers, and technicians working in INL's SCADA/Cyber 
Security groups are aware of the great responsibility that comes with 
managing these resources and the significance of our mission to assist 
in securing the control systems of our nation's critical 
infrastructure. With this knowledge, we have focused on developing 
extensive collaborations on our programs and continually strive to 
bring the best-in-class institutions to help in developing solutions to 
this complex challenge. Our collaborators in this area include other 
national laboratories, National Institute of Standards and Technology 
(NIST), American Society of Mechanical Engineers (ASME), 
Instrumentation Systems and Automation Society (ISA), Carnegie Mellon 
University (CMU), Dartmouth University (DU), University of Idaho (UoI), 
British Columbia Institute of Technology (BCIT), and others such as 
North American Electric Reliability Council (NERC), Electric Power 
Research Institute (EPRI), Chemical Industry Data Exchange (CIDX), 
Decision Analytics Corporation (DAC), KEMA Consulting and Bearing 
Point.

Key Programs Conducted at INL and Results Achieved
    Our two primary programs in Cyber Security and Critical 
Infrastructure Protection are with the Department of Homeland Security 
National Cyber Security Division and Department of Energy Office of 
Electricity Delivery and Energy Reliability. INL is supporting both 
programs with a team of talented people from other national labs, 
academia and industry based on their best-in-class core competencies 
and the needs of the program.
    The DHS program is known as the ``US-CERT Control Systems Security 
Center (CSSC) Program.'' This program is aimed at improving control 
systems security across all critical infrastructure sectors by reducing 
cyber security vulnerabilities and risk. One of the key tasks of this 
program was the design of a cyber security protection framework 
consisting of a comprehensive set of requirements, graded 
recommendations/solutions, and automated self-assessment tools for all 
sectors to use to enhance the security of their control systems (e.g., 
SCADA, DCS) against cyber attack. The draft framework was issued in 
July 2005 and reviewed with 20 industry control systems and cyber 
experts; and a second review occurred in August with several key 
industry security managers. Comments to date have been:
        ``. . . .framework provides a centralized, organized approach 
        to Control System security. . .''
        ``. . . .provides actionable recommendations. . .''
        ``. . . .provides a benchmark and metrics for cyber security 
        protection. . .
        ``. . . .will help consolidate the efforts by the Standard 
        bodies
        . . .''
        ``. . .provides for cross platform standardization across 
        vendor products
        . . .''
        ``. . . .impressed with the automated self-assessment tools 
        that will measure
        improvement
        over time
        . . .''
    We have plans to work with NIST and ISA over the next three months 
to assist us in implementing the cyber security framework for self 
assessment. We will also work with facilities in several key sectors in 
FY-06 to pilot and validate the framework. A key component of the self 
assessment will be a risk reduction tool that helps companies 
prioritize vulnerabilities that are found when assessing requirements 
and potential consequences.
    Additionally, the program also developed a quick response cell to 
support US CERT in handling control system specific incidents/events. 
We have assisted in preparing cyber security bulletins and providing 
Tier II support for reported events to the US-CERT.
    Over the last two years, we have collaborated with DHS and DOE to 
significantly increase the capabilities of our extensive cyber test 
bed. This capability includes ten (10) SCADA test beds and three (3) 
fully functioning systems that are ready and are currently testing 
vendor systems and specific tools to reduce cyber vulnerabilities. On 
the CSSC program, we are currently testing three (3) vendor control 
systems and have already identified significant vulnerabilities on the 
first two systems. The vendors are evaluating the results and our 
recommendations.
    The purpose of this program is to reduce risk to key infrastructure 
from cyber attack by enhancing the security of control systems. To that 
end, we have developed a risk assessment methodology for control 
systems to measure vulnerability reduction and we have developed 
decision analysis tools. We have started validating these tools by 
analyzing test results and attack scenarios.
    Our industry outreach efforts provide unique training by 
demonstrating how an attack may propagate through the business system 
to critical control systems with an emphasis on how to mitigate the 
effects of such an attack. These awareness demonstrations and training 
activities are ongoing with positive feedback from industry and 
government participants. The tabletop demonstrations have included live 
demonstrations of attacks/effects on small scale representative control 
systems for chemical and electric system processes and demonstrations 
of attack mitigation strategies. We have held these demonstrations at 
nine (9) venues across the U.S. with over 460 end users participating 
from a wide variety of industries to include control systems/cyber 
security organizations and federal, state and local government 
agencies.
    Through this program, we are also providing SCADA and process 
control security training for the protection of dams and hydroelectric 
facilities to system users in the Department of Interior's Bureau of 
Reclamation.

    The DOE program, known as the ``National SCADA Test Bed (NSTB) 
performs testing and analysis of SCADA systems representative of those 
used throughout the energy sector to identify, validate and reduce 
cyber vulnerabilities. The second objective is to identify best 
practices for design and deployment of secure control systems and to 
support institutionalization of those best practices in government and 
industry standards. The NSTB is a joint effort between Sandia National 
Laboratory and Idaho National Laboratory. The NSTB effort is managed by 
the INL and includes, Pacific Northwest National Laboratory (PNNL), 
Argonne National Laboratory (ANL), and the SCADA vendor community (ABB 
Network Management, AREVA T&D Automation, GE Energy Management Systems, 
Siemens Power Transmission and Distribution), as well as computer 
system vendors such as IBM, HP, and Sun Systems. Key accomplishments on 
this program include:
         The NSTB has identified SCADA vulnerabilities in the 
        four systems INL has tested, worked with the SCADA vendors to 
        define/develop fixes where needed, and verified the fixes 
        through follow-on testing. SCADA vendors have improved new 
        releases and developed patches to mitigate significant security 
        weakness. These risk reducing actions will directly benefit 
        many of the nation's critical infrastructure organizations.
         We have shared the findings from these SCADA system 
        vulnerability assessments, in various levels of detail, with 
        over 230 representatives from 100 major industry owner/user 
        organizations through invited presentations at SCADA vendor 
        users' group meetings.
         We have issued detailed test reports of the SCADA 
        assessments to the respective vendors. One of the vendors is 
        sharing their assessment report, under tight non-disclosure 
        agreements, with all interested users.
         Through the participation of SCADA vendors who have 
        been willing to loan their systems to INL on the NSTB program 
        for an extended time, we have established an extensive, 
        representative environment for searching out typical security 
        vulnerabilities and for testing solutions.
    We developed and presented a NERC-certified training course on 
SCADA security. Based on feedback from the initial presentation of 
various courses (NERC and others) to over 350 participants, we are 
expanding the content and are now responding to requests for additional 
presentations.

    Commercial Programs--INL has helped industry develop and deploy 
more secure digital control/SCADA systems, through vulnerability 
discovery, validation and mitigation, standards development and secure 
software technology.
    Specifically, the INL managed National SCADA Test Bed Program 
(NSTB) has worked with global control system software vendors to 
promote more secure , innovative installation and implementation of 
their products, where such efforts are consistent with recognized 
industry guidelines and best practices. The program has discovered 
existing weaknesses in deployed systems as well as design weaknesses in 
future control systems. The program has evaluated technology from 
providers representing 80% of the electrical grid control system 
market, working closely with engineering teams of four (4) global 
providers.
    We have worked with control system owners and operators across 
multiple sectors to evaluate and enhance security of existing 
technology deployments. These companies took advantage of the unique 
knowledge-base and trusted relationships at the Lab as an important 
element to their overall approach to critical systems risk management. 
Companies have also turned to us when things go wrong with the systems 
to assist in evaluating particular events to determine if directed or 
non-directed attacks might have occurred.
    With most of the critical infrastructure residing in the private 
sector we felt it was appropriate to submit just a few comments from 
the asset owners themselves. These perspectives come from private 
sector organizations from the trenches to the executive offices best 
demonstrating the value of government sponsored CIP initiatives at INL:
        1. David Norton, Transmission IT Security program manager for 
        Entergy--New Orleans (the second largest generator of 
        electricity in the U.S. delivering electricity to 2.7 million 
        customers), wrote ``We are in dire need of INL, its mission, 
        and its uniquely qualified staff. I know of no other entity in 
        North America doing anything like what they are doing in the 
        field of SCADA control system security, and certainly not to 
        the level of excellence that I and my peers in the industry 
        have witnessed.''
        2. Cheryl Santor, Information Security Manager, Metropolitan 
        Water in California (one of the largest water systems servicing 
        5,200 square miles in Los Angeles, Orange, San Diego, 
        Riverside, San Bernardino and Ventura Counties with 18 million 
        customers), wrote ``The INL provides a knowledge base from 
        which all organizations using SCADA and Process Controls can 
        benefit. . . .in order to secure their critical resources.''
        3. Phil Harris, CEO of PJM (Ensuring the reliability of the 
        largest centrally dispatched Control area in North America by 
        coordinating the movement of electricity in all parts of 
        Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New 
        Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, 
        Virginia, West Virginia, and the District of Columbia), wrote 
        ``PJM feels it is important that the Electric Sector, as a 
        Critical Infrastructure support INL and the work they do. There 
        is no substitute or other entity that is providing such quality 
        service of such national importance.''
        4. Another utility security executive from American Electric 
        Power recently testified to the value provided by INL through 
        the DHS and DOE program: ``The electricity industry is 
        interested in continuing to work closely with DOE on the work 
        being done at the Idaho National Laboratory. We believe it 
        holds great promise as one of the best and most efficient means 
        of stimulating research and developing technical solutions to 
        the present shortfalls in cyber security.'' [Hearing Before the 
        United States House of Representatives Science Committee, 
        September 15, 2005].

Key Challenges in CIP and Cyber Security
    As a result of operating and testing infrastructure systems, 
working with control system vendors and end users, INL is keenly aware 
of the key challenges in protecting critical control systems and the 
potential solutions to these complex challenges to ensure the security 
of our nation's critical infrastructure.

 Increased Connectivity--The use of open systems and more 
common technology combined with greater system access and available 
system knowledge has changed the risk profile of SCADA systems. These 
systems evolved in a less connected world relying on proprietary 
technologies which provided a sense of ``security through obscurity'' 
in the past. The control systems of today are more susceptible to 
security threats than before with SCADA vendors increasingly moving 
toward open industry standard protocols and platforms, system owners 
and operators providing greater access to market and accounting 
systems, regulatory requirements to share information and make systems 
available to all market participants and the greater use of public 
networks and wireless communications.

 Interdependencies--A further challenge arises from the 
reliance on telecommunication as an integral part of the overall 
control system. If SCADA and Energy Management Systems (EMS) are the 
brain stem and receptors of a control system, then Telecommunications 
represents the intricate network of nerve pathways that connects these 
operational assets, providing the means by which to deliver the control 
instructions and update system status. [The following provides a useful 
reference: Cyber Security: A Crisis of Prioritization, President's 
Information Technology Advisory Committee, February 2005]

 Complexity--A particular challenge is the complex and 
interconnected nature of critical control systems which can be found 
across many of the critical infrastructure sectors from directing 
advanced manufacturing systems to controlling the North American 
electric grid. If we focus on energy production and delivery, we find 
Process Control Systems (PCS) and specifically SCADA systems are used 
extensively throughout the electric, oil, and gas sectors to monitor 
and control processes that generate, transmit, transport and distribute 
energy.

 Legacy Systems--A significant portion of the control system 
technology in place today in many installations is old. These legacy 
systems were designed to operate over long lifecycles and were not 
designed with cyber security in mind. Hence, they are vulnerable to 
cyber attack and, in many cases, difficult to protect. In order to 
significantly lower the risk, we need to understand legacy system 
vulnerabilities and develop cost effective means to mitigate them 
without relying on new system deployments.

 Deregulation--Market forces, to include deregulation in the 
electric utility industry have increased the number of entities 
involved in the power life cycle from generation through transmission, 
distribution, metering, and billing; thus increasing reliance on and 
accuracy of information from third parties. Correspondingly, this has 
come with increased connectivity with outside vendors, customers, and 
business partners which have eroded the sanctity of the network 
perimeter. More connections through the perimeter inherently introduce 
more threats into the corporate networks.

 System Accessibility--The convergence of power company 
networks and the demand for remote access to these systems has rendered 
many SCADA systems accessible through non-SCADA networks. Specifically, 
connections between the grid and corporate networks for reporting 
purposes and outage management interfaces have the potential to expose 
the grid network to the threats experienced by the more common business 
network. [The following provides a useful reference: U.S.-Canada Power 
System Outage Task Force, August 14th Blackout: Causes and 
Recommendations, April 2004].

 Offshore Reliance--Cost pressures and technology support 
constraints have increased reliance on offshore development and system 
maintenance, thereby increasing the risk of intentional or 
unintentional security vulnerabilities. This risk is amplified as a 
result of ineffective/non-enforceable cyber laws in the respective 
offshore countries.

 Information Sharing--Finally, competitive pressure, legal 
liability risk and the lack of information protection mechanisms pose a 
significant barrier to information sharing between critical 
infrastructure stakeholders. This has significantly impeded the 
discovery and understanding of control system vulnerabilities, as well 
as the reporting of real-world incidents. [The following provides a 
useful reference: CRS Report for Congress – Government Activities 
to Protect the Electric Grid, October 2004]. On the other hand, the 
knowledge revolution that has accompanied the Internet makes it easy to 
locate specific information regarding SCADA and automation systems. For 
example, ``over 90% of major SCADA and Automation vendors have all of 
their manuals and specifications available online to the general 
public'' (SCADA Security Strategy, PlantData). Easy access of such 
information to potential threat actors is a concern.

Recommendations
    These challenges, although numerous and complex, are surmountable. 
There is an urgent need to accelerate the research, development, 
testing, and application of advanced control systems to enhance cyber 
security across the energy and other sectors. This need transcends 
individual companies, energy subsectors, and even the private sector. 
Toward this end, the Department of Homeland Security and the Department 
of Energy are supporting programs to facilitate and support risk 
reducing solutions. We, at INL, are focused on providing solutions to 
this key national need and have some recommendations for meeting the 
challenge.

SCADA/Cyber/Telecom Interconnect--We, as a nation, should develop an 
interdependent and inclusive view of control systems to include not 
only the SCADA systems but the cyber and Telecommunications functions 
that support them to ensure secure electrical power and industrial 
processes. SCADA, Cyber Security, and Telecommunications are areas 
where we must integrate research and testing efforts to understand how 
vulnerabilities impact the entire system. We at INL are already engaged 
with the telecommunication firms on interoperability and bandwidth 
issues, and we see the SCADA/Cyber/Telecom interconnectivity as the 
next area of pursuit.
    The 21st Century could be characterized as a globally 
interconnected ``flat world'' (courtesy of Tom Friedman), which means 
hierarchical systems have to yield to horizontal and partnership-based 
enterprises. To that end, critical infrastructure protection, cyber 
security, and telecommunications particularly call to attention the 
interdependence between providers and markets so industries have a 
responsibility to work across sectors, and the same holds for the 
federal government. Furthermore, in the event of a manmade or natural 
disaster as in Katrina, active coordination across sectors is vital for 
timely response and expeditious recovery.

Minimum Standards--The electric sector, being at the hub of all, is 
active in securing its cyber and physical resources. Interim cyber 
security standards are in place in the electric sector, and they are 
moving through the approval process for a permanent, more expansive CIP 
standard. The final product should strengthen cyber security across the 
electric sector and lay the groundwork for greater collaboration 
between industry and government. Similar efforts are underway through 
CIDX and much work remains to be done in all sectors of our 
infrastructure.

Develop Risk Assessment Tools--The federal government should continue 
to invest in the development of tools and provide required information 
to assist control systems security professionals to identify and 
address risk. Education and awareness efforts should be focused on 
developing an accurate understanding of risk to control systems. The 
NSTB Program and the CSSC program are both actively addressing this 
need and risk mitigation steps are beginning to be implemented at the 
user level.

Fixing Legacy Systems--Some type of incentive, either at the vendor 
level or user level, will go a long way to implement cyber security in 
legacy process control systems. Coupled with independent third party 
testing of the control system, through programs such as NSTB and CSSC, 
legacy systems could be upgraded with protective measures.

Information Protection--The electric infrastructure is one of the most 
critical infrastructures servicing the nation and maintaining our way 
of life. Certain technical, architectural and operational aspects and 
details must be kept secure so they will not be inadvertently disclosed 
to those who would try to disrupt or destroy our social, political or 
economic fabric. Yet there is a need to share the security aspects of 
the information with government and industry peers for benchmarking 
purposes while preserving competitive advantages. The same challenge 
applies to other sectors as well. This is an area where the use of 
trusted independent third party entities might prove beneficial and 
acceptable to all parties and merits further discussion.

Concluding Statement
    Mr. Chairman and distinguished Members of the Committee, we at 
Idaho National Laboratory are fully committed to deliver on this 
important national mission, and along side DHS, DOE, and industry, we 
will strive to make our Laboratory the Center of Excellence in critical 
infrastructure protection to help end users. We welcome you to visit 
the Idaho National Lab to see firsthand the solutions we are providing 
to make our infrastructure safer. Again, I thank you for the 
opportunity to share these comments with you.

    Mr. Lungren. The Chair would now recognize Dr. William 
Rush, institute physicist at the Gas Technology Institute, to 
testify.

STATEMENT OF WILLIAM RUSH, INSTITUTE PHYSICIST, GAS TECHNOLOGY 
                           INSTITUTE

    Mr. Rush. Good afternoon, Mr. Chairman and members of the 
committee. I would like to thank you very much for letting me 
testify on what I think is a really important topic. I am Bill 
Rush. I hold a Ph.D. in physics, and for the past 27 years I 
have been with the Gas Technology Institute, or GTI. I also 
chair the American Gas Association's Encryption Working Group, 
which is charged with developing cryptographic protection for 
SCADA communications.
    Today I am going to update you on the nuts and bolts of 
what it is that we have done to protect against cyberattack and 
recommend some specific steps for improving SCADA security.
    As you know, attacks against SCADA are of concern because 
SCADA is the remote control, if you will, of a network. It 
controls the circuit breakers and the valves. It is the actual 
``reach out and grab things'' part of the system. Most systems 
were designed before security was regarded as a serious concern 
and as a result are poorly protected against cyberattack. One 
team of U.S. network experts was into a SCADA system within 15 
minutes.
    Can cyberattack have real consequences? Absolutely. As Dr. 
Varnado pointed out, a 3-kiloton explosion, to put that into 
more usable or more familiar terms, that is about 1,000 times 
as powerful as the explosion that blew up the Murrah Federal 
Office Building in Oklahoma City.
    SCADA information has been found on captured al-Qa'ida 
computers. Three weeks after the 9/11 attacks, the American Gas 
Association chartered the AGA 12 Working Group to develop a 
standard to protect SCADA communications. The drawing that we 
have up here indicates basically how it works. What you do is 
originate a command, such as open the switch inside a secure 
facility. It then gets sent into a cryptographic module which 
changes the message, and as you can see across the bottom, it 
can't be read by anybody without a special number that is 
called a key. When it shows up on the other end, it is 
decrypted by the same key and turns back into the message, open 
the switch.
    AGA 12 team is proud of its progress to date, but this is 
not just a paper standard. This device that I have brought with 
me, and you can see it afterwards, is an AGA 12-compliant 
cryptographic module. This unit effectively slams the door in 
the face of those who would attempt to penetrate the 
communication networks of SCADA systems. Early versions of this 
equipment has performed well in the field tests. This unit is 
priced at about $500. It can be installed right now in most 
SCADA systems that operate on low-speed links. Nationally labs 
are in the process of evaluating its security level and its 
performance. At least two manufacturers will market AGA 12 
modules. No other standard groups can provide this protection 
today.
    While many groups contributed to AGA 12's success, none did 
more so than the Navy's Technical Support Working Group, or 
TSWG. TSWG funded GTI to work on AGA 12 full time. This allowed 
us to move far faster than any other all-volunteer groups.
    Note that AGA 12 is only one of dozens of groups who are 
involved in developing standards. There is a significant risk 
of developing conflicting standards. These volunteer groups 
lack the resources to coordinate their efforts. The DHS Process 
Control Security Forum and DOE's Roadmap are important examples 
of government and private sector coordination in cyber 
security.
    Regrettably, AGA 12 has become a victim of its own success. 
TSWG only funds prototypes until they succeed. When AGA 12 
passed this milestone last May, both funding and progress 
ceased with a serious loss of momentum. Our early success 
obscured the fact that critical work remains. DOE is providing 
some funding to go restart tests and to edit parts of AGA 12 
for publication, but there is still critical work, including 
developing a seal of approval conformance testing to show that 
a product such as this really meets the standard, sort of a 
Good Housekeeping seal of approval; next-generation designs to 
work faster and at half the cost; a major pilot test to 
validate that the technology really works; and remote key 
changing so you don't have to send staff out when you make 
changes; and forensic tools to find and prosecute attackers.
    In summary, we make the following recommendations: Fund R&D 
to develop protection against cyberattacks on the Nation's 
critical infrastructure. Prevent loss of momentum by avoiding 
program interruptions. This is very disruptive. Support the 
coordination effort, such as the Process Control Security Forum 
and the Roadmap. Complete the remaining AGA 12 work that I have 
just outlined. Support other selected standards works in 
addressing the many vulnerabilities that are beyond the scope 
of AGA 12.
    Mr. Chairman and subcommittee members, we applaud your 
focus on securing our Nation's critical infrastructure, 
especially the area of SCADA protection. I would be pleased to 
answer questions afterwards. Thank you.
    Mr. Lungren. Thank you very much, Dr. Rush.
    [The statement of Mr. Rush follows:]

               Prepared Statement of Dr. William F. Rush

INTRODUCTION
    Good afternoon Mr. Chairman and members of the Subcommittee. Thank 
you for the opportunity to address you today on this important topic. 
My name is Bill Rush and I hold the position of Institute Physicist 
with the Gas Technology Institute (GTI), where I have worked in the 
field of natural gas technology research and development for 27 years. 
GTI is a not-for-profit Research and Development institute 
headquartered in Des Plaines, Illinois. I also am the Chairman of the 
American Gas Association's SCADA Encryption Working Group. The American 
gas industry has charged this group with developing cryptographic 
protection for gas, water, and electric SCADA communications.
    The focus of my testimony today is to update you on the steps the 
American Gas Association AGA, GTI, and many other organizations have 
begun to take to protect SCADA communications from cyber attack. At the 
conclusion of my remarks, I will provide recommendations to the 
Subcommittee on what actions can be taken to further advance the 
security of industrial control systems for critical infrastructures.

SCADA SYSTEMS ARE OFTEN VULNERABLE TO CYBER ATTACK
    Supervisory Control And Data Acquisition (SCADA) systems are an 
important component of critical infrastructure. SCADA systems can be 
thought of as the ``remote control'' part of most gas, water, electric, 
and oil pipeline systems. SCADA Remote Terminal Units (RTUs) read the 
pressures, voltages, temperatures, and flows at critical points 
throughout the transmission and distribution portions of these critical 
infrastructure networks and transmit this real-time data back to 
central control rooms. They also operate valves, circuit breakers, and 
switches and are thus critical equipment for control of the systems. 
This remote control of unmanned facilities provides quick response to 
changing situations, while providing cost-effective operations of a 
multitude of critical equipment and stations, spread over a large 
geographic area. Many SCADA RTUs have ``maintenance ports'' that enable 
operators to change critical system parameters remotely, open or close 
valves or breakers, or download new firmware. There are strong 
similarities among gas, water, electric, sewage, and oil SCADA systems. 
Process automation and control systems used in other critical 
infrastructure applications, such as oil refineries and chemical 
plants, may not have the long-distance aspects of SCADA, but share many 
other characteristics.
    The cost constraints under which SCADA systems operate determine 
many of their security-related characteristics. Because SCADA systems 
are expensive to replace, they have long life times--typically between 
10 and 20 years. Consequently, many systems now in service have been 
there for a long time and will remain as legacy systems for some time 
to come. Consequently, today's SCADA systems are often based on 
technology which is a decade old. In particular, many of these systems 
operate at relatively low communication speeds over telephone modems, 
speeds which most Internet users of today find unacceptably slow.
    Because these systems were designed before critical infrastructure 
security was a major concern, they often have significant 
vulnerabilities to unauthorized electronic operations, referred to as 
``cyber attacks''. Many of the systems do not have effective password 
protection for access control or encryption for confidentiality of data 
and commands. When they use dial-in telephone modems, they often can be 
hacked from any computer with a phone modem. When the SCADA system uses 
radio communication, the radio waves can often be detected and altered 
by a third party with an appropriate, commercially available receiver/
transmitter. The question confronting skilled cyber attackers is less 
``Can we enter the system?'' and more ``How long will it take us to 
penetrate it?'' The North American Electric Reliability (NERC) is 
concerned about the ability of an attacker to use the maintenance ports 
to attack SCADA systems by making unauthorized changes in critical 
system parameters. Information on American SCADA systems has been found 
on captured al-Qa'ida computers.
    Cyber attacks are not simply minor incidents involving mildly 
annoying hackers, but can have significant operational, economic, and 
safety consequences. A single example that underscores this point is 
the Soviet Union's use of stolen American SCADA software during the 
1980's. This code--which had been deliberately modified to cause harm 
to a SCADA system--led to physical damage to the Soviet SCADA system 
resulting in an explosion large enough to be photographed from space 
and estimated at 3 kilotons TNT equivalent. (See ``At the Abyss: An 
Insider's History of the Cold War'', Thomas C. Reed, Ballantine Books, 
New York, 2004.) To put the 3 kiloton number into perspective, the 
Murrah Federal Office Building bombing in Oklahoma City was estimated 
at 0.002 kiloton and the Hiroshima nuclear bomb was between 14 and 20 
kilotons. The salient point is that it clearly is possible to cause 
significant physical damage to critical infrastructure if the SCADA 
code can be modified.

AGA 12 IS A STANDARD TO PROTECT SCADA FROM CYBER ATTACK
    Three weeks after the 9/11 attack, AGA chartered a working group to 
develop a comprehensive standard that would use cryptography to protect 
SCADA communications from cyber attack. This standard has been 
designated ``AGA 12''. When it is completed, it will be a comprehensive 
approach to SCADA cryptography. The charter instructed the working 
group to develop a recommended practice for the gas industry and to 
include water and electric SCADA systems as well. This approach also 
applies to sewage and oil pipeline SCADA systems. This effort has made 
such significant progress that we are now field testing commercial 
prototypes of products that use cryptography to protect SCADA 
communications.
    As a standard, AGA 12 has several significant characteristics. 
First, it is an open consensus standard that is designed to produce 
interoperable cryptographic products. ``Open'' means that anyone can 
use the standard to build equipment without needing to pay a royalty or 
licensing fee. Open here also refers to the process by which anyone 
with an interest in the topic can participate in developing the 
document. The working group included this requirement to encourage 
market competition to drive costs down, since no one has a monopoly 
position. The open-source code for implementing AGA 12 is available for 
free on the Internet. AGA 12 is a consensus standard because the 
working group develops consensus among its members and the AGA 
membership as well that its recommendations are indeed a sound 
practice. Finally, the standard specifies a minimum level of 
interoperability among products made by different manufacturers. Thus, 
users will have a choice of suppliers. The standard also assures that 
new products will remain compatible with earlier versions. Finally, AGA 
12 provides strong protection; it is based on well-established NIST 
encryption standards and has been examined for its ability to protect 
against a wide variety of attacks.
    AGA 12 is a suite of 4 documents, designated Parts 1 through 4. The 
four documents address different aspects of SCADA communication 
protection.
    AGA 12, Part 1 (AGA 12-1) summarizes cyber security policies, the 
background of the cyber security problem, and a procedure for testing 
cryptographic protection systems. This document educates SCADA 
operators on the need to do a risk assessment and recommends an 
approach for those utilities whose risk assessment reveals a need to 
protect their systems with cryptography.
    AGA 12-2 is a detailed technical specification for building 
interoperable cryptographic modules to protect SCADA communications for 
low-speed legacy SCADA systems and dial-up maintenance ports.
    AGA 12-3 will describe how to protect high speed communication 
SCADA systems.
    AGA 12-4 will describe how to build next generation SCADA systems 
so that their cryptography will be compatible with the legacy systems; 
this will ease the transition to the newer designs.
    Parts 1 and 2 are close to completion. Parts 3 and 4 are in the 
planning stage.
    Figure 1 illustrates both the configuration of a SCADA system and 
the scope of AGA 12. On the left is the Control Room, which is manned 
around the clock and where critical operational decisions are made. On 
the right is the ``Remote Terminal Unit'' (RTU), which is typically 
unmanned and controls the sensors and actuators that operate the 
critical infrastructure. Both the Control Room and the RTU are assumed 
to be secure. The AGA 12 working group deals only with the issues of 
security of messages while they are in transit over an insecure network 
and leaves to others the responsibility for securing the rest of the 
system.
    It is important to recognize that while cryptographic protection of 
SCADA communications is an important weapon in the arsenal of tools 
that can protect SCADA, it is only one tool among many that are needed. 
Cryptography can not provide any protection at all against many kinds 
of attacks. In particular, it does not protect against jamming or 
breaking the communication line, against physical attacks, or against 
many kinds of insider attacks. Nor does it protect local facility 
control systems1 that are often connected to SCADA systems, and usually 
offer additional independent vulnerabilities to cyber attack. These 
issues are being addressed by literally dozens of groups working in the 
security area. While I am focused only on the AGA 12 effort, I am 
pleased to report that there are so many security initiatives under way 
that coordinating their work is a major challenge. I would call your 
attention to both the Department of Energy's Roadmap to Secure Control 
Systems in the Energy Sector and the Department of Homeland Security's 
Process Control Systems Forum as good examples of how the Government is 
working effectively with the private sector to advance and coordinate 
the many security efforts that are now under way. I also call your 
attention to the Instrumentation, Systems and Automation Society's 
(ISA) ISA SP99 committee, ``Manufacturing and Control Systems 
Security''. This is a broad industry wide automation and control 
systems security standards effort that has published over 150 pages of 
guidance on how to establish automation systems security programs and 
available technologies to deal with unacceptable risks. Finally, the 
National Institute of Standards and Technology (NIST) has produced many 
standards on which AGA 12 has relied and operates the Process Control 
Security Forum (NIST PCSRF) which continues to advance putting the 
cause of cyber security on a firm basis.

AGA 12 SPECIFIES CRYPTOGRAPHY TO PROTECT SCADA COMMUNICATIONS
    AGA 12 uses cryptography to protect SCADA communications. Figure 2 
illustrates the basic idea of how this works. Data and commands (``Open 
Switch'' in this figure) originate inside of a secure facility, as 
illustrated in Figure 1. Prior to leaving the secure facility, the data 
or command is sent to a ``SCADA Cryptographic Module'' (SCM) which 
encrypts it. Essentially, this encryption step changes the message so 
that it can no longer be read by anyone without a special number, 
called a key. In operation, the encrypted message is sent over the 
insecure network in an unintelligible form. When it arrives at the 
designated secure facility, the key is used to decrypt the message, 
returning it to its original meaning, ``Open Switch''.
    The AGA 12 standard has gone to great length to assure that 
encrypted messages are very difficult for potential attackers to use to 
harm a system that uses SCADA. This ``link encryption'' approach has 
been used successfully for many years by the financial community to 
secure its transactions. While this discussion has only considered 
making the message hard to read, AGA 12 also makes it difficult to 
alter, forge, or record and replay a message. An important issue 
associated with AGA 12 is how these secret keys are managed. The keys 
must be changed periodically to prevent their being guessed or 
compromised. Different keys are used for employees with different 
responsibilities and different levels of authority. The authorization 
to use keys must, for example, be changed if an employee leaves. It is 
important to be able to do this without the expense of visiting the 
many distant sites that may be controlled by the SCADA system.
    Because of the long life of SCADA systems, the owners and operators 
of these systems urged the working group to focus first on the 
challenging problem of protecting legacy systems. Focusing on next-
generation SCADA systems first would leave the legacy systems 
unprotected for many years. Protecting legacy systems, however, 
required developing cryptographic modules that will support most of the 
roughly 150 types of existing SCADA systems, each of which has a 
different ``SCADA language'' and which operate at different 
communication speeds and over a wide variety of communication media 
(such as telephone, radio, and microwave.) The next steps are to 
develop the same standard protection for high speed and next generation 
SCADA systems.

AGA 12 HAS MADE RAPID PROGRESS FOR A STANDARD
    AGA 12 has made rapid progress, given the constraints that an open 
group is developing a consensus standard. This is a process that is 
generally slow for two reasons. First, developing consensus among 
users, manufacturers, and cryptographic experts on a difficult 
technical task is a challenging task. Each group has different needs 
and understanding levels for the standard. Second, most standards 
development efforts are all volunteer activities. This limits the rate 
of progress to what can be accomplished in an overload or spare time 
mode by people with full-time job responsibilities.
    Those of us who have participated in the AGA 12 process are proud 
of the success we have achieved, for this is no longer just a paper 
standard. AGA 12 Part 1 is in the final stage of balloting prior to 
being adopted as an industry recommended practice. Two manufacturers 
are offering or soon will offer cryptographic modules that comply with 
AGA 12, Part 2. Early versions of this equipment have performed well in 
field tests at actual gas companies. AGA 12 has entered the field test 
stage at least 2 years ahead of any other group developing an open 
standard for cryptographic hardware.

MANY GROUPS HAVE CONTRIBUTED TO THE SUCCESS OF AGA 12
    Many groups have contributed to the success of AGA 12. No single 
group did more to accelerate the work of AGA 12 than the Technical 
Support Working Group (TSWG), a part of the Combating Terrorism 
Technology Support Office. TSWG began support of cryptography for SCADA 
systems with a project at GTI in 1998, well before terrorism was 
recognized as a threat. While as previously mentioned, most standards 
groups operate on an all volunteer basis, TSWG funded GTI to provide 
full-time support by several people to work on AGA 12. This allowed us 
to debate approaches, build models of the various ideas, test to see 
what does and what does not work, write our results into the emerging 
standard, and begin the cycle anew with a debate on the next issue.
    In addition to TSWG support, several other government agencies have 
contributed to the progress of AGA 12. The National Institute of 
Standards and Technology provided funding to help develop a standard 
test methodology for evaluating how much cryptography slows 
communications in network. Sandia National Laboratories evaluated the 
security level of the first version, work which led to several 
significant improvements to AGA 12. Pacific Northwest National 
Laboratory conducted a preliminary test on the impact of AGA 12 on 
communication speed. Under DOE sponsorship, both of these laboratories 
continue to do work on the security and performance of the AGA 12-
compliant cryptographic modules. These National Laboratory tests are 
particularly important to the private sector's acceptance of the AGA 12 
standard as both secure and functional.
    In addition to government support, industry groups have helped. 
Both AGA and the American Water Works Association Research Foundation 
(AWWARF) have provided funding and substantial in-kind support for the 
AGA 12 standard. GTI and the Gas Research Institute have funded the AGA 
12 work as well.
    Many private companies also supported the AGA 12 project. These 
include Cisco, OPUS Publishing, SafeNet Mykotronx, TecSec, Schweitzer 
Electronic Laboratory, Thales e-Security, and Weston Technology. 
Peoples Energy (Chicago) and Detroit Edison have also been supportive 
and contributed extensively to the working group's understanding of the 
needs of SCADA operators.

DESPITE REMAINING WORK, AGA 12 HAS SLOWED SUBSTANTIALLY
    Although significant work remains to be done to complete the AGA 
standard, progress stopped in May of 2005 when TSWG funding ran out. 
TSWG is an organization which only funds prototype developments until 
they prove successful, at which time funding is to be provided by other 
organizations. DOE has supported Sandia and Pacific Northwest National 
Laboratory to evaluate the security level of the standard and the speed 
of its encryption, respectively. In October, DOE provided limited 
funding for GTI to complete some field testing and write up the 
existing version of AGA 12-2 as a document that is in a suitable format 
for ballot. This 5 month hiatus significantly reduced the momentum of 
the AGA 12 project. Largely as a result of these delays, one of the 
three manufacturers that originally committed to produce AGA 12 modules 
has stopped work on this project.
    Regrettably, AGA 12 became a victim of its own success. Given that 
it is well ahead of any other hardware development of cryptographic 
protection and manufacturers are developing products, it appears that 
market forces have now taken over and there is no further role for 
government support.
    The apparent success of AGA 12 obscures the additional work that is 
required. This includes several topics that--while of great importance 
to the success of the AGA 12 effort--are difficult to appreciate. These 
include the following:
         Conformance testing--While the AGA 12 standard will be 
        validated by at least two National Laboratories, SCADA system 
        owners and operators need a ``seal of approval'' to verify that 
        the particular products they are considering buying actually do 
        conform to AGA 12 requirements. There is no existing set of 
        tests that is recognized as providing this assurance.
         Next generation design--Because AGA 12, Part 2 is a 
        retrofit solution for legacy systems, it is the most expensive 
        and least effective approach to the cryptographic protection to 
        SCADA systems. Incorporating this protection into products at 
        the time of manufacture is estimated to be less than half as 
        costly as adding it after it is in the field. It is critical, 
        also, that the next generation systems be able to interoperate 
        with the units that have already had cryptography added.
         Large scale pilot test--While the laboratory and 
        small-scale field tests that have been completed and will be 
        done in the near future will validate that AGA 12 does work in 
        the field, this is not a full scale pilot test. Several parts 
        of AGA 12 that will function well during a small scale test may 
        prove problematic for larger scale installations. Key 
        management is a good example. Another is the possibility that 
        network congestion problems might manifest themselves when many 
        of the messages are encrypted, but will be invisible in small 
        scale tests. SCADA operators are more likely to feel confident 
        in a system that has been tested in a full-scale pilot than in 
        a system that has only been tested on a small scale.
         Key management--Good cryptographic practice requires 
        that the keys that decrypt the encrypted data and commands be 
        changed periodically. This ``key management'' must be done 
        remotely to be cost effective, since the wide geographic extent 
        of SCADA systems prohibits visiting sites to change keys if a 
        strike occurs or if an employee leaves.
         Forensics and diagnostics--While it is important that 
        AGA 12 be able to protect SCADA systems from attack, it is also 
        desirable that these systems detect attacks that are under way, 
        inform the operator of the attack, and gather possible forensic 
        information that will facilitate the detection, identification, 
        arrest, and prosecution of system attackers. Although AGA 12 
        contains some features that lay foundations for this type of 
        work, it is far from complete.
         Management port--The management port requires some 
        additional features that are different from those required to 
        send data and commands.
         Coordination of security standards--It is important 
        that standards groups establish and maintain contact with one 
        another. There are estimated to be approximately 100 groups 
        currently developing cyber security related standards. There is 
        very little contact among these groups, an undesirable 
        situation likely to lead to duplication of effort and 
        conflicting standards that no manufacturer will follow.
         High speed networks--While AGA 12's early focus on the 
        protection of low speed legacy SCADA systems is appropriate in 
        providing protection to the large installed base of these 
        systems, it is also clear that many of the newer systems will 
        use higher speed communication links, such as the Internet. 
        This requires that we be able to maintain as much 
        interoperability as possible between the low and high speed 
        networks.

SEVERAL GOVERNMENT STEPS WILL ADVANCE SCADA SECURITY
    In summary, we make the following recommendations
         Make sure that there is funding for R&D and strong 
        industry-government partnerships to develop protection of the 
        Nation's critical infrastructure against cyber attacks. 
        Progress is being made--the key to moving forward is to 
        continue R&D efforts and partnerships.
         Prevent loss of momentum by avoiding funding 
        interruptions in on-going programs.
         Continue the coordination efforts (such as the DOE 
        Control Systems Roadmap and the DHS Process Control Systems 
        Forum) which are key elements of growing coordination between 
        the government and industry and also vital to coordination 
        among different infrastructures. These two programs are models 
        for how to coordinate across a wide area.
         Support continued development of AGA 12. In 
        particular, work should be completed to develop key management, 
        establish conformance tests, do a large-scale pilot test, 
        specify a next-generation design, secure high-speed networks in 
        a manner compatible with the low speed networks, and develop 
        forensics and diagnostics to detect and foil attacks.
         Support selected other standards development efforts. 
        While our focus here has been on AGA 12, it is important to 
        recall that this is only a small part of the total SCADA 
        security requirements. Both the ISA SP99 and the NIST PCSRF 
        efforts are noteworthy. Many of these other standards groups 
        labor on an all volunteer basis on other critical requirements 
        of significance as great as that of AGA 12. This all volunteer 
        pace will not lead to rapid development of required standards.
    Mr. Chairman, we applaud your focus on securing our critical 
infrastructure, especially in the area of SCADA protection. This 
concludes my prepared statement. I would be pleased to respond to any 
questions you or other Members of the Subcommittee may have.

                            List of Acronyms

        AGA--American Gas Association
        AGA 12--American Gas Association Report No. 12, ``Cryptographic 
        Protection of SCADA Communications''
        CM--Cryptographic Module
        DOE--Department of Energy
        EPRI--Electric Power Research Institute
        GTI--Gas Technology Institute
        ISA--Instrumentation, Systems and Automation Society
        ISA SP 99--ISA Special Publication 99, ``Manufacturing and 
        Control Systems Security
        NERC North American Electric Reliability Council
        NIST--National Institute of Standards and Technology
        PCSRF--Process Control Security Research Forum
        RTU--Remote Terminal Unit
        SCADA--Supervisory Control And Data Acquisition
        SCM--SCADA Cryptographic Module
        TNT--Tri-Nitro Toluene (dynamite)
        TSWG--Technical Support Working Group, part of the Combating 
        Terrorism Technology Support Office
        [GRAPHIC] [TIFF OMITTED] T2242.001
        

    Mr. Lungren. The Chair would now recognize Mr. Allan 
Paller, the Director of Research for the SANS Institute, to 
testify.

   STATEMENT OF ALAN PALLER, DIRECTOR OF RESEARCH, THE SANS 
                           INSTITUTE

    Mr. Paller. Thank you, Mr. Chairman. SANS is different from 
the other organizations. We are basically an educational 
organization. We--our 45,000 alumni are the front lines, the 
people who put the security into the computers that try to 
block the attack. So we are constantly looking for methods that 
will make that feasible, because right now the bad guys are 
winning faster than the good guys are getting better.
    So what I am going to do today is not talk about what the 
solution is to SCADA security, but how you can take--how we can 
prove you can take the solutions that Sam and K.P. and the 
others and Bill have found already and get them into operation 
rather than studying them to death. So that is what the 
testimony will be.
    I do want to emphasize that you will sometimes hear these 
computers are not connected to the Internet; therefore, they 
are safe. The problem with that statement is they are often 
connected by packet radio. Think of old-fashioned wireless. So 
they might not be on the Internet, but the packet radio is the 
method by which the water treatment system in Maroochy Shire 
was taken over, and human waste backed up on the streets of the 
city, by a man who was angry at the system. It wasn't connected 
to the Internet, but it was very vulnerable. So we need to look 
at both of those attack methods. And these vulnerabilities 
aren't theoretical. You already heard them from Sam.
    What I am going try to show you is a method and tell you a 
quick story of a method the U.S. Government has used that 
radically changed the dynamics of security in the country. And 
I think I will tell you that story and then finish this.
    Microsoft systems are being put more and more into SCADA 
systems. You are buying them. GAO just came without a report 
that said that the problem--not just, a few months ago--came 
out with a report that says the problems in SCADA security are 
getting worse because they are connected to the Internet and 
because they are buying off-the-shelf, vulnerable operating 
systems.
    So how do you make somebody who has a powerful monopoly 
over all of the computers that we buy change their way and 
deliver safer systems? About 2-1/2 years ago, the CIO at the 
Air Force got up at a public meeting and said, we are now 
spending more money to fix the problems we have because of 
Microsoft bugs than to buy the stuff in the first place. But he 
did something that no one else has done. He took Federal 
procurement power and said, we are going to fix this. And what 
he did is he consolidated all of the contracts that the Air 
Force has with Microsoft, all of them, and in doing that he 
saved $100 million. It is a half-a-billion-dollar procurement, 
but he has got provable savings of $100 million.
    But that wasn't the exciting part of it. The exciting part 
of it was that he required Microsoft to deliver systems that 
were preconfigured according to the standards that DHS helped 
create, that the National Security Agency really fronted, and 
an organization called the Center for Internet Security brought 
together. So there was consensus benchmarks for what safe 
means, and that allowed the Air Force to require the vendor to 
deliver safer systems. It was a lot of argument, a lot of 
negotiation, but in the end Steve Vollmer and Microsoft said 
yes.
    And what I am trying to show you is you can actually change 
the rate at which systems get safer by using combined buying 
power, and that is what I believe can be done very quickly in a 
SCADA environment, because what Bill is talking about, what Sam 
is talking about, what K.P. is talking about are actual 
solutions that aren't going to get implemented unless the 
buyers can act together, because the vendors--each individual 
vendor has an incentive not to get ahead of the others because 
it will cost them more, and if they spend more, the other 
vendors can sell cheaper. So unless the buyers get together and 
agree on standards, it won't happen.
    And what is exciting about the SCADA system is the State 
and local governments and the Federal Government have a huge 
concentration of them, so they can create an enormous buying 
power as long as the DHS and Sandia, and Bill and K.P. can 
agree on what those standards need to be. And it is a very 
quick thing. We are not talking about years and years. We are 
talking about weeks and months to agree on what needs to be 
done. But then instead of having regulations, instead of having 
laws, use procurement power to change things.
    I thank you for allowing me to speak, and I look forward to 
questions. And I hope you feel better, Ms. Ranking Minority 
Member.
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    Mr. Lungren. I hope she feels better, too. I am not sure I 
feel better after hearing your testimony about the 
vulnerabilities that we have here.
    We have now been informed that I guess we are to go back at 
5:30, so we will have time to not only ask questions, but to 
hear your comments. And I appreciate your brevity, but I also 
appreciate the quality of the testimony.
    This is a concern that many of us on this community have. 
It is, as someone said, the soft underbelly of our 
infrastructure, and it is something that doesn't immediately 
come to mind because we take for granted that we have these 
systems that work. And our increased interconnectivity is a 
blessing, but it is also a curse. It creates the vulnerability 
that makes that soft underbelly even greater. And I hope I am 
pronouncing your name correctly. Is it Dr. Varnado?
    Mr. Varnado. Varnado.
    Mr. Lungren. Varnado. I put the wrong emphasis on the 
syllable.
    Dr. Varnado, of all the things that you suggested are our 
vulnerabilities, what would be the chief one; that is, the 
greatest--which would require the greater exertion of political 
will and governmental attention right now?
    Mr. Varnado. There are basically two approaches that we 
need to take. We need to continue to work on the inherent 
vulnerabilities that are there in every networked computer 
system. Industry and universities are doing a pretty good job 
in taking, looking at that one very hard.
    The second area is that of induced vulnerabilities, 
something like what happened in Russia. And the problem with 
the COTS products, those are very complex systems. We have no 
idea what is deeply buried in those systems. The software that 
we purchase may have 20 million lines of code, and for us to 
reverse-engineer that is a very difficult task. Same thing with 
chips. There can be layers, seven, eight layers, in 
microelectronics today. More and more of those systems are 
embedded. So finding out how to reverse-engineer some of those 
products and to do security checks is a very difficult problem.
    Now, the thing that comes to mind for Congress is trying to 
improve our collaboration among universities and industry and 
national labs and the government. There are things that get in 
the way, like classification issues. There are certain things 
about the threat that we can't talk about in this room. There 
are other issues like trust, antitrust, those kind of things, 
that the government could take some action to help give some 
relief in those areas so that we could discuss more. If we 
could discuss more openly the things that we all know, we would 
be in a better position.
    So I probably didn't answer your question precisely, 
butSec. 
    Mr. Lungren. Well, let me ask it another way. You said 
that--I mean, you almost articulated an insoluble problem which 
said we are attempting to build trusted systems with 
untrustworthy pieces. Other than us pulling in and saying 
everything we are going to do is going to be totally 
domestically engineered, produced, testing, et cetera, what do 
you suggest?
    Mr. Varnado. Doing it all ourselves is not in the cards. We 
can't afford it. So what we are doing is we are looking at 
different ways to configure systems that put security checks 
built into the technology as you assemble the system. So we are 
trying to decompose the system a bit and to put in security 
features where we think we might find problems and be able to 
detect problems quicker.
    We do not have intrusion detection systems, for example, 
that operate in real time. That is why on the zero day exploits 
and the things like the 8 minutes of infecting the DOD system 
is so hard. We don't have these real-time intrusion detection 
systems yet. So we are working on those kinds of things to try 
to solve this problem. We cannot afford to build everything, no 
question.
    Mr. Lungren. Thank you, Dr. Varnado.
    Mr. Purdy, I have had a chance to hear you before, and I am 
very impressed with the breadth of your knowledge and the 
obligations that you have at your job. Having heard Dr. Varnado 
articulate the problem, as well as several other of the members 
of the panel, how do you at Homeland Security attempt to try 
and deal with this challenge, because in some ways it is a 
matter of priorities; and also, how do we--it seems to me that 
there is more things you can do immediately by command within 
the government than you can do in the private sector. How do 
you differentiate between what you can do by command in the 
government versus what you can do by whatever means in the 
private sector?
    Mr. Purdy. Well, that is a difficult question which I know 
is one of the reasons that you asked it, and the importance of 
trying to get a handle on these issues. But essentially 
Secretary Chertoff's approach of risk assessment and risk 
mitigation, which underlies our National Infrastructure 
Protection Plan, and our work in building the partnership 
between government and the private sector for information 
technology within the sector and across the sectors, that is a 
fundamental piece of our effort. But we have prioritized 
several risk mitigation efforts within that context. One is 
control systems we have talked about. Another very important 
one is software assurance, and a third is Internet disruption, 
trying to promote the survivability and resilience of the 
Internet.
    The software assurance piece that Dr. Varnado talked about 
relates to a number of efforts going on that are coordinated. 
The Department of Defense has a major effort in the software 
assurance area that is closely coordinated with our own 
software assurance security program.
    The two fundamental things in addition to the purchasing 
power issue that Allan Paller talked about which we are working 
very hard on is the development of best practices along the 
development cycle for software assurance. And it is developing 
tools so that we can go back and assess the software after the 
fact.
    The foreign issue that Dr. Varnado talked about, we are 
working in the unclassified and in the classified space. I am 
working as the cochairman of the globalization of IT within the 
Committee on National Security Systems, where the 24 agencies 
are coordinated on the national security systems so we can 
address exactly the kind of issue that Dr. Varnado talked 
about, the insecurity of what is made overseas, but, in fact, 
our inability to be able to tell on what is made domestically 
as to whether software not only does what it is supposed to, 
but to make sure it doesn't do other things; the coordinated 
effort among the partnership, among the national labs; the 
funding that DOE, DHS--some direct, as our 15 million that is 
up this year for 2006--the money that our Science and 
Technology Directorate is funding; the additional funding that 
is provided for next year that goes to the I3P program that 
Sandia is coordinating; and a number of the specific efforts we 
believe are going to in 2006 provide some real deliverables to 
help make folks safer. But it is going to continue to require 
the partnership among everybody here, the owners and operators 
and the security vendors, and it is a difficult and important 
challenge.
    Mr. Lungren. The Chair recognizes Ms. Sanchez for 5 
minutes.
    Ms. Sanchez. Thank you, Mr. Chairman.
    Mr. Varnado, I wasn't going to ask a question, but you have 
me a little curious. When you talked about new systems and then 
intercepting them, did you mean like a little systems test as a 
piece of that hardware got made, or--I am trying to understand 
what you meant as an ability to counteract.
    Mr. Varnado. Right. What we are thinking, this is very much 
right now, Congresswoman, an R&D project that we are looking 
at. If we purchase most of the system and then we put it 
together, there are places in the data flow within the computer 
system that we may be able to put some small components in that 
would detect certain anomalies or violate certain patterns of 
use that would alert us more quickly and maybe even be able to 
prevent that from happening. So it is very much an R&D project 
at this point, and we are just starting to work on it the last 
6 months or so. It is brand new. We think it holds some 
promise, but it is a huge problem, and we need to put more 
effort on it, I guess is the message I want to leave with you.
    Ms. Sanchez. Thank you, Doctor.
    Mr. Chairman, I am going to give up my time so that--
because you have a lot of Members on my side who showed up to 
this, which goes to show just how important most of us think 
this is. And I am going to yield back the rest of my time and 
move it on.
    Mr. Lungren. I thank the gentlewoman for yielding back and 
recognize the Chairman of the subcommittee Mr. Reichert for 5 
minutes.
    Mr. Reichert. Thank you, Mr. Chairman.
    Well, I am going to be totally honest. I am coming at this 
from a novice's perspective, and so I listened to you. My 
background is law enforcement. And so GTI, SCADA, NSTB, SCSC, 
NERC, AGA 12, cryptographic module and TSWG, and I had some 
more but I will stop. So, book them, Dano, is where I come 
from.
    I am just really curious, you know, we need to be prepared. 
First of all, where are we really today; in your analysis of 
where we actually stand today, where are we? Anybody.
    Mr. Paller. The demonstrations of vulnerability are active 
and scary. So if you want to break into the power systems and 
the other systems in the United States, you can hire a bunch of 
companies that will demonstrate that it can be done. I just 
don't believe that we are at risk of that right away because it 
is easier to bring conventional weapons in and blow things up 
than to figure out exactly how to use that to blow up a 
pipeline. But I don't think we are far away from it, and if we 
wait until we see the first strong use of it, there will be no 
catching up.
    So it is hard to fix a problem when you don't see the 
attacks. It is very hard to spend money on that. That is why I 
like the Air Force method, because they actually didn't spend 
new money. They used old money and the buying power of the old 
money to make the change. I don't think there is another way to 
do it. There is not on lot of fresh money coming from the 
Federal Government.
    Mr. Reichert. Thank you. I thought that might be the 
answer.
    And so when you look at what we need to do to become more 
responsive and aware, there is an educational training process 
that has to take place, not only some of the things that you 
mention in constructing the right system, but people learning 
all of the acronyms that I just mentioned, and I am sure there 
are a lot more. But how does local--how does the local 
government officials, how do they play into that, local law 
enforcement and also the local businesses?
    You touched a little bit upon the industry and how they 
play a partnership, but when it comes to training, I think, Mr. 
Purdy, you mentioned training, and, Dr. Ananth, you said 
something about training 350 people. What kind of training, and 
who do you train?
    Mr. Ananth. Well, if I might say, the training that we talk 
about is for the people who install those control systems and 
for the end user. We are not talking about training the State 
and local people, because, as you know, sir, there is a lot of 
problem in interoperability devices with the response workers 
and the emergency response workers. But what we are talking 
about is the people who actually own the critical 
infrastructure assets, which is a lot of the private sector. So 
we are talking about where the control systems are located, so 
they need to know where the vulnerabilities are, they need to 
do a fix. So when we talk about the training, and when I talk 
about the training, that is the audience, the target audience, 
I was talking about, the owners of these infrastructure assets.
    Mr. Reichert. Mr. Purdy, did you have any comment on the 
training?
    Mr. Purdy. Well, we have a number of different levels of 
the awareness piece that was touched on. I believe the House 
passed today a resolution to support National Cybersecurity 
Awareness Month, which is October, which helps emphasize the 
importance of getting the cybersecurity important message out 
to consumers and small business and what folks need do about 
it.
    In addition the training program, we work with the National 
Science Foundation on the Cyber Corps Program, because we want 
to encourage the number of well-trained cybersecurity 
professionals in the Federal workforce, and as part of training 
we have been partnering with the Department of Defense, because 
one of the big issues about whether the Federal Government has 
enough well-qualified people is, if you define all the jobs 
differently, it is impossible to do the gap analysis. So they 
have done the job task analysis of DOD, and we are going to try 
to leverage that across the Federal agencies.
    Also we are partnering with the National Security Agency. 
In fact, we have a major conference tomorrow up in Baltimore 
with the Centers of Academic Excellence, as we have been 
creating a common body of knowledge for those university 
centers of excellence to train the next generation of 
cybersecurity professionals and software developers to do a 
better job of what it is that they do.
    Mr. Reichert. Thank you, Mr. Chairman.
    Mr. Lungren. Mr. Purdy, I might just mention your reference 
to the bill that we passed yesterday. It is a great analogy for 
where we are. We passed appreciation for this month in the 
middle of the month. Maybe it shows you how we have to catch up 
in this whole arena.
    Mr. Pascrell is recognized for 5 minutes.
    Mr. Pascrell. Mr. Purdy, I want to start off with this 
question, and I would ask you to be very direct and specific. 
How many Department of Homeland Security employees are 
currently working on the SCADA control systems issues? How many 
people?
    Mr. Purdy. We have two government employees and 35 full-
time contractors.
    Mr. Pascrell. So there are only two people in the 
Department of Homeland Security, and listening to the 
vulnerabilities from you six gentleman, we have two employees, 
Federal employees, and we are contracting out most of this 
work, correct? Correct me if I am wrong so far.
    Mr. Purdy. On the control systems piece. The other efforts 
we are doing will help protect the control systems owners and 
operators as well, and that is integral to it.
    Mr. Pascrell. Well, then, let me ask you this question. We 
saw in the recent hurricane, Hurricane Katrina, that the 
Federal Government was unprepared to respond to a large natural 
disaster. Today we have heard about the devastation that may be 
caused if a terrorist or a--or there is a natural disaster hits 
our control systems. Mr. Varnado, you made four very specific 
recommendations. Just last week there was a headline in the New 
York Times that said, U.S. Cybersecurity Due for FEMA-Like 
Calamity. Are we prepared for a cyberattack on our control 
systems, Mr. Purdy? And if a natural disaster hits our control 
systems, are we prepared to respond to it, in your estimation?
    Mr. Purdy. Well, we believe we are prepared for a 
cyberattack, to respond to a cyberattack against the control 
systems. Our partner division within the Infrastructure 
Protection Office, Protective Security Division, is the best 
division to talk about the actual direct physical consequences 
of your question.
    Mr. Pascrell. So from your standpoint we are prepared.
    Mr. Purdy. We have a high cyber risk in this area, but we 
are prepared to respond and mitigate an attack that might 
occur, yes, sir.
    Mr. Pascrell. Well, there is no need to get on the 
defensive. I have a right to ask the questions, and you have a 
right to deliberate before you answer me.
    I am getting particularly annoyed--for the Chair, I am 
getting particularly annoyed with employees that come here from 
the Department of Homeland Security, the responses to this 
committee or any committee dealing with homeland security, and 
frankly, I am tired of it because we are not prepared. You know 
it, and I know it.
    And let me make some suggestions before I leave it for now. 
We know that there are vulnerabilities within these systems, 
and we know that these vulnerabilities are abundant, and we 
know that the threat of the terrorist attack against these 
systems is real. Those things we know, we agree on. So the 
Congress, it would seem to me, needs to engage in a robust 
analysis and oversight in this realm, Mr. Chairman. We need to 
help ensure the security of the various control systems that 
are used in critical infrastructure. And I am heartened that 
today two Homeland Security subcommittees are leading the 
charge.
    A cyberattack on one of New Jersey's four nuclear power 
plants or 100 chemical sites, for example, has the potential to 
be absolutely devastating not only in terms of lives lost, but 
also in the regional and national economic structure it could 
bring forth. That is very serious, very serious business.
    Back in 2002, the National Infrastructure Protection Center 
reported that a computer belonging to an individual who had 
links to Osama bin Laden contained programs that clearly showed 
the individual's interest in the structural engineering of 
various critical infrastructures. It indicated that al-Qa'ida 
members had sought information about the control systems which 
we are talking about here today, from the verySec.  from the 
many multiple Websites.
    The NIPP, the National Infrastructure Protection Plan, was 
due in December of 2004. Mr. Chairman, please hear me on this. 
This is important. The American people, American public is 
being duped. That was supposed to be completed in December of 
04. In February of 2005, we had an interim plan. It was issued, 
setting a deadline of November 05 for the final plan. Now, 
according to the GAO, the interim plan was incomplete in the 
first place. It lacked both national-level milestones and 
sector-specific security plans. The plan remains uncomplete to 
this day. We can't even get proposals ready in a timely manner.
    This is unconscionable. There really is only one full-time 
employee staffed in the DHS that deals with national 
cybersecurity, and I am not going to accept as a Member, 
Ranking Member, Ranking Member, it doesn't matter, I am not 
going to accept folks coming before us and thinking that we 
don't do our homework. And we are saying--we are talking here 
about on a nonpartisan basis.
    This is critical stuff. You have never met deadlines. You 
don't care about those deadlines, and I don't think you have 
the expertise to meet the deadlines. What do you know about 
that? And I have not heard anything to the contradiction to 
that statement either. And I am tired of it, and the American 
people are tired of it.
    Natural disasters. We are not going to have 7 days to 
prepare for a terrorist. We are not going to have 7 days. I 
suggest that you look at, if you haven't already, Mr. Varnado's 
four recommendations. It is a start. It is not the total 
solution. There is no seamlessness in this battle, no perfect 
systems, but it is 4 years later, and we are no further down 
the line, Mr. Chairman.
    Thank you for your tolerance
    Mr. Lungren. The gentleman's time has expired.
    Mr. Purdy, if you wish to respond, you may.
    Mr. Purdy. I expect that when the National Infrastructure 
Protection Plan goes out early in the year, that the concerns 
raised in the GAO report will be well addressed. The work we 
have done in the National Cyber Security Division to implement 
our strategic plan in furtherance of the national strategy to 
secure cyberspace, we believe, has made concerted progress. It 
has been reflected in the additional funding we have been 
given.
    We believe Secretary Chertoff believes in the importance of 
the cyber issue as part of the overall risk management 
framework that he has. We are proud of the progress we have 
made. We would be happy to brief the Congressman and his staff 
and other members of the committee on that substantial 
progress. I recognize that the cyber risk is substantial. We 
recognize it is substantial. We agree with the committee. We 
agree with the members of the panel on that issue. To the 
extent the forcefulness of my answers came across as being 
defensive, I apologize, but that is how forceful I am. Thank 
you, sir.
    Mr. Lungren. Thank you.
    Before I recognize Mr. Pearce, I might just say there has 
been some frustration exhibited by this panel for the failure 
of reports to be done in a timely fashion, and I think that has 
been on a bipartisan basis. There is no suggestion on my part 
that you are not trying to do your job, but I will just tell 
you that is a real frustration on this committee.
    Mr. Pearce is recognized.
    Mr. Pearce. Thank you, Mr. Chairman. I have got several 
questions, so I am requesting briefer answers if you could.
    Mr. Purdy, can you outline the process by which the four 
components, divisions of the Office of Infrastructure 
Protection coordinate and share information in the progress or 
implementation of your mission? You have got four divisions. 
How do you all coordinate and share information?
    Mr. Purdy. You are talking about generally?
    Mr. Pearce. Generally, yes.
    Mr. Purdy. Across the board, well, we have two meetings a 
week with the Assistant Secretary for Infrastructure 
Protection, each of the division directors. We have an 
additional meeting without the Assistant Secretary where the 
division directors themselves come together. We have milestones 
that come down from the Infrastructure Protection Office 
weekly. We have weekly reports that the Infrastructure 
Protection Office gives to each of the divisions so that people 
know what the other groups are doing. And we have a number of 
specific areas that we are partnered with; for example, the 
Protective Security Division, they do the site-assist visits of 
the localities, and we provide the cyber guidance for those 
assessments that are due in the local locations. In addition, 
we have periodic briefings, where each division briefs the 
entire group, all the division heads from Infrastructure 
Protection, as to what the goals, objectives, accomplishments, 
budgetary situations are, progress and challenges ahead
    Mr. Pearce. Mr. Todd, do you have--you have heard Mr. 
Purdy's discussion. In your report you talk about the need in 
the future for maybe coordinated contact with other agencies. 
In the past year what contact have you had with Mr. Purdy's 
National Cyber Security Division?
    Mr. Todd. Well, let me handle them in two different ways. 
One is the--
    Mr. Pearce. If you could just give me the brief answer. 
What contact have you had with them?
    Mr. Todd. I have not had any with them.
    Mr. Pearce. Thank you.
    Dr. Varnado, what contact has your group had?
    Mr. Varnado. We are currently working with him on the 
National SCADA Test Bed as well as a program at Dartmouth that 
we are interacting on.
    Mr. Pearce. Okay. Thank you.
    Mr. Todd, as I read your report, I just find the language 
to be very reassuring, very reassuring, and I find the language 
of the other reports to be not so reassuring; that is, I hear 
pointed comments. In other words, you say that you all have 
made the appropriate improvement measures, engineering, that 
you have done what you can to protect the equipment and ensure 
the safety of public health, that you have maintained a policy 
of not connecting your SCADA systems. You have evaluated and 
improved, you have identified the cyber vulnerabilities. You 
are continuously evaluating. Now you list a couple of sections, 
but then your closing statement says that we believe our 
security program meets the challenges of these requirements, 
and then kind of a throwaway comment that we will look forward 
to contributing and just staying on top of the situation.
    Do you find the reports of the other agencies, the other 
people testifying here today, to be that much different from 
your findings? In other words, I find some element of alarm in 
everyone else's, but yours declares that we are on top of it, 
and we have been on top of it, and we are going to stay on top 
of it.
    Mr. Todd. Well, let me say it this way; the differences, I 
believe, are this--we are an agency that puts things out on the 
ground. So we are certainly vulnerable to the kinds of 
contractors and chips and so forth that we might contract for. 
That is true. However, in our implementing these kinds of SCADA 
systems, we have had, over the last 20 years, a basic distrust 
of the system itself. We want it to be foolproof. And so we 
have put in other kinds of guarding devices. For instance, we 
have operators on 24 hours a day. We check with transmission 
agencies continually about what is being provided and what 
isn't. And if those things are not right within our 
parameters--
    Mr. Pearce. You feel like you could fight off any attempts, 
like the Australian attempt that is reported by one of the 
other presenters, that that really would not happen in your 
agency, that there is not much attempt or much capability for 
an outside group to come in and affect the flow of waters 
through the BOR or through the dam system or--you know, you 
think that you really are that secure.
    Mr. Todd. We believe the risk is low.
    Mr. Pearce. Okay. Thank you. Appreciate it, Mr. Chairman.
    Mr. Lungren. I thank the gentleman.
    As I understand it, you do not have the SCADA systems 
running the gates; is that correct?
    Mr. Todd. We do not have SCADA systems running spillway 
gates. We certainly have them running the smaller power gates 
for power generation, that is true.
    Mr. Lungren. But the greater danger is with the spillway 
gates.
    Mr. Todd. Yes, it is. Our SCADA systems are set to operate 
within the safe channel capacity, and so, therefore, we do not 
have them hooked up to the spillway gates, which are set to 
operate sometimes out of the channel capacity.
    Mr. Lungren. I thank the gentleman.
    Mr. Lungren. It is my pleasure to recognize the chairman of 
the full committee, Mr. Thompson.
    Mr. Thompson. Thank you. I am interested to know from Mr. 
Pearce's answer that it was low risk. And the chairman just 
asked the question--you said, it was high risk; if I could get 
clarification and communication from one to the other, with the 
dams.
    Mr. Todd. Excuse me, I am not quite understanding the 
difference of what you are asking.
    Mr. Lungren. Mr. Chairman, I was asking about--the highest 
risk, as I understand it, comes from the control of the gates 
from the spillways and they are not on a SCADA system. Even 
though they have a SCADA system that does deal with the gates 
that go to the power plants, it deals with the volume, so the 
highest risk.
    Mr. Todd. Okay, I think I understand what you are asking. 
Our SCADA systems operate power plants, and in those power 
generation plants they have turbines which--we have special 
inlets which have some gates to those turbines. Those are much 
smaller systems that, if all were turned on, for instance, full 
speed, they would still operate within the channel capacity 
downstream, so it wouldn't cause a catastrophe or consequences 
of damage and that sort of thing.
    However, we also, in operating the dam, have much larger 
gates because of high flooding and other kinds of events that 
we have to safeguard the dam itself. Those gates, which if 
operated at full capacity, might go out of the channel 
capacity; those gates are not hooked up to the SCADA systems. 
So our SCADA systems would only operate within the safe channel 
capacity, itself, of the river.
    Mr. Thompson. Is there a plan to put them on the system?
    Mr. Todd. Not that I am aware of.
    Mr. Thompson. Mr. Purdy, the President asked in 2003 that 
we put together this National Infrastructure Protection Plan. 
As you know, we have more or less missed deadlines, and when we 
finally got it, GAO was very critical of the product. It was 
pulled back, and I would assume that at some point we will have 
another response or report put together.
    Do you have any idea when we will have that?
    Mr. Purdy. Well, I will expect the report to come out 
shortly after the first of the year. Once that report comes 
out, then the sector-specific plan--such as, our sector is 
information technology--there will be a 6-month period in which 
we work with the private sector to create those plans.
    So the specific implementation plans in each sector will be 
ready 6 months after that.
    Mr. Thompson. So we will miss the November deadline?
    Mr. Purdy. Well, I will leave that up to my boss, the 
Assistant Secretary, to--I believe he is coming to the Hill on 
Thursday. So I probably shouldn't officially comment on meeting 
that deadline, but I am confident it will be there shortly 
after the first of the year.
    Mr. Thompson. Okay. All right.
    Well, Mr. Chairman, I hope you noticed that we are still a 
little tardy with our deadline.
    Mr. Lungren. I understand that. I also apologize for 
calling you chairman. Either--
    Mr. Thompson. No, I accept.
    Mr. Lungren. Either I have granted Ms. Pelosi's fondest 
wish or I have inducted you into the Republican Hall of Fame, 
so whichever one you would like.
    Mr. Thompson. Well, okay, either way, I accept.
    The other thing, Mr. Purdy, I am a little concerned about 
is the fact that we don't have but two full-time employees in 
your Department; is that correct?
    Mr. Purdy. We have two Federal employees working on the 
control systems area and 35 contractors. We have an allocation 
of 40.
    Mr. Thompson. Explain the contractors to me.
    Mr. Purdy. They are people paid--many of them are through 
the national labs, for example, people that are not official 
government employees that are paid on a contract basis through 
a contractor. That is supporting our efforts in the control 
systems area. My division is the National Cyber Security 
Division which--control systems is one part of a broader 
effort.
    So we have an allocation of 40 Federal employees. Of those, 
we have two and one to be hired for the control systems area 
that are official government employees.
    Mr. Thompson. Now, the contractors, are those individuals 
that are contracted?
    Mr. Purdy. No, they are through companies or through the 
national labs.
    Mr. Thompson. All right.
    Can you provide this committee with how much that is 
costing taxpayers, rather than having full-time employees, how 
much we are paying those contract employees?
    Mr. Purdy. Yes. We can get you how the funding is broken 
down by contractors, yes, sir. We can get you that.
    Mr. Thompson. For the record, can you tell me whether or 
not we are paying more for those people based on contracts than 
if they were full-time employees?
    Mr. Purdy. I can't. I haven't seen the per-person breakdown 
of it. So I can't answer that question, sir, but we will be 
able to give you information from which that will be obvious.
    Mr. Thompson. Well, just tell me what your best guess is. 
You are over it, right?
    Mr. Purdy. I couldn't hear you.
    Mr. Thompson. You are over it, right, you are over the 
division?
    Mr. Purdy. Yes.
    Mr. Thompson. You approve the contracts?
    Mr. Purdy. Yes.
    Mr. Thompson. Well, just give me a best guess whether we 
pay more for the contract employees rather than if they were on 
a Federal payroll.
    Mr. Purdy. My best guess is, we are paying more for 
contract employees, yes, sir.
    Mr. Thompson. How much more?
    Mr. Purdy. Sir, that really would be a guess. I really 
shouldn't venture there.
    Mr. Thompson. Well, so is it your opinion that we get a 
better product with contract employees than full-time 
employees?
    Mr. Purdy. I am given a certain allocation of Federal 
employees to achieve our mission and implement our objectives 
and goals. So to do that, we need to hire contractors to help 
us fulfill our mission.
    Mr. Thompson. So, in other words, you can't hire but three 
people?
    Mr. Purdy. We can't hire but 40 people, right.
    Mr. Thompson. Out of that 40, you chose to hire three in 
the Federal system and then contract everyone else?
    Mr. Purdy. That is correct.
    Mr. Thompson. Even though it costs us more to contract, 
there are 37 others?
    Mr. Purdy. Yes, sir.
    Mr. Thompson. Well, I guess when you have got a lot of 
money, you can do that.
    Thank you, Mr. Chairman.
    Mr. Lungren. Thank you, Mr. Thompson, Ranking Member 
Thompson.
    Ms. Brown-Waite.
    Ms. Brown-Waite. Thank you very much, Mr. Chairman.
    Perhaps as a follow-up to Mr. Thompson's question, if these 
are individuals and you have a contract with them, you 
obviously have a deliverable. What are they supposed to be 
delivering?
    Mr. Purdy. I am sorry.
    What are the deliverables? Maybe that would help us to 
understand, when you do respond to the question, if you would 
also put what the deliverables are, because it could very well 
be that there isn't any qualified employee.
    I think, in addition to the deliverables, a natural follow-
up question is, what is the length of their contract and when 
are they supposed to produce and what are they supposed to 
produce? I think that would be very appropriate.
    I know you probably don't have that with you now. But in 
addition to how much are we spending, I think that that is an 
important follow-up component.
    The SCADA system is something that I was familiar with. I 
used to be a contracts manager at a water management district, 
which meant I got to okay the payments, the monthly and 
quarterly payments for the SCADA systems, for their structures, 
their control structures. So, naturally there is a concern, you 
want to make sure that they work. But that was long before 9/
11, so when you look at all the other systems, obviously the 
whole SCADA system of controls is just very, very important.
    While we have concentrated on how many employees work for 
you on SCADA, maybe we also need to ask, do you know how many 
are at NCSD?
    Mr. Purdy. Well, as I said, we have an allocation of 40. We 
have 25 or 26 in place. I believe we have six or seven in the 
hiring pipeline; we are pursuing hiring an additional balance 
of the 40.
    Ms. Brown-Waite. Okay, and in a follow-up question, what is 
the plan for the NCSD in the reorganization?
    Mr. Purdy. Our division will move, of course, into the 
larger preparedness directorate, the information analysis, 
infrastructure protection directorate; that is, the Under 
Secretary level has become a preparedness directorate.
    Within that, we will move along with the telecommunications 
folks, called NCS, National Communications System. So cyber and 
telecommunications will be under a new position that is being 
created for an assistant secretary for cyber and security 
telecommunications. So we will be under a new assistant 
secretary who will, in turn, be under the under secretary for 
preparedness.
    Ms. Brown-Waite. I can tell you that so many constituents 
just feel that the Department of homeland Security is nothing 
other than bureaucracy, layer upon layer, and that there is 
just a lot of concern out there that the major question is, are 
we safer for it today.
    Can you also tell me, Mr. Purdy, what progress is actually 
being made in developing standards for SCADA systems?
    Mr. Purdy. Well, some of the members of the national labs 
here can probably go into more detail than I can. But within 
the framework of our plan for 2006, there was some discussion 
about the cyber security protection framework to develop and 
disseminate tools to assist the users in assessing their cyber 
security practices against industry best practices and 
standards. We are trying to work to perform those vulnerability 
assessments to identify the weaknesses in the systems against 
those standards and recommend mitigative strategies for them.
    The Process Control Systems Forum, which we cosponsor with 
the Science and Technology Directorate, with the users--again, 
we are working with the owners and operators, the vendors and 
the national labs to help identify the specific standards for 
the control systems against which we can judge how the actual 
owners and operators are doing.
    Ms. Brown-Waite. So I think what you said is, there is no 
standard yet, but you are working on it. Is that--
    Mr. Purdy. We have a draft cyber security framework, as I 
said in my testimony, that we are going to be piloting this 
year, that we will then be able to roll out this year--``this 
year'' being 2006--so that the individual companies can do 
their assessments. That is going to be part of the effort as 
discussed by others to build the business case to convince the 
owners and operators to spend the money to meet the standards.
    Ms. Brown-Waite. Do you believe that there is a way that 
government can incentivize the private sector to actually 
develop smarter SCADA security?
    Mr. Purdy. Well, within the context of software and in 
controlled systems, we want to do--and we have begun to do what 
Alan Paller was talking about, which is put in incentivizing 
programs for those contracts which the Federal Government is 
buying so that we can raise the bar in a nonmandatory way--not 
like in a regulatory way, but if you want to get the contract, 
you have to have the security built into the system you are 
selling. We believe that is an important basis.
    In addition, having the assessments and the framework and 
the tools for self-assessment, that is going to help encourage 
and make the business case for the private sector to spend the 
money.
    Ms. Brown-Waite. Thank you, Mr. Purdy.
    I yield back my time. I thank the chairman.
    Mr. Lungren. I thank the gentlelady.
    The gentlelady, Ms. Norton, is recognized for 5 minutes.
    Ms. Norton. Thank you, Mr. Chairman. Actually, it is this 
latter point, and I was going to direct the question to Mr. 
Paller, because I was intrigued with his notion of requirements 
of the contractor essentially to deliver security-ready 
systems.
    It seems so obvious that I have to ask you--it seems 
obvious because, obviously, if you are delivering to the big 
granddaddy of them all, the Federal Government, you really do 
call the shots. You know, it is like Texas calling the shots on 
textbooks that everybody else has got to use, because they have 
more kids. Or it is like Medicaid prescription drugs, where we 
ought to be taking advantage of our market advantage. This goes 
to the underlying substance: Who in the hell needs this more 
than the Federal Government?
    What are the--I mean, what do we--what are the barriers? I 
mean, for example, is this very costly to do? If so, you know, 
I can't imagine that it would cost us even more to do it after 
we got it. So that is one question.
    Are there security reasons? Is there some discussion of 
contractors and whether or not you want them that much, excuse 
me, in on your business, but they, of course, I presume, know 
all this in the first place.
    I would like to know what are the real barriers to this and 
whether it can be done, because you indicated it can be done 
pretty quickly.
    Mr. Paller. There are two barriers that we have seen, one--
and they are both real, so that when people fight against it, 
they are fighting not irrationally.
    One is, if you take responsibility for securing systems and 
you deliver a more secure system, when the user wants to do 
something that is not turned on by default, he may call up for 
support. So there is a support issue that comes in.
    But the much larger one, that the lawyers get involved in, 
is that they are worried about taking liability. They are 
concerned that if they say, now we are going to give you a more 
secure system, that somehow the trial lawyers will be all 
around them. At least that is what they say.
    But could I just take one second and answer another 
question that I wasn't asked?
    Ms. Norton. On my time?
    Mr. Paller. Yes.
    Ms. Norton. No. Because I have another question.
    Mr. Paller. All right. You.
    Mr. Lungren. Normally, we would allow you, but we have a 
short time frame here.
    Ms. Norton. If he would have extended my time--see, he is 
not going to do that.
    I have got to go to Mr. Purdy and ask him about the four 
cyber security managers in so short a period of time, high 
turnover, and of all positions, the security managers at DHS. 
As I understand it, the last turnover was in January. This 
doesn't make me feel very secure.
    Mr. Purdy, I would like to know why there is such turnover 
in the cyber security managers, what you can do to correct it. 
I can't believe it is good for the system.
    I want to know what the effect is on cyber security, and I 
want to know why the Secretary hasn't appointed a new cyber 
security manager here in the month of October?
    Mr. Purdy. Well, let me address the last question first. It 
is certainly my expectation and hope that now that the new 
directorate is stood up by the President signing the Department 
of Homeland Security budget, that Secretary Chertoff will 
announce the appointment of an assistant secretary for cyber 
security and intelligence.
    Ms. Norton. Excuse me, so you are saying it was a budget 
question?
    Mr. Purdy. The position did not exist before the President 
signed the budget. All I am saying is, it is my expectation.
    Ms. Norton. I thought there were four cyber security 
managers. So you are saying the position of cyber security 
managers did not exist?
    Mr. Purdy. I am sorry. I am trying to answer your last 
question first, the question on Secretary Chertoff appointing a 
new assistant secretary for cyber security and 
telecommunication. And I was saying, it is my hope and 
expectation that he will make that appointment very soon now 
that the new directorate has been stood up.
    I think the publicity about high-level departures from my 
division is really overblown. To me, the progress that we made 
from the time I came over from the White House, having worked 
on the national strategy, in April of 2003, through the time 
when Amit Yoran, my predecessor, was in office and some of the 
other folks have left and are gone, we have built and have 
implemented a very important complex plan to reduce our cyber 
risk. We do not believe that has been impacted by individuals' 
departing.
    Ms. Norton. Why are they departing? Please answer my 
question; I have limited time.
    If there have been these rapid departures, one, why have 
they departed; and two, what can we do to keep turnover in all 
divisions of cyber security managers? I would like to ask my 
question because, you know, everybody is going to leave here in 
a minute.
    Mr. Purdy. Some of the positions were departures based on 
personal reasons that were not related to mission. I think that 
is primarily what we are talking about, not related to mission.
    We believe we have the positions in place. We have the plan 
in place. We have the funding, particularly with the additional 
2006 money, that we are going to be able to keep strong people, 
and we are going to be able to implement our strategic plan.
    Ms. Norton. I will accept that as a promise.
    Thank you, Mr. Chairman.
    Mr. Lungren. I thank the gentlelady.
    Ms. Jackson-Lee is recognized for 5 minutes.
    Ms. Jackson-Lee. Thank you very much, Mr. Chairman, and to 
the ranking member. We don't have a lot of time for what I 
think is a very important hearing.
    I guess I remain troubled by, one--Mr. Purdy, maybe you can 
tell me, you might be under review or under the consent process 
of the Senate. You might advise me of that. But I continue to 
be troubled by the acting director scenario, because I think in 
the Department of Homeland Security we are rattled, if you 
will, with interim and acting personnel when we have a very 
serious challenge. So I know in the course of your response, 
you will provide me with that.
    I would like, first of all, to ask unanimous consent to 
have my statement submitted into the record, Mr. Chairman.
    Mr. Lungren. It is so submitted.
    Ms. Jackson-Lee. But what I would like you to walk me 
through again, and if you have said this previously, thank you 
for repeating it in a more detailed manner, and that is the 
absence of a National Infrastructure Protection Plan. Why don't 
you tell me why no such plan exists?
    I am sure you are going to tell me that it is either being 
worked on or it has been submitted, and I missed it. But then 
also tell me what you would expect to see in such a plan?
    Let me just highlight for you that in the course of at 
least 6 months, we have had a number of incidents at our 
chemical plants and refineries in the gulf coast region. Adding 
to the misery, of course, were Hurricane Katrina and Rita in 
terms of control data systems determining the status of those 
particular entities, one, the vulnerability to terrorism and 
other catastrophes that might make the situation worse.
    So obviously this hearing is extremely important, because 
we are talking about control systems and SCADA systems which 
are sometimes confused and intermingled.
    I think it is obviously a failure that we have never 
finished our national vulnerability assessment or national 
threat assessment that I think many of us have been asking for 
for a number of years now, since 9/11.
    Now I understand that we don't have the particular National 
Infrastructure Protection Plan relevant to the issues at hand. 
Would you, first of all, respond to--you could give me your 
status, but would you both tell me whether there is an existing 
plan, but then what you would expect or would see, expect to 
see, in such a plan to be presented and to be in place?
    Mr. Purdy.
    Mr. Purdy. So the existing status, you are talking about my 
acting director position?
    Ms. Jackson-Lee. I am. Are you acting or are you in the 
middle of being confirmed?
    Mr. Purdy. No.
    Ms. Jackson-Lee. Or what is your stance?
    Mr. Purdy. No. I am the Acting Director of the National 
Cyber Security Division, and we are waiting for the appointment 
of an assistant secretary for cyber security and 
telecommunications, who will be my boss; and he or she will 
make the decision of whether I will be director or in some 
other position.
    Ms. Jackson-Lee. So we are in complete disarray?
    Mr. Purdy. No, I think we are implementing our strategic 
plan in furtherance of the National Strategy to Secure 
Cyberspace. I think we are making demonstrable progress, and we 
are happy to brief you in more detail on it.
    Ms. Jackson-Lee. Can you help me then with the question 
that I asked, why do we not have such a plan right now?
    Mr. Purdy. The responsibility for the plan is the 
responsibility of my boss, the Assistant Secretary.
    Ms. Jackson-Lee. Who doesn't exist at this time?
    Mr. Purdy. The Assistant Secretary for Infrastructure 
Protection, until the time that President Bush signed the 
budget, was my boss. When the budget is signed, as soon as my 
bosses tell me that there is a change, then there is a vacancy 
creating an assistant secretary for cyber security and 
telecommunications who will be my boss. So we are in a little 
bit of a transition period.
    But in response to your question, they didn't want to make 
a decision to drop the ``Acting'' from my title, giving the 
opportunity to the person who will be my boss, so that he or 
she can decide who they want in that position and how they want 
to organize cyber security and telecommunications in a cohesive 
and integrated way.
    Ms. Jackson-Lee. Let me acknowledge that I am putting you 
in probably an untenable and embarrassing and compromising 
position in terms of trying to answer the question. Let me 
thank you, first of all, for your service, but let me admit 
that what you have just said sounded as convoluted as one might 
imagine.
    It is almost incomprehensible what you just said. I think I 
gleaned from it that someone that was in the position went on 
to something else, and they are dealing with the budget, and 
therefore, we are not in order.
    I would only say to you this: The acts of terror really 
don't make appointments, and they don't respond to our lack of 
personnel in place. So your response certainly is not your 
responsibility and fault. But let me go on record and say that 
we are in disarray, and we are dangerously in disarray in a 
very important area.
    I do acknowledge that recent legislation had funding in the 
cyber security area, and I am very glad of that, and amendments 
that we have put forward have been accepted, but still--would 
you please answer the question again?
    I don't think we will agree on whether or not the area 
where you are in is in order, but can we at least agree, is 
there or is there not a National Infrastructure Protection 
Plan, yes or no; and if there is not, prospectively what would 
you expect to be included in that plan?
    Mr. Purdy. The draft of the National Infrastructure 
Protection Plan is on Secretary Chertoff's desk, and we expect 
it to be circulated for additional comment in the next few 
weeks.
    Mr. Lungren. The gentlelady's time has expired.
    Ms. Jackson-Lee. I thank the chairman.
    Mr. Lungren. The gentleman from North Carolina, Mr. 
Etheridge, is recognized for 5 minutes.
    Mr. Etheridge.7 Thank you, Mr. Chairman.
    Mr. Purdy, at the risk of embarrassment, I am going to go 
back to the issue that we are still on, and then I have--I am 
going to move on and try to get to another question.
    As you draft the response to this question on the budget 
that you had indicated you will share with us relative to the 
40 slots that are available in your area, I recognize that you 
are only the Acting Director. But that doesn't matter; this 
committee deserves the information.
    I would like to know, and I think the other members of the 
committee would like to know, as you look at that, since we 
only have three permanent positions, what--as you draft the 
numbers for the cost of the contractors, how much the taxpayers 
of this country would be saving if we had full-time positions 
and what the turnover would be if they were not contractors 
that moved back and forth.
    I think it is critical--and I am going not going to ask you 
to answer that today, but I think it is a critical issue to 
have permanent people you can have access to, that can be 
trained, who aren't likely to have the information and you have 
to move on and you have to have different people in place. I 
think that has a real impact on continuity.
    Because you said early on that cyber security is important. 
I happen to believe it is, and if it is important, it ought to 
be important enough to have permanent, full-time people to be 
there in place on a daily basis to deal with these issues that 
are important to the taxpayers of this country and to the 
people of America.
    I hope you agree with that.
    Mr. Purdy. Yes, sir.
    Mr. Etheridge. I hope you will add that to the material you 
are going to send us.
    Now, my question is this: I wanted to follow up, and you 
probably can't answer it, because you have tried to get to it 
and haven't really answered it thus far, simply because I think 
it is above your pay grade, and that is inappropriate, because 
having as many people in this position since the Department has 
been funded creates a real problem of continuity for people 
now, in this period of time, without having someone permanent.
    I am going to leave that out there and not ask you to 
respond to it, because I think it is inappropriate to ask you 
to respond to it. But I trust this information will get back to 
the Department. Hopefully, the Secretary will be here at some 
point, and we will have an opportunity to ask that question.
    My question to you and to Dr. Rush and Mr. Paller--I will 
say this: The Department of Homeland Security established the 
Process Control Systems Forum to facilitate communication 
between government, industry, vendors and academia. Are you 
familiar with that?
    Okay.
    How effective has this endeavor been, and do you know of 
any meetings between these groups? If you do, what was the 
outcome?
    Mr. Rush. Yes. I would say those are some of the most 
effective activities I have seen.
    We are developing standards; we are feeding them in. There 
are two activities--well, really three, but the two that you 
mentioned, the PCSF, the Process Control Systems Forum has 
brought together the vendors, the manufacturers, the users, 
cryptographic experts, the whole field. That has been very 
effective.
    There was a question about coordinating Chairs. We had a 
meeting just a couple of weeks ago where there were literally 
dozens of organizations getting together and swapping 
glossaries and making substantial progress.
    Mr. Etheridge. Beyond philosophies, though, did we get any 
results?
    Mr. Rush. Absolutely.
    Mr. Etheridge. Can you name, share with us some of the 
results?
    Mr. Rush. In terms of things that are out there?
    Mr. Etheridge. Yes, please.
    Mr. Rush. Here is a product that conforms to one of the 
standards. What you need to understand is the standards groups 
are volunteer organizations, and they don't have the resources 
to coordinate. This provides them with exactly the forum that 
they need to exchange. We have got 100 groups working 
independently. Imagine 100 congressional committees not talking 
to each other.
    Mr. Etheridge. Good. Thank you.
    Mr. Paller. Yes. It is a wonderful talking group. Bill's 
outcome is very real. There is a problem with groups like that. 
It was seen in the health--the security of the health devices, 
CAT scanners and things like that.
    When the vendors have too big a role, implementation of 
security is delayed almost endlessly. So at some point, the 
users have to say, this is our need, our things are at risk. 
Vendors are going to have to deliver what we say rather than 
letting the vendors hold it up.
    So PCSF is the best thing out there, but at some point the 
vendors will have to be asked to wait outside while they vote.
    Mr. Etheridge. Mr. Purdy.
    Mr. Purdy. In addition, the PCSF has provided the input 
that has led to the development of the security framework, 
which helped set the best practices and also provided the input 
for the development of the assessment tool. The assessment 
tool, which is now being used to test, is used to assess the 
cyber components of the control systems and then provide the 
checklist and the questionnaire to determine the particular 
vulnerabilities and whether the mitigated steps have been put 
in place. That collaborative effort is what is helping to drive 
solutions to a very complex problem.
    One of the reasons for the complexity is that so many 
different owners and operators have so many different systems 
with different levels of maturity. So it is hard to have one 
set fix across the board to make it better. So that is why the 
collaboration in developing these tools in the framework has 
been so important.
    Mr. Etheridge. Thank you. I yield back.
    Mr. Lungren. The gentlelady from the Virgin Islands, Mrs. 
Christensen, is recognized for 5 minutes.
    Mrs. Christensen. Thanks, Mr. Chairman. Let me ask a little 
bit different question.
    I want to ask Mr. Paller about the training, because that 
is your responsibility also, the training of the technical 
security professionals. Where are we, how many have you 
trained? What is our need? How are we meeting that need?
    Also, where did the students come from? And do you work 
with universities, and if you work with universities, to what 
extent are minority-serving institutions involved?
    Mr. Paller. When we get all done training everybody we can 
train, we won't have touched 1 percent of the people who have 
control of these systems. So the solution is not to train more 
people. We have got to build safer systems; then the training 
will have an effect. So as hard as we work, we will never get 
there.
    I do want to go back to Mr. Reichert's question. We 
actually work with universities and local law enforcement. They 
don't have the funds that large companies do, so we have major 
programs where we cut the costs of education by about 85 
percent, so they get a much lower cost. So locally we work with 
the FBI to set up these programs for local law enforcement. It 
actually is wonderful, because they give more feedback, and 
they are the best students we get.
    But the training of the SCADA people, we have just begun 
with courses on how you measure SCADA security, and they are 
just starting. I think the jury is still out. You have got two 
groups. You have SCADA engineers on the one side and security 
people on the other side, and getting the course right for 
those two interest groups is challenging. So we will know in 
the spring how that works. .
    Mrs. Christensen. Okay, just one other question for
    Mr. Todd. Since I sit on the Resources Committee, I am glad 
to know that your SCADA system is not connected to the 
administrative systems because that is one of the problems we 
are reading about.
    Do you monitor only the 17 dams that the Bureau has created 
or are you monitoring the private dams? Have you used the RAM-D 
to assess the threats, vulnerabilities and consequences; and to 
what extent are the dams that you are assessing, how far along 
are you?
    Mr. Todd. We--of course, as you said, we don't have any 
responsibility for the non-Federal dams. But in reclamation, we 
have 252 high and significant hazard facilities, and of those 
facilities, we have assessed all of them. What we would call 
our ``major mission-critical facilities,'' which are the very 
top-producing power-generating dams and also very high dams, we 
have used the RAM-D on. There are about 50 of those that we 
used the RAM-D that was developed in conjunction with Sandia. 
Those are assessed, and those are the ones that we did.
    Now we have used the other ones. We have done different 
priority dams and low-cost methods.
    Mrs. Christensen. I yield back my time.
    Mr. Lungren. I thank the gentlelady for yielding.
    Mr. Dicks is recognized for 5 minutes.
    Mr. Dicks. I wanted to go to the dams question. It says 
here, significant information on control systems is publicly 
available. It says design and maintenance documents, technical 
standards for the interconnection of control systems and 
standards for communication among control systems, all of which 
could assist hackers in understanding the system and how to 
attack them. Moreover, there are numerous former employees, 
vendors, supporters, contractors and others, end users of the 
same equipment, worldwide, who have inside knowledge about the 
operation of the control systems.
    So, Mr. Todd--and we have got information here that al-
Qa'ida has, in fact, said they are interested in the operation 
of these dams. I am told--maybe you covered this earlier, but I 
have got to go back to it.
    We have heard the story of a hacker gaining control of some 
systems of the Roosevelt Dam in Arizona, which holds 400 
trillion gallons of water. What is the worst damage that could 
have been done there?
    Mr. Todd. In that particular situation--and that happened a 
number of years ago and, of course, there have been a lot of 
upgrades to that system to not allow that to happen again; that 
individual did intrude, but did not get access or gain access 
to any of the operation of the gates and so forth.
    Mr. Dicks. Could it be done from outside?
    Mr. Todd. Well, yes, there are always those possibilities 
that it could be done, especially if it is hooked up to outside 
systems.
    We believe that is a low risk in our system because they 
are not hooked up to outside systems.
    Mr. Dicks. Is there encryption?
    Mr. Todd. Yes, there is.
    Mr. Dicks. Let us say a terrorist got control of the dam. 
Is there a way to override this system at the dam?
    Mr. Todd. Yes, there is. We have operators on 24 hours a 
day. When we notice that the particular facilities that are 
controlled are not operating in the way that we believe they 
should be, we have manual controls. We do send our maintenance 
people out to check those. Sometimes we take over in manual 
control and operate the system manually just because there may 
be a glitch or something.
    So, yes, we do have ways to do that.
    Mr. Dicks. Do you have a comment there at the end,
    Mr. Paller?
    Mr. Paller. Yes, I have a small comment. There are two 
other ways to connect to these.
    First of all, the word SCADA doesn't cover all the control 
systems. We had a fight about that this morning. SCADA is just 
the distributed system; sometimes the very big gates use other 
systems called digital control systems.
    I don't know to what extent those gates are not controlled 
by SCADA, but controlled by digital control systems. If there 
is a digital control system, most of those have dial-up access 
for maintenance ports, and Bill knows a lot about this.
    So this idea--SCADA is not connected, doesn't define the 
whole problem. I am not saying that what--
    Mr. Dicks. You are saying there are other vulnerabilities?
    Mr. Paller. There are other ways of getting into those 
systems besides the Internet. There are other systems that 
control those gates besides SCADA systems. Sometimes they are 
called DCS, sometimes they are called RTUs; they have got other 
names.
    Mr. Dicks. Could hackers get into those systems as well?
    Mr. Paller. The FBI has reported that they already have. It 
might not be true. I mean, the only data I have got is, the FBI 
has reported it has.
    Mr. Dicks. Interesting point.
    Mr. Paller. No, listen, it wasn't--it wasn't attacked.
    Mr. Dicks. Now, does the Bureau of Reclamation, do you have 
control over the Army Corps of Engineers dams?
    Mr. Todd. No, sir, we do not.
    Mr. Dicks. So they are completely separate?
    Mr. Todd. Yes, they are.
    Mr. Dicks. All the private dams are separate?
    Mr. Todd. Yes, they are.
    Mr. Dicks. Are you working to try to develop best practices 
in the industry?
    Mr. Todd. Yes, we have, especially on the physical side. We 
work directly with the Corps of Engineers and TVA and Homeland 
Security on those systems, and we are fully engaged in that. 
One of the outcomes of the Government Coordinating Council is 
to work with the private side and to get information sharing 
and communications going, so we believe that is working well.
    Mr. Dicks. Mr. Purdy, they beat up on you pretty good 
today. Let me ask you this.
    We spent a couple billion dollars, several billion dollars 
at the Department of Defense trying to put in place encryption 
on all kinds of different defense systems.
    Have you benefited from any of that? Does Homeland Security 
get briefed on information from Defense about what they did to 
secure their systems?
    Mr. Purdy. Yes. We have a close working relationship with 
the Information Assurance office within the Department of 
Defense, as well as a similar entity within the National 
Security Agency. So we share in the benefits of the information 
that they have gleaned and share with us.
    Mr. Dicks. Can you give us any examples of anything that is 
been achieved?
    Mr. Purdy. Well, I can't mention--I don't recall.
    Mr. Dicks. If this is classified--I don't want to get into 
classified information obviously.
    Mr. Purdy. I can't recall specific encryption benefits, but 
in those kinds of techniques, things as simple as making sure 
you encrypt the data not only in transit, but at rest, and how 
to protect those databases from attack are some of the examples 
of things that we have learned from them.
    Mr. Dicks. Any comments on this point from any of the other 
witnesses?
    Mr. Rush. Yes. We have actually--completely, independently, 
as an industry organization, the American Gas Association got 
together with a group of people and put together an open 
standard. Any company can build it, and it provides a very high 
level of protection, not military grade, and it is an open 
standard. It is ready.
    We have two manufacturers who have begun producing 
prototypes. It is ready to go. We are not talking something 
theoretical.
    Mr. Dicks. Are people ordering it? Are companies ordering 
it?
    Mr. Rush. At this point they are openingSec.  ordering them 
in small numbers, yes, they are. But they are only ordering 
them in evaluation kits, typically about five.
    Until it works and people have tested it, people will be 
slow to adopt them. But, yes, they are adopting them.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Lungren. I think we have about 6 minutes to get over to 
the floor to vote on the first 15-minute vote.
    I want to thank this panel. I think it has been very 
helpful, very instructive. We make requests that all or some of 
you come back at another time, because this subcommittee--I am 
sure my cochair shares this--desires to continue to look at 
this.
    I thank you all for your valuable testimony and the members 
for their questions. The members of the committee may have some 
additional questions for the witnesses, and they may submit 
them to you in writing. I would hope that you would answer 
those in a timely fashion. The hearing record will be held open 
for 10 days.
    Mr. Lungren. The committee stands adjourned.
    [Whereupon, at 5:40 p.m., the subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


 Dr. K.P. Ananth Responses to Hon. Daniel E. Lungren, and Hon. Dave G. 
                Reichert, Letter dated November 8, 2005

I. The Threat: Probability/Impact of Attacks on SCADA Systems
    1. Based on available research, how likely is an attack on a SCADA 
system?
    Based on a review of 120 incidents, the current likelihood of a 
severe attack is low; but if the rate of incidents follows what has 
been seen for the Internet in general, we forecast that the risk will 
rise to a significant level in the future. Documented case histories 
show that activity has increased significantly since 1988. Many of 
these incidents come from the Internet by way of opportunistic viruses, 
trojans, and worms, but a surprisingly large number are directed acts 
of sabotage. Additionally, it is likely that there are many attacks not 
being reported because many asset owners are reluctant to share or 
report their experience.
    SCADA systems are currently at risk from attacks stemming from a 
broad spectrum of attackers ranging from common Internet threats to 
directed attacks by individuals. The likelihood that SCADA systems are 
attacked in a manner that results in severe consequences is dependent 
on the potential attacker's motivation, intent, and expertise. SCADA 
systems are vulnerable and can be exploited to result in a disruption 
in service if an attacker invests enough time to learn the system 
before they attack. To date, the majority of reported attacks against 
SCADA systems have been the result of general Internet propagating 
viruses and worms that were opportunistic in nature and not directed.

    2. What cyber security failures and incidents have you seen with 
SCADA networks?
    Incidents to date have exposed poor security processes and 
vulnerable technology implementations. The lack of general awareness as 
to how the technology can be exploited has resulted in vulnerable 
technology implementations and weak security practices.
    In the past, incomplete security efforts and risky practices have 
allowed common Internet attacks to randomly bleed into SCADA 
environments. In one example, servers infected before shipping by the 
manufacturer were mounted directly onto a control system network.
    Security incidents impacting SCADA/control systems have been 
documented in 11 sectors. The largest number of incidents has occurred 
in the petroleum, power and utilities, transportation, and chemical 
sectors, which combine for over 70% of the incidents observed. None of 
the documented incidents have resulted in a significant event that 
resulted in loss of life, major disruption of service, or economic 
impacts. The US-CERT Control Systems Security Center (CSSC) has issued 
a report describing the reported incidents. (US-CERT Control Systems 
Security Center, Industrial Security Incidents, June 9, 2005)

    3. Based on all available research, how frequently are SCADA 
networks attacked?
    There have been only a few reports of directed attempts to 
penetrate and compromise operational control systems. However, there is 
no way to know with a high degree of confidence how many attacks take 
place because there is currently no formal center to report cyber 
attacks on control systems. A single reporting center is operated by 
the British Columbia Institute of Technology (BCIT). But reporting to 
the BCIT incident reporting system is purely voluntary. The BCIT 
primarily represents North America (Canada and the United States) with 
several members from the UK and Australia. It is doubtful that the 
reporting to the BCIT represents more that 10% of the total number of 
events. The CSSC has also collected incidents from several other 
reporting sources. These sources have documented approximately 120 
documented cases in the past 20 years with the majority (more than 70%) 
occurring in the past 5 years. Therefore, a reasonable estimate of the 
number of attacks, resulting in some damage, is between 20 and 200 per 
year. General cyber security monitoring at the perimeters of 
organizations using power sector SCADA systems has shown a higher rate 
of system probes and cyber reconnaissance activity than organizations 
belonging to other sectors.
    This estimate includes a wide range of possibilities because actual 
incident reporting is very low. The low percentage of incidents that 
get reported is due to several factors, including:
         Organizations often perceive risk in reporting 
        security incidents
         Many organizations lack the technical skill sets to 
        detect sophisticated intrusions or to forensically investigate 
        such activity
         Security technology is not well-suited for SCADA 
        environments and existing technology have few features that 
        lend themselves to detect attack activity
         Lack of general awareness as to the vulnerability of 
        SCADA systems often results in not enough attention or efforts 
        to detect attack activity.
    The most immediate need in the arena of incident tracking is a more 
effective way of reporting cyber attacks (all or at least successful) 
on control systems. This enhanced reporting system needs to be a joint 
effort between industry and government and needs to provide anonymity 
to the reporter.
    Technology trends will continue to create more vulnerabilities, and 
provide greater opportunities for threat actors to access control 
system networks. More interconnectivity and communication among cyber 
systems will lead to increased opportunities for talented people to 
breach the security systems and maliciously manipulate information or 
control system functions. We also anticipate this interconnectivity and 
communication capability to increase in control systems, at least for 
the foreseeable future. While access to operator information and 
denial-of-service attacks may cost industry money or result in 
embarrassment, the manipulation of system functions using this 
information can have more far-reaching consequences.

    4. Is it possible to devise an attack to disable or disrupt a SCADA 
network for an extended period of time? If so, what is being done to 
mitigate such attacks?
    Based on current testing and the knowledge of only a small number 
of actual control system implementations, we believe that cyber attacks 
can be devised to potentially disrupt SCADA systems (electric sector 
control systems) for as long as five to seven days. However, this does 
not necessarily translate into a failure of the physical system or 
controlled process for the same time frame. It is possible for a 
sophisticated attack to poison databases and files over time that would 
require a system re-build and re-configuration before the control 
system would function normally. More research is needed to investigate 
if cyber attacks can cause significant failures in long lead time 
physical equipment, such as transformers and generators. Similar 
studies are also needed in other sectors such as water, transportation, 
and chemical plants to assess equipment impact and downtime.
    Our cyber security researchers have demonstrated the ability to 
physically destroy many of the IT components used in the control of a 
SCADA system. The practice is commonly referred to by hackers as 
``bricking'' a box. There are many ways to require that a SCADA system 
be rebuilt from the ground up. Additionally, if the attacker plants a 
program in the backup sets ahead of time, the system will just destroy 
itself again as soon as it is brought back online. The attacker can 
also plant programs in non-essential equipment such as card readers, 
and printers that are unlikely to be found. The result is long-term 
disruption of service.
    Many of the physical devices are set to automatically shut off at 
preprogrammed points to protect the devices from overheating/
overdriving/overworking. In some instances an attacker can reset those 
points and drive the hardware to failure. Rhythmically turning on and 
off a 480-volt motor can destroy it. Operating a valve hundreds of 
times a second can destroy it. Flow-cooled pumps will overheat and fail 
if the valve is closed while the pump is running. Many other scenarios 
are easy to find and exploit.
    Based on our testing in a representative configuration (an electric 
sector EMS system) established in the test beds, it is possible to 
disrupt system operation through cyber attack. The duration of the 
disruption will depend to a large extent on the types of attacks 
executed, the specific owner/user's system configuration, backup 
capability, and response/recovery practices. Mitigation efforts to date 
have focused on identifying specific vulnerabilities by examining 
representative systems in the test beds and providing information to 
system vendors who then eliminate the vulnerabilities in their 
products. Work in the test beds is also helping to identify the best 
practices that can be implemented by both the vendors and the users in 
making their systems less vulnerable. A significant effort is being 
made to enhance owner and vendor awareness of the methods for reducing 
vulnerabilities.

5. (Not assigned)

6. Electric power is important for nearly all the things that Americans 
do--from businesses to schools to government to many forms of 
recreation. Has your research shown that the SCADA systems that control 
our power generation and distribution are fully protected from attacks 
launched from the Internet? If not, what kind of damage do your 
researchers believe smart, well researched attacks could cause?
    Although some SCADA systems that control power generation and 
transmission currently have some form of cyber protection, power sector 
SCADA systems are not ``fully protected'' from Internet-launched 
attacks. Research has shown that the majority of vendor solutions are 
vulnerable to a cyber-based attack coming from the Internet and through 
the surrounding corporate network that could result in a complete loss 
of system control. Those attacks were successfully demonstrated despite 
the use of common configuration practices and the use of available 
security technologies (IDS, Firewalls, etc). For obvious reasons the 
majority of this research has not been replicated in the field but INL 
has the ability to create very large scale control system and physical 
infrastructure simulations in both the electric and chemical processing 
sectors.
    We have also seen evidence of SCADA systems being vulnerable to 
non-expert-based attacks. In fact, non-directed common and 
opportunistic threats, such as viruses and worms, have impacted SCADA 
systems. Considering a random threat such as a virus can impact a SCADA 
system, a well resourced and motivated threat actor could compromise a 
control network and cause significant disruption to power SCADA 
systems. The disruptions may or may not result in wide-spread power 
outages depending on how much the attacker learned once inside of the 
target's control system. Certainly, a directed attack can result in 
injected commands being passed through the SCADA system to breakers in 
the field possibly resulting in breakers taking lines out of service.
    Assessments performed in the test beds show that typical control 
systems can be compromised from the Internet if the attacker has some 
understanding of the system. Much of that system information can be 
obtained by a patient study of open source information. A well-
orchestrated attack could provide the attacker with the capability to 
take over the operator's function, potentially without the knowledge of 
the operator. While strongly influenced by system configuration and 
operating policies, there is the potential to cause damage to equipment 
through the manipulation of operating and safety limit set points.

7. (Not Assigned)

8. We've heard a lot about the impact of a terrorist attack on a 
control system. But as we saw during Katrina, natural disasters can 
cause devastating impacts to our control systems infrastructures too. 
What kind of impact would natural disaster have on control systems in 
California (earthquakes), Oregon (Tidal waves/Tsunamis), The Gulf Coast 
(Hurricanes), elsewhere?
    Any event, whether manmade or natural, resulting in the destruction 
of physical equipment and the loss of supporting services like water, 
power, and communications can negatively impact SCADA systems. 
Anecdotal information and data emerging from hurricanes Katrina and 
Rita are showing that, for SCADA and other control systems (and other 
utility operations), the need to plan and prepare for an ``all hazards 
approach,'' rather than more narrowly defined scenarios, is crucial.
    We learned from Hurricane Katrina that the main impact to a control 
system from a natural disaster is the remote entities that the system 
connects with (e.g. customers, substations, transmission lines). After 
the August 29th landfall of Hurricane Katrina in Louisiana, 2.7 million 
customers were without power, 263 substations and 181 lines were not 
operating. As of September 22nd, less than 250,000 customers are 
without power and 19 substations and 25 lines remain out (data from the 
Office of Electricity Delivery and Energy Reliability U.S. Department 
of Energy, Hurricane Katrina Situation Report #42, September 23, 2005). 
The control centers themselves are normally less vulnerable than the 
remote devices that are being controlled and queried for status.
    The ability for a control system to minimize impact from a natural 
disaster is directly related to the system owner's continuity of 
operations, disaster recovery planning, and overall preparedness to 
handle natural disasters as discussed in the US CERT website (US-CERT 
Informational Paper September 16, 2005, produced by the US CERT Control 
Systems Security Center, Hurricane Katrina Control System Assistance 
http://www.us-cert.reading_room/KatrinaCSA.pdf).
    The control system is only as good as the data it can receive. With 
limited view and communications, the systems? components and the 
applications designed for automatic control cannot be used properly 
without subject mater experts making the decisions. In the case of 
Katrina, the restoration process was hampered by the other 
communications outages of telephone and wireless.
    The National Infrastructure Simulation and Analysis Center (NISAC) 
provides advanced modeling and simulation capabilities for the analysis 
of critical infrastructures, their interdependencies, vulnerabilities, 
and complexities. It would be helpful to study lessons learned during 
Katrina on the effectiveness of the NISAC models.

II. The Public/Private Relationship in Developing a SCADA Solution

    1. I understand the National Labs are conducting extensive research 
into SCADA and Control Systems. What resources are you currently 
lacking? How are you coordinating these efforts with the private 
sector? What can the federal government do to provide more resources?
    Needed Resources: INL recommends a 5-year funding profile that 
allows the development of long-term programs to support critical 
infrastructure sectors immediate and long-term complex SCADA 
challenges. The uncertainty of year-to-year funding and funding delays 
at the beginning of the fiscal year negatively impact our ability to 
provide sustained research to identify vulnerabilities and to develop 
solutions to fix vulnerabilities aligned with asset owner and vendor-
driven timelines.
    Sustained funding will allow us to successfully decrease risks to 
control systems by conducting ongoing tests to identify vulnerabilities 
and develop mitigations, raising awareness and helping organizations 
develop the right mind set to protect SCADA systems, gaining access to 
more credible incident information, conducting in depth research and 
testing to explore possible consequences and outcomes, and monitoring 
the cyber underground to gauge their knowledge of and interest in SCADA 
systems.
    Private sector coordination efforts: INL is working directly with 
asset owners and vendors to evaluate their system vulnerabilities and 
implementing mitigation steps. These evaluations are protected using a 
nondisclosure basis.
    INL is engaging national experts from industry, national labs, and 
academia in dialog to keep current on allied research and best 
practices and to share that knowledge with industry. In FY-05, we 
conducted nine regional workshops and participated in the Process 
Control Forum. These interactions directly impacted 280 asset owners.
    Our industry outreach program includes training and awareness 
demonstrations of the means and effects of a cyber attack on control 
systems. These demonstrations and training activities are ongoing with 
positive feedback from industry and government participants. These 
include live demonstrations of attacks/effects on small scale 
representative control systems for chemical and electric system 
processes and cyber security--control systems training uses these tools 
and subject matter experts.
    Additional federal government resources: Along with sustained 5-
year funding, designate INL as a National Center of Excellence and User 
Center for SCADA, Cyber Security, and Critical Infrastructure 
Protection. The Center would be modeled after existing National User 
Facilities at other DOE National Labs, such as the High Temperature 
Materials Laboratory at Oak Ridge National Lab or the Light Source 
Facility at the Brookhaven National Laboratory). The Center designation 
would capitalize on INL SCADA test beds and full scale infrastructure 
assets, build on our proven track record with asset owners and vendors 
to identify and mitigate cyber vulnerabilities, and provide an 
independent, scientific organization that tests and validates the 
vulnerabilities and identifies solutions. The result is federal/private 
partnerships with high value to the critical infrastructure owners and 
their vendors.
    With long-term dedicated funding, INL can move from the current 
research approach, which focuses testing on specific attacks as a 
method of raising vendor awareness, to conducting extensive assessments 
in a comprehensive fashion. We would develop consistent methodologies 
and system rating approaches that would apply across all vendors and 
develop quantitative measures to verify the return on investment of 
research dollars that directly impact industry and taxpayers. To that 
end we would devote research focus to develop a realistic threat 
assessment methodology and then apply it to create an open, industry-
acknowledged threat model for contingency planning.

    2. (Not assigned)

    3. It has been widely reported that both industry and the federal 
government find it difficult to estimate the economic impact of a cyber 
security attack. Has the lack of actual quantifiable damages made the 
private sector leery of investing in cyber security?
    There has long been widespread agreement that the published 
estimates of cyber-attack costs have little credibility. In April 2004, 
the Congressional Research Service Report on The Economic Impact of 
Cyber-Attacks concluded ``No one in the field is satisfied with our 
present ability to measure the costs and probabilities of cyber-
attacks.'' But the report resulted in limited research to address the 
measurement need. The research programs most directly addressing the 
need for better assessments of cyber-attack consequences are the 
programs of the U.S. Cyber Consequences Unit, a small independent 
agency established by the DHS in August 2004. The first of the larger 
US-CCU reports will be available for limited circulation release in 
early February 2006.
    The lack of economic consequence data and security metrics has led 
to a variety of concerns about the possibility of a successful attack 
and its associated economic impact. Currently, there is no consensus 
about the level of resources that should be devoted to control systems 
cyber security. Standards and associated business cases are being 
developed that will help industry better evaluate the risk to their 
systems. Even with this lack of documented cases of quantifiable 
damage, attacks occur. For example, recent malware attack (Zotob) on 
multiple sites of a large manufacturing company resulted in loss of 
production time.
    These types of attacks increase asset owners' awareness that they 
too could be the target of a potentially crippling attack; thus, 
investments are being made in the private sector. These investments 
tend to be dependent on the extent of awareness of cyber intrusions and 
the liability posed by denied services or business losses faced by 
individual companies as well as customer impact. Critical 
infrastructure sectors, such as electric utilities, chemical companies, 
oil and gas companies, and banks and financial institutions, realize 
the potential impact of cyber threats but the investments and attention 
paid is not uniform across the sectors. Cyber security concerns 
resulting from easy electronic access to accounts in the Banking and 
Financial Sector are addressed USA Today's November 2, 2005 first page 
article, ``Cyber crooks break into online accounts with ease''. In the 
Electric Sector, the required connectivity with neighboring systems 
creates a weakest link problem for the overall network of 
interconnected SCADA systems. The larger or more progressive utilities 
will suffer from weaknesses presented by smaller, resource-constrained 
neighbors.
    Several industry associations, such as the Chemical Information 
Data Exchange (CiDX), the Water Environment Research Foundation (WERF), 
and the American Association of Railroads, are promoting cyber security 
among their subscribers. The Department of Homeland Security Control 
Systems Security Center (CSSC) established an Industry Interest Group 
to discuss asset owner's perspective of cyber security. Members of this 
group reported that at the operations levels within their company's 
organization, cyber security is important. However, at the board of 
director's level, cyber security seems less important because they may 
not see any risk to bottom-line profits. The group also reported that 
awareness communication tools would be helpful in convincing their 
management to invest in SCADA security, even though the perceived risk 
may be low at this time.
    The reason the National Cyber Security Division of the DHS 
established the US-CCU, with the support of the National Communications 
System and help from the DHS Private Sector Office, was that both 
corporate executives and government officials regularly reported they 
could not justify larger cyber security budgets without better 
information on the likelihood and costs of possible cyber-attacks.

    4. (Not Assigned)

    5. Can you tell us specifically how your research on SCADA has, to 
date, impacted the way SCADA systems in the field are secured, and what 
percentage of those systems have been impacted? If that's not a big 
number, what is stopping us from putting the results of your research 
into practice in the field?
    A result of our assessment work in the test beds is the 
identification of best practices that can be used to mitigate 
vulnerabilities by taking advantage of the capabilities already 
existing in the SCADA systems. Examples include ensuring fully patched 
operating systems, improving password management practices, and 
implementing layered security defenses (firewalls, DMZs).
    SCADA system vulnerabilities identified through assessments 
performed in the test beds have been communicated to the manufactures 
and users of those systems. In all cases, the vendors have taken quick 
action to incorporate system modifications to mitigate the identified 
vulnerabilities in their new systems, but only 5% of installed systems 
are new systems. Thus implementing enhancements in currently installed 
systems requires that owners be made aware of the vulnerabilities 
within their systems and the mitigating methods that are available to 
them.
    More than 230 user representatives from over 100 major electrical 
industry owners/users of SCADA systems have been made aware of typical 
vulnerabilities and methods for security enhancement. The percentage of 
the industry that is represented by 100 owners is difficult to answer, 
but in very general terms we can say that they control approximately 
80% of the power on the grid. This communication has been achieved 
through presentations and discussions in numerous electrical industry 
user group meetings and conferences. In addition to electrical industry 
interactions, workshops, demonstrations, training, and presentations 
have been provided to audiences responsible for control systems used 
across the Nation's critical infrastructure. In aggregate, these 
various forums have been attended by more than 7500 people from vendor 
and user companies.
    In addition to assessments, cyber security awareness workshops in 
nine regions involved 480 industry participants during FY-05 have made 
the industry more cognizant of the need to strengthen their SCADA 
systems. In FY-06, we will be providing asset owners additional tools 
to strengthen SCADA security through vulnerability assessments both in 
test beds and at participant selected facility locations. The value of 
the INL work, as perceived by a sample of industry/end users, has been 
previously stated (see INL's written testimony of October 18, 2005, to 
the same Subcommittees).
    We do not have access to data that would quantify the extent to 
which system owners are implementing our recommendations into their 
administrative and hardware/software management policies. This is 
typically information that is held close by the asset owners for 
competitive advantage reasons. Because the deployment of new systems 
occurs rather slowly (estimated at 5% annually for the installed 
infrastructure) the users, working with their vendors, can also design 
and implement mitigations specific to their systems. Thus the 
information we provide can be used to upgrade and improve configuration 
and management of currently installed systems.
    The reason for relatively slow system upgrades is the high cost and 
the lack of a strong business case (bottom line dollar impact) to 
justify both the expenditure for improvements and to justify requests 
for recovery through the rate base. A frequently raised issue is that 
if the requirements for security upgrades were mandated through 
regulation, the asset owners would have a stronger basis for requesting 
rate relief. However this brings with it the added burden of additional 
regulation to the industry and is therefore not strongly supported by 
industry.

    6. What has the money we have already spent on SCADA research done 
to improve SCADA security in the field?
    The work performed and supported by the Department of Energy 
National SCADA Test Bed (NSTB) in the Energy Sector and the Department 
of Homeland Security Control Systems Security Center (CSSC) Program on 
the other sectors, have improved security at critical infrastructure 
facility sites in significant ways:
         Awareness: As a part of the mission for both the NSTB 
        and the CSSC, cyber security awareness has increased in 
        industry and government. Information on potential threats, 
        vulnerabilities, and mitigation of cyber attacks on control 
        systems has been disseminated through workshops, outreach, and 
        training events at conferences, user groups, and invited 
        sessions. The increase in awareness of the potential for real 
        and serious impact to facility operations have resulted in 
        asset owners performing reassessments of their cyber security 
        for control systems.
         Assessment and Testing: CSSC and NSTB are engaged in 
        performing assessments of major control system SCADA vendors? 
        current products to identify both vulnerabilities and 
        mitigation. Some of the vendors have taken steps to eliminate 
        the identified vulnerabilities and shared the information with 
        their users. Working closely with the vendors and the user 
        community, the CSSC and NSTB provide a path to rapidly identify 
        and facilitate the use of this information to increase the 
        protection from cyber attacks. The success of these 
        relationships act as models to both the vendor and user 
        communities to work with these DOE and DHS programs. Several 
        site specific assessments have also been conducted at the 
        request of asset owners. Results of these assessments provide 
        direct and specific input to increasing SCADA security at those 
        sites.
         Technology Development: A key element of the CSSC 
        program is the identification and quantification of risk that 
        supports a business case to the asset owner for the policy, 
        time, and equipment investments to reduce risk to acceptable 
        levels. The characterization of vulnerabilities (control and 
        network systems), consequences (safety and national security), 
        and threats (beginner level to hostile nation state) coupled 
        with the cost of implementation of safeguards is a necessary 
        step in developing risk models and the business case. The CSSC 
        is active in working and coordinating efforts with industries, 
        industry and trade associations, government agencies, and 
        academia to identify gaps in technologies and standards to 
        apply to both current and legacy critical infrastructure 
        control systems. While these efforts are emerging, the broad 
        exposure of this work and participation of the stakeholders 
        will produce improvements in SCADA security that meet the need 
        for information protection coupled with business constraints 
        and will increase security awareness.
         US-CERT Support: The United States Computer Emergency 
        Response Team (US-CERT) provides response and capabilities to 
        support government and the private sector dealing with cyber 
        threat and attacks to the Nation's network communications and 
        computing infrastructure. The CSSC augments this capability by 
        providing expertise in control systems and the potential 
        vulnerabilities and impacts of cyber attacks. The CSSC has a 
        broad reach of assets within the national laboratories and 
        private sector to assess situational awareness during specific 
        response to events reported to the US-CERT. The CSSC, as a part 
        of the US-CERT in these activities, can issue alerts to be 
        distributed at a national level given that their may be real 
        and significant threats to control systems for certain sectors 
        or user communities. The goal of this capability is to provide 
        another level of information to those asset owners to increase 
        SCADA security to threats.

    7. Is there any risk of duplicating efforts with the lab beds at 
Sandia and Idaho and other research around the country?
    INL is directly involved in two programs, the National SCADA Test 
Bed sponsored by DOE/OE for the Energy Sector and the CSSC Program 
sponsored by DHS/NCSD for the other sectors. We are working with Sandia 
and others to complement what is needed to carry out the objectives of 
these programs and there is no duplication of efforts. Also to prevent 
the duplication of efforts, the sponsors (DOE/OE and DHS/NCSD) review 
the scope of work on the NSTB and Control Systems Security Center 
Programs.
    INL and Sandia each have unique and complementary SCADA 
capabilities. INL focuses on evaluating Cyber Security vulnerabilities 
of SCADA systems deployed in operational facilities and validating 
solutions; and penetration testing of control systems. Also INL has on-
site, full scale infrastructure systems such as electric transmission 
systems, substations, a pilot chemical plant and communications test 
beds that enable field scale evaluations. Sandia, on the other hand, 
has information technology red teaming and assessment capability, 
cryptography, and bench scale testing capability complementing INL's 
capabilities. The two Labs recognize their strengths and collaborate to 
provide the service needed to support asset owners and vendors.
    Because of the number and diversity of infrastructure facilities in 
the US requiring SCADA/Cyber security and the level of coordination of 
efforts between INL and Sandia, there is great value in having two 
national labs with capability and capacity to provide a wide range of 
assessment services to asset owners.
    INL, as the lead lab for the control system cyber security program 
coordinates efforts between labs utilizing specific expertise, 
facilities, and capabilities at each laboratory to perform its work. In 
January of 2005, a Leadership Steering Group was organized and consists 
of members from Idaho National Lab (INL), Sandia National Lab (SNL), 
Pacific Northwest National Lab PNNL), and Lawrence-Livermore National 
Lab (LLNL). The Group meets on a quarterly basis to discuss the 
direction of the program, coordinate efforts and deliverables, and 
identify expertise that is needed to solve issues and challenges. Ideas 
are exchanged and security products developed for various governmental 
customers are shared.

III. The Federal Government's Role in Cyber Security

    1. (Not Assigned)
    2. (Not Assigned)
    3. (Not Assigned)
    4. (Not Assigned)

    5. There are several SCADA test beds across the country. Is there 
any risk of duplicating efforts with the lab beds at Sandia and Idaho 
and other research? Is there anyway to consolidate these efforts?
    INL is directly involved in two programs, the National SCADA Test 
Bed sponsored by DOE/OE for the Energy Sector and the CSSC Program 
sponsored by DHS/NCSD for the other sectors. We are working with Sandia 
and others to complement what is needed to carry out the objectives of 
these programs and there is no duplication of efforts. Also to prevent 
the duplication of efforts, the sponsors (DOE/OE and DHS/NCSD) review 
the scope of work on the NSTB and Control Systems Security Center 
Programs.
    INL and Sandia each have unique and complementary SCADA 
capabilities. INL focuses on evaluating Cyber Security vulnerabilities 
of SCADA systems deployed in operational facilities and validating 
solutions; and penetration testing of control systems. Also INL has on-
site, full scale infrastructure systems such as electric transmission 
systems, substations, a pilot chemical plant and communications test 
beds that enable field scale evaluations. Sandia, on the other hand, 
has information technology red teaming and assessment capability, 
cryptography, and bench scale testing capability complementing INL's 
capabilities. The two Labs recognize their strengths and collaborate to 
provide the service needed to support asset owners and vendors.
    Because of the number and diversity of infrastructure facilities in 
the US requiring SCADA/Cyber security and the level of coordination of 
efforts between INL and Sandia, there is great value in having two 
national labs with capability and capacity to provide a wide range of 
assessment services to asset owners.
    INL, as the lead lab for the control system cyber security program 
coordinates efforts between labs utilizing specific expertise, 
facilities, and capabilities at each laboratory to perform its work. In 
January of 2005, a Leadership Steering Group was organized and consists 
of members from Idaho National Lab (INL), Sandia National Lab (SNL), 
Pacific Northwest National Lab PNNL), and Lawrence-Livermore National 
Lab (LLNL). The Group meets on a quarterly basis to discuss the 
direction of the program, coordinate efforts and deliverables, and 
identify expertise that is needed to solve issues and challenges. Ideas 
are exchanged and security products developed for various governmental 
customers are shared.

    6. (Not Assigned)

IV. The Federal Role in the Future

    1. Based on your knowledge of the SCADA research field, what are 
the most promising technological breakthroughs you see that can protect 
our SCADA systems in the short term? I realize there are no silver 
bullets, but please list the solutions that will actually work to 
protect our SCADA systems.
    Various emerging technologies show promise in protecting control 
systems. Deep packet inspection engines (optimized to detect control 
system packets) can guard for commands or injects traveling through 
unauthorized avenues like the organization's perimeter or corporate 
network. Memory cache integrity technologies can be used to detect 
malicious events like buffer overflows. Secure authentication 
approaches applied to SCADA protocols and emerging low-overhead 
encryption techniques are also promising. The optimization and use of 
these emerging security technologies should reduce some of the risk 
SCADA systems now face. In order to bring these technologies to bear 
more testing environments need to be used to test general IT security 
solutions and enhance them to work in control system environments.
    Near-term security enhancements can be most effectively implemented 
through taking advantage of existing technologies. This can be done 
through the definition and implementation of security policies based on 
the best practices identified in the test bed efforts and in industry. 
Best practices include defining the electronic perimeter, setting up 
layered defenses, monitoring communication traffic for anomalies (such 
as with intrusion detection and prevention devices), and establishing 
strong password management and system patching policies. Encryption 
technologies should be applied to eliminate plain text communication 
that can be monitored by an intruder to obtain system knowledge.
    On a longer term basis, secure programming techniques should be 
used in application code development as is now being done for operating 
systems and embedded applications.
    Much knowledge exists, but there is a gap between general IT 
security and SCADA security. SCADA systems have to be ultra-reliable 
and ultra-stable. If cyber-security is going to take hold in SCADA 
networks, the following must take place: (1) a testing location where a 
utility can test their configurations with expert support and advice 
must be developed and (2) a user community where users of the same 
SCADA system with the same problems can critique their architectures 
and perform peer reviews must evolve.

    2. How do we make rapid progress in improving security in the 
field?
    Increasing awareness among asset owners and vendors should be a 
priority because vendors must eventually implement the security 
measures. Another priority should be providing the ability to test the 
systems in an impartial manner. Third is providing the tools that are 
needed to mitigate the vulnerabilities and secure the systems. Finally, 
some consideration is required for financial incentives to accelerate 
cyber security implementation by asset owners. In all of these steps we 
should also look at the interlinked aspects of information technology, 
control systems and telecommunication and take a systems approach to 
dealing with this challenge. The key to success lies with increasing 
industry awareness, and industry associations can play a critical role. 
Many of these groups have already seen the need for improving cyber 
security in control systems and have started working groups or sub-
committees to address the issues and share information with their 
subscribers. As NCSD shares vulnerability findings and provides best-
practices for mitigation to these associations, they are transmitted to 
their members and mitigations are implemented.
    A good example of the security initiative within industry is the 
Chemical Information Data Exchange (CiDX). In January 2003, CiDX 
started the Chemical Sector Cyber Security Program. This program has a 
sub-committee that is devoted specifically to cyber security for 
control systems. They recently recommended that the CiDX subscribing 
companies perform self-assessments of their control system security 
posture. Several companies reported results at the October CiDX General 
Membership meeting in Houston. While, these self-assessments are still 
immature, their willingness to improve their security posture is 
commendable. The NCSD has developed a self-assessment tool to help 
associations like CiDX improve the effectiveness of their self-
assessment process. The tool will assist asset owners to focus on the 
critical cyber security requirements and associated compliance 
strategies to achieve improvements in security. In FY-06, the self-
assessment tool will be piloted with several asset owners in multiple 
sectors. After the piloting effort, NCSD will improve the tool, provide 
training at workshops in the various associations, and commence wide-
spread distribution and use of the self-assessment tool. This will give 
asset owners specific measures for immediate implementation and 
reduction cyber security risk.
    Rapid progress is based upon a multi-tiered approached that 
involves diverse stakeholders. This includes system integrators, 
vendors, and asset owners. Increasing security in the field will 
require each one of these stakeholders to develop better integration 
requirements that include improved security, hardened vendor systems, 
and increased situational awareness, respectively. Asset owners need to 
increase their awareness to control system cyber security and the 
inherent reliability benefits to addressing security, thereby 
requesting that secure system be purchased and integrated into the 
field.

    3. (a) Has the federal government advocated for standards 
establishing a minimum floor for securing control systems?
    While the argument could be made for a minimum floor standard, this 
may not be the solution for the long term. Since 85% of our critical 
infrastructure is owned by the private sector, it is their 
responsibility to adequately protect their assets and deliver the 
services and products to the customer at large. The liability that 
could result from a federally mandated minimum standard argues against 
such a standard. Also, the need for continuous improvement is 
disincentivized by a minimum standard. In our view, industry groups 
working together should come up with the best practice for their 
industry segments. The electric utility, chemical industry, and oil and 
gas industry have all come up with some type of best practice and they 
should be encouraged to make more widespread use of these practices. 
Similarly, other industries should come up with best practices for 
their segments with help from the federal government in terms of 
testing vulnerabilities and developing mitigation measures.
    The DHS (CSSC Program) and DOE (NSTB Program) both include tasks to 
support improvements to industry security standards. In addition to an 
ongoing review of standards applicable to control system security (with 
the goal of identifying areas that should be strengthened), activities 
include support to drafting ISA's SP-99 and a technical review and 
assessment of the standard for Secure ICCP.

    3. (b) What would a minimum floor look like?
    A minimum baseline standard should address areas that are important 
to cyber security in general, with an additional emphasis on areas that 
are of particular concern to control system security. Control systems 
are complicated and varied depending on their application. Developing 
standards that address security needs has begun (as outlined below, 
Question 3-e) but addressing the hundreds of needs for securing the 
complexities of control systems will require a large concentrated 
effort.
    Topics that should be addressed include: the assessment of risk, 
development of a security policy, organization of information security, 
management of assets, human resources, physical and environmental 
security, management of operations, access control, the acquisition, 
development, and maintenance of process and information systems, 
incident and business continuity management, compliance with legal and 
company policies. Standards should also address next generation systems 
to help ensure that security in ``built into'' emerging components and 
systems.
    Another area of concern is system integrators. Standards must also 
address network architecture to ensure that security vulnerabilities 
are eliminated at the system level.
    The CSSC has developed a cyber security protection framework that 
includes hundreds of high-level security requirements for the various 
components and communication links in control systems. These 
requirements have been compared with the myriad of existing cyber 
standards to identify gaps and overlaps in these standards. In FY-06, 
the findings of this review, along with continued reviews, will be used 
to recommend specific changes and improvements to the various standards 
bodies.

    3. (c) Have industries leaders begun the process of developing 
those standards already?
    Several industries, particularly chemical, oil and gas, and 
electrical, have made great strides in the development of control 
system cyber security standards. In addition, professional 
organizations and government bodies have contributed to the development 
of these standards.

    3. (d) Has the government established any ``best practices'' that 
can be modeled by industry?
    As mentioned above (Question 3-b), CSSC has collected an initial 
set of industry best-practices for complying with security requirements 
and standards. NSTB program is developing best practices aimed at 
mitigating the common vulnerabilities discovered during control system 
testing.
    Through both NSTB and CSSC Programs, best practices are being 
identified and shared with industry as stated in II-5.

    3. (e) What other standards activities are being developed besides 
AGA 12?
    Several cyber security standards aimed at industrial control 
systems have been developed or are in the process of development. Some 
of these may not be considered as standards in the strictest sense, but 
still provide guidance and direction. These include:
    AGA 12--The American Gas Association is in the process of 
developing a series of four standards recommending practices designed 
to protect SCADA communications against cyber attacks. To date, Parts 1 
and 2, which address Cryptographic Protection of SCADA Communications, 
are still in draft form.
    API 1164--The American Petroleum Institute released this standard 
on SCADA security to provide guidance to the operators of oil and gas 
liquid pipeline systems for managing SCADA system integrity and 
security. This document was released in September 2004.
    CIDX--The Chemical Industry Data Exchange has developed a Guidance 
for Addressing Cybersecurity in the Chemical Sector Version 2.1. This 
document describes key elements of a cybersecurity management system in 
the chemical sector.
    IEC 62351--The International Electrotechnical Commission is in the 
process of developing ``Data and Communication Security.''
    ISA TR 99 Parts 1 and 2--The Instrumentation, Systems and 
Automation Society (ISA) has published two technical reports addressing 
control system security with suggestions for securing control systems 
against cyber attack.
    ISA SP99 Parts 1 and 2--ISA is in the process of developing two 
control system cyber security standards. These standards, still in 
draft form, will provide requirements for securing control systems.
    NIST SPP-ICS--NIST has developed and released a System Protection 
Profile (SPP) to formally state security requirements associated with 
industrial control systems (ICS).
    NIST 800-82--NIST has developed SP800-82, a Guide for SCADA and ICS 
Security. It is in draft form with scheduled release January 2006.
    NERC 1200--The North American Electric Reliability Council (NERC) 
has developed and released this temporary standard to establish a set 
of defined security requirements related to the energy industry and to 
reduce risks to the reliability of the bulk electric systems from any 
compromise of critical cyber assets.
    NERC CIP-002 through--009--NERC is in the process of developing a 
series of standards aimed at entities performing various electric 
system functions. When released, it will replace NERC 1200.

    4. (Not Assigned)
    5. (Not Assigned)
    6. (Not Assigned)

    7. Some have mentioned the value of a ``vendor'' incentives system 
that would provide tax and other financial incentives to manufacturers 
who are producing control systems that are already in ``best 
practices'' compliance. How feasible is this, and have there been 
evaluations of the cost to the federal government?
    The first step in incentivization is enabling full reporting and 
disclosure of cyber security incidents, without attribution, similar to 
the FAA's Airline Pilot Reporting System. Included in this Cyber 
Security Reporting should be disclosure of the stringency level and 
thoroughness level of the reporting and assessments, so the frequency 
and magnitude of the problems can be analyzed. Then appropriate 
mitigation steps and incentives for implementation of these steps could 
be developed. With this incident information, other incentive options 
could be considered in light of the overall risk/benefit ratio.
    Another incentive would be to enable independent third-party 
testing and evaluation of control systems and techniques to mitigate 
vulnerabilities as is now provided through the DOE/NSTB Program to 
utilities and through the DHS/CSSC Program to all other industry 
sectors.
    The feasibility and cost of incentives would need to be studied 
closely to ensure the approach provided the right reward to maximize 
responsible action by vendors. The best vehicle, approach and resulting 
cost to implement have not been studied.

    8. (Not Assigned)

V. Dam Security

    (None Assigned)

   Donald Andy'' Purdy Responses to the Honorable Bennie G. Thompson 
                               Questions

    THE THREAT: PROBABILITY/IMPACT OF ATTACKS ON SCADA SYSTEMS

     Based on all available research, how likely is an attack 
on a SCADA system?
    Response: Attacks are already occurring against Supervisory Control 
and Data Acquisition (SCADA) systems/control systems; however, the 
number of incidents reported is few and the consequences associated 
with these reported attacks are generally not very significant. The 
NCSD Control System Security Program (CSSP) has reviewed data on 
approximately 120 documented cyber incidents against SCADA/control 
systems over the last 20 years. This data shows that the number of 
cyber attacks reported against SCADA/control systems has been 
increasing over the last several years and also shows that a larger 
percentage of attacks are coming from external sources as opposed to 
internal sources.
    As SCADA/control systems have greater interconnectivity to 
information technology (IT) systems external to the SCADA/control 
systems operating environment and increase their utilization of common 
open standards and protocols, the exposure of systems to outside 
entities and the number of vulnerabilities present in the control 
system environment will continue to increase.
    Insufficient data currently exists to accurately calculate the 
likelihood of a successful cyber attack against a SCADA/control system 
that would result in a catastrophic consequence. However, based on 
current scenarios developed by industry and the National Labs, the 
National Cyber Security Division (NCSD) believes that as the number of 
vulnerabilities, the number of people with intent to cause the U.S. 
harm, and the number of people with sufficient skills and capability to 
successfully execute an attack continue to increase, the likelihood of 
a successful cyber attack of significant consequence against SCADA/
control systems will continue to rise. The NCSD CSSP is working under 
the assumption that a cyber attack resulting in a significant 
consequence is likely to occur some time in the future. We are 
aggressively pursuing mitigation remedies to reduce the likelihood of 
cyber attacks on SCADA/control systems.
    NCSD is establishing a control system cyber attack response center 
through the United States Computer Emergency Readiness Team (US-CERT) 
with technical response teams active within the CSSP. The Cyber Storm 
exercise beginning in February 2006 will provide additional information 
on readiness and response capabilities and needs.
    NCSD is also working with the Intelligence Community to better 
collaborate on SCADA/control systems threat requirements and provide 
input on intelligence products.

     Based on all available research, how frequently are SCADA 
networks attacked?
    Response: Historically, there has been no consensus on a formal 
center in the U.S. for all critical infrastructure owners and operators 
to report cyber attacks against SCADA/control systems. US-CERT recently 
initiated efforts to serve as the central focal point for the nation's 
critical infrastructures to report SCADA/control systems cyber 
incidents and vulnerabilities.
    A reporting center operated by the British Columbia Institute of 
Technology (BCIT) also accepts voluntary submissions of SCADA/control 
system incidents. Owners and operators of U.S. critical infrastructures 
are hesitant to report SCADA/control system cyber incidents both 
because of concerns about how the information could potentially be used 
to harm the reporting organization, and also due to the absence of a 
clearly designated place to report cyber incidents.
    The NCSD CSSP combined cyber incident information from BCIT with 
information from other sources to examine approximately 120 documented 
cases occurring over the past 20 years. A majority of these reported 
SCADA/control system incidents (>70%) have occurred in the past 5 
years. However, it is widely viewed that the number of incidents are 
highly underreported. We are working with SCADA/control system vendors, 
owners and operators to raise awareness and increase cyber incident 
reporting to the US-CERT.

     I am interested in your assessment of the type of damage 
that you believe can actually result from a terrorist attack on SCADA 
systems. I think many people were shocked when on September 11, 2001, 
they learned that a single airplane could cause one of the World Trade 
Towers to collapse with huge loss of life. What are the corresponding 
scenarios for catastrophic damage that can be caused by someone who has 
taken the time to learn to control SCADA systems?
    Response: Intermittent or properly timed loss of control of a 
critical infrastructure control system can enhance the probability of 
incorrect operator responses, which can lead to accidents with serious 
physical results, such as fire, explosion, collisions, or loss of 
production.
    Two historic events affecting critical infrastructures where 
control systems could have played a contributing role include 
explosions at the Piper Alpha North Sea Platform and the Texas City oil 
refinery. The Piper Alpha platform explosion in July 1988 killed 167 
and resulted in losses which are estimated up to $15.2 Billion US. 
Although there was a combination of events that lead to this accident, 
incorrectly interpreted signals and early loss of the control room 
contributed to the disaster. The March 23, 2005 Texas City oil refinery 
explosion killed 15 and injured 170, and cost close to $1 Billion US. 
This accident did not involve a cyber attack, but the accident evolved 
as a result of the misinterpretation of signals and indicators, which 
could be affected by a cyber attack.
    The following are some examples of scenarios that show how cyber 
intrusions could result in physical damage, loss of life, environmental 
damage, economic loss, and/or loss of production in our nation's 
critical infrastructures.
    --The breach of security controls in the transmission mechanism for 
a regional power grid system could potentially allow a strategic attack 
to develop into a widespread blackout due to the unique cascading 
aspects of power transmission. Although the August 2003 East Coast 
blackout was not caused by a cyber attack, the failure mechanisms that 
caused that blackout are similar to those that could be achieved 
through a cyber attack.
    --The readings on chemical mixing tanks during the batch process 
could be tampered with by unauthorized network intrusion, forcing 
lethal and highly combustible reactions to occur without warning to the 
operators. Misinformation, exacerbated by improper response, is the 
cause of many industrial accidents.
    --Rogue access into the railway switching system within a major 
city could cause significant gridlock to commuter traffic and import/
export functions or potentially result in a train collision.
    --In a blended physical and cyber attack, quality and safety 
triggers in a metropolitan water facility could be subtly compromised 
allowing for normally unallowable levels of toxins or chlorine to be 
distributed into the city reservoirs and pumping systems.
    --According to the Network Reliability and Interoperability Council 
(NRIC),\1\ the growing use of Voice Over Internet Protocol (VOIP) and 
the interconnected nature of networks pose an increasing risk to the 
telecommunications infrastructure, in part because internet-based 
protocols are not as robust against security breaches as is traditional 
telephone technology. If operations centers or network management 
functions are compromised by combinations of cyber and physical attacks 
there could be a cascading effect that disrupts the communications 
capabilities of consumers, businesses and emergency first responders.
---------------------------------------------------------------------------
    \1\ The Network Reliability and Interoperability Council (NRIC) is 
a partnership of private sector entities and the Federal Communications 
Commission (FCC) that develops recommendations designed, in part, to 
assure optimal reliability, security and sustainability of the nation's 
telecommunications infrastructure during periods of exceptional stress, 
including terrorist attacks or similar occurrences. http://
www.nric.org/

THE FEDERAL GOVERNMENT'S ROLE IN CYBER SECURITY
     We saw during Hurricane Katrina that the federal 
government is unprepared to respond to a large natural disaster. Today 
we've heard about the devastation that may be caused if a terrorist or 
a natural disaster hits our control systems. Just last week, a headline 
in the New York Times read: ``US cyber security due for FEMA-like 
calamity?'' Are we prepared for a cyber attack on our control systems? 
Similarly, if a natural disaster hits our control systems, are we 
prepared to respond to that?
    Response: The NCSD CSSP is being proactive in preparing for events, 
both natural and man-made, that could potentially disrupt our nation's 
control systems and the critical processes and functions they monitor 
and manage.
    A major initiative being pursued by NCSD CSSP to prepare for 
catastrophic events against our nation's control systems is the on-
going effort to expand the US-CERT's current capability for responding 
to cyber incidents and vulnerabilities to include the ability to 
respond to incidents involving control systems. The NCSD CSSP provides 
the US-CERT Operations Center with control system expertise and support 
in responding to control system related incidents and in managing 
vulnerabilities affecting our nation's critical control systems. An 
important component of this US-CERT control system support is the 
utilization of the knowledge, resources, and control system expertise 
and cyber security expertise available among the national laboratories 
and the control systems community.
    NCSD is creating the infrastructure and processes to specifically 
deal with both cyber attacks against control systems and also natural 
disasters that affect control systems. NCSD received positive feedback 
from the control system community in response to the informational 
focus paper the US-CERT released to the control system community to 
assist owners and operators in restarting their control systems safely 
and securely in response to Hurricane Katrina. This document is 
available on the US-CERT web site: http://www.us-cert.gov/reading_room/
KatrinaCSA.pdf.

     On August 12, committee staff was told in a briefing with 
DHS officials that there are only two full-time DHS employees working 
on control system issues. How many DHS employees are currently working 
on SCADA/control system issues?
    Response: NCSD has authorized three government full time equivalent 
(FTE) billets for the CSSP. Currently, two of those three positions are 
filled and the third is expected to be filled in Q2 of FY06. In FY04, 
NCSD's CSSP determined that the control systems expertise necessary for 
the program to perform its mission was not readily available within the 
government and sufficient authorized FTE billets were not available at 
that time. In FY04, the CSSP conducted research to identify programs, 
facilities, capabilities, and resources, including national 
laboratories, which possess control systems and associated cyber 
security expertise and resources. NCSD utilizes these identified 
resources and capabilities to achieve mission goals and objectives.

     The Department established the Process Control System 
Forum (PCSF) to facilitate communication between government, industry, 
vendors, and academia. How effective has this endeavor been? How 
frequent have the meetings been?
    Response: The PCSF is a relatively new endeavor and it is difficult 
to assess its effectiveness at this point in time. DHS plans to conduct 
an independent audit of the effectiveness of the PCSF in Q3-FY06. The 
value of the PSCF is its ability to reach out to representatives from 
all of these stakeholder groups in all critical infrastructure sectors 
(such as chemical, water, energy and others) that utilize and rely on 
SCADA/control systems. The PCSF met four times in FY05 with its next 
meeting scheduled for June 6-7, 2006 in La Jolla, California
     DHS has gone through four cyber security managers--Richard 
Clarke, Howard Schmidt, Amit Yoran, and Robert Liscouski. How has 
turnover on the DHS cyber security team impacted the effectiveness of 
DHS to deal with a cyber attack? Mr. Liscouski left in January--Why 
hasn?t Secretary Chertoff appointed a replacement?
    Response: Addressing organizational issues is central to Secretary 
Chertoff's ``Second Stage Review'' (2SR) of the Department. The 2SR 
details a six-point agenda that includes improving DHS financial 
management, human resource development, procurement, and information 
technology, and realigning the DHS organization to maximize mission 
performance. Recognizing the importance of protecting critical cyber 
assets, Secretary Chertoff is increasing the authority for cyber 
security by placing the coordinated activities of the NCSD and National 
Communications System (NCS) under an Assistant Secretary for Cyber 
Security and Telecommunications. The new Assistant Secretary will 
report to the new Under Secretary of Preparedness. We expect that the 
new Assistant Secretary will be named in the near future.
     There are several SCADA test beds across the country. Is 
there any risk of duplicating efforts with the lab beds at Sandia and 
Idaho and other research? Is there any way to consolidate these 
efforts?
    Response: The NCSD CSSP completed an evaluation that identifies 
control system security-related programs among national laboratories, 
academic institutions, and agencies. This initiative evaluated the 
respective value of other's work to the CSSP; and provided 
recommendations on how selected program activities could be leveraged 
to reduce control system vulnerabilities. The focus was on domestic 
public sector programs because they could be more readily leveraged 
than activities in the private and international sectors. The results 
of this evaluation were utilized to identify where duplication of 
efforts might exist and also served as a roadmap to identify which 
groups the CSSP should work with.
    The Department of Energy's Idaho National Laboratory (INL) has been 
designated as the lead national laboratory in supporting the CSSP. 
However, the CSSP funds initiatives with several DOE national 
laboratories and the control systems community through a contract with 
INL. INL has been assigned the role of coordinating and leveraging 
efforts between labs utilizing specific expertise, facilities, and 
capabilities at each laboratory to perform its work. In January 2005, a 
Leadership Steering Group was organized, which consists of members from 
INL, Sandia National Lab, Pacific Northwest National Lab, and Lawrence-
Livermore National Lab. The Group meets on a quarterly basis to discuss 
the direction of the program, coordinate efforts and deliverables, and 
identify expertise that is needed to solve issues and challenges. Ideas 
are exchanged and security products that are developed for various 
governmental customers are shared.
    Moreover, utilizing more than one lab allows for additional 
development and verification of efforts. If only one group is able to 
address an issue, then the best achievable results are limited to what 
that group develops. Competition is a motivating force that compels 
people to work harder and faster to produce the greatest advances and 
best solutions. Constructive competition exists among those who are 
attacking SCADA/control systems, and therefore it is important to 
encourage competition among those seeking to protect our systems.
     This is more of a general question about fundamental 
Internet protocols. There has been significant discussion in the 
technology world about the security of the basic, underlying Internet 
protocols. In your opinion, how secure are these protocols? Is this 
something that DHS is examining?
    Response: There are, and likely will continue to be, security 
issues with Internet protocols. The Internet Engineering Task Force has 
a Security Area, http://www.ietf.org/html.charters/wg-
dir.html#Security%20Area, which has a number of individual working 
groups addressing these issues. NCSD currently does not have any 
efforts or projects dedicated specifically to studying a particular 
protocol, although efforts are underway within DHS to model SCADA/
control systems to better understand the disruptive effects of internet 
congestion to SCADA/control systems and the effectiveness of Next 
Generation Priority Services (NGPS) against these disruptions.
    There is a significant challenge with the lack of security, or 
verifiable security, in core internet protocols. Some application level 
protocols (such as Secure Shell and Secure Socket Layer) and their 
implementations have improved their security over the last few years. 
However, the core security problems with underlying protocols, 
transport layer and below (e.g., Transmission Control Protocol/Internet 
Protocol and Address Resolution Protocol), create long term security 
problems. Although some credible attempts at improving these underlying 
protocols are ongoing (e.g., Internet Protocol Version 6), the question 
of their overall security remains unanswered.
    The National Strategy to Secure Cyberspace (NSSC) calls out the 
fact that there are challenges with the existing Internet 
infrastructure. As a step toward fulfilling its responsibility for 
coordinating implementation of the NSSC with respect to the domain name 
system (DNS) infrastructure, DHS S&T is working to deploy the DNS 
Security Extensions (DNSSEC) protocol. The DNSSEC effort will enhance 
the security of a fundamental element of the Internet infrastructure. 
DNS is the hierarchical naming system that maps IP (Internet Protocol) 
addresses to more user-friendly but structured names; the extensions to 
the original protocol consist of a hierarchy of cryptographic 
signatures that assure the integrity of the DNS queries by providing 
origin authentication of DNS data, data integrity and authenticated 
denial of existence. These measures protect against tampering in caches 
and transmission and enhance the infrastructure's security, thus 
contributing to increased trust in the Internet and systems, services 
and markets that rely upon its secure operation. The DNSSEC protocol 
has been under development for more than10 years and was approved by 
the IESG in October 2004; it is awaiting final publication. The goal of 
this effort is to enable all DNS traffic on the Internet to be DNSSEC 
compliant. In operational terms, this goal translates into the 
following ideal: Every lookup request requires and receives only 
DNSSEC-validated answers. Achieving this operational goal occurs within 
the framework of four principal and interrelated tracks: technical, 
organizational, education and outreach, and public policy. The primary 
focus of this effort is on the technical issues and process of adoption 
and the organizational and outreach/ educational activities required to 
achieve resolution of the technical objectives and activities. DHS S&T 
has been responsible for coordination among government agencies, namely 
Department of Commerce (DOC), Office of Management and Budget (OMB), 
General Services Administration (GSA), Department of Defense (DOD), and 
several others.
    The NSSC also calls out the fact that there are challenges with the 
existing Internet routing infrastructure. As a step toward fulfilling 
its responsibility for coordinating implementation of the NSSC with 
respect to the routing infrastructure, DHS S&T is working with 
government and industry through the Secure Protocols for the Routing 
Infrastructure (SPRI) program within the S&T Directorate. DHS S&T has 
organized a series of workshops in the SPRI program to formulate an 
approach and a roadmap for securing the Border Gateway Protocol (BGP) 
in the Internet routing infrastructure. This workshop series has 
brought together people from academia, research institutions, 
government, and industry who have a thorough understanding of BGP 
technology, of BGP use in the Internet today, and of the business of 
providing internet service. Several techniques to secure BGP have been 
suggested, but none has won acceptance in terms of completeness, 
scalability or deployability. The workshops have been working towards a 
consensus of an acceptable, deployable security technique and a 
strategy for deployment. The SPRI initiative has been successful at 
bringing together the major Internet Service Providers (ISPs), router 
vendors, large-scale end users, government, and academia to identify a 
path forward to harden the routing structure of the Internet. This has 
included working with the major Internet registries, such as the 
American Registry of Internet Numbers (ARIN) and Reseaux IP Europeens 
(RIPE), and international participants from forward-looking countries, 
such as Sweden, Netherlands, and Japan.
    Relative to control systems, this issue is important because many 
companies are now using standard Internet protocols to communicate 
between the control room and the enterprise network. Control systems 
vendors are beginning to use core Internet protocols as their bottom-
most communication mechanisms on control system local area networks. 
Control system specific protocols tend to be insecure because they were 
not designed with security as a dominant focus, many are proprietary 
and depend on ``security through obscurity,'' and control system 
protocols have generally not been exposed and stressed from a large 
number of concentrated attacks from hacker groups.
     In 2003, the President, as part of an initiative to 
protect American infrastructure, ordered the Department of Homeland 
Security to create The National Infrastructure Protection Plan. This 
plan was due in December 2004. DHS released an Interim Report in 
February, 2005, which was criticized by the GAO for being incomplete. 
At the time the Interim Report was created, DHS pushed the due date for 
the Final NIPP back to November, 2005. When will the Office of 
Infrastructure Protection finalize the NIPP? What is the role of the 
National Cyber Security Division (NCSD) in NIPP? What role will your 
office be playing in the ``Final NIPP''?
    Response: The draft NIPP Base Plan was released for final review 
and comment on November 2nd, and addresses the Federal, State, 
territorial, tribal, local, and private sector roles and 
responsibilities for critical infrastructure protection. It will be 
completed in early 2006. The 17 critical infrastructure and key 
resource (CI/KR) Sector-Specific Plans (SSPs) will further detail risk 
reduction strategies related to their respective critical cyber 
infrastructure.
    As part of NCSD's participation in the development of the National 
Infrastructure Protection Plan (NIPP), NCSD is ensuring that the NIPP 
Base Plan includes content to address cyber security and the cross-
sector/cross-border cyber element of CI/KR protection across all 17 
sectors. NCSD also highlights cyber security concerns in an appendix to 
the Base Plan that provides additional details on processes, 
procedures, and mechanisms needed to achieve NIPP goals and the 
supporting objectives for cyber security. The cyber security appendix 
specifies cyber responsibilities for security partners, processes and 
initiatives to reduce cyber risk, and milestones to measure progress on 
enhancing the Nation's protection of cyber infrastructure.
    After the release of the ``Final NIPP,'' NCSD will continue to work 
with the relevant stakeholders to address cyber security and the cross-
sector cyber element of CI/KR protection as outlined in the draft. This 
will include developing the Information Technology Sector Specific Plan 
as the designated Sector Specific Agency for the IT Sector, providing 
guidance to other Sector Specific Agencies to address cyber security, 
and coordinating international aspects of cyber infrastructure 
protection.
     According to a New York Times article last week, DHS is 
spending $17 million of its $1.3 billion science and technology budget 
on cyber security. Committee staff was told in a briefing with DHS 
officials that there are only two full-time DHS employees working on 
control systems issues. Do you think the Department is devoting enough 
attention and resources for cyber security?
    Response: The Department is devoting significant resources and 
attention to the important area of cyber security, as described in the 
detailed answers to the questions above. NCSD and S&T continue to 
partner effectively to produce tangible results in an area that is 
constantly evolving. As described above, the NIPP provides a framework 
and roadmap for progress and unites Federal, State, local, and tribal 
governments and the private sector in the process for studying and 
identifying solutions to mitigate cyber risk. Additionally, recognizing 
the importance of protecting critical cyber assets, Secretary Chertoff 
is increasing the authority for cyber security by placing the 
coordinated activities of the NCSD and NCS under an Assistant Secretary 
for Cyber Security and Telecommunications. The new Assistant Secretary 
will report to the new Under Secretary of Preparedness. We expect that 
the new Assistant Secretary will be named in the near future.

  Questions for the Record from the Honorable Bennie G. Thompson for 
                               Larry Todd

    TOPIC I. THE THREAT: PROBABILITY/IMPACT OF ATTACKS ON SCADA SYSTEMS
    Question: Based on all available research, how likely is an attack 
on a SCADA system?
    Answer: The Bureau of Reclamation has no specific statistics on 
probability of attacks against SCADA systems in industry or the federal 
government at large. Reclamation assumes, however, given the importance 
of water and power infrastructure, that SCADA could be the target of an 
attack.

    Question: Based on available research, how frequently are SCADA 
networks attacked?
    Answer: The Bureau of Reclamation has no specific statistics on 
attacks against SCADA systems in industry or the federal government at 
large. Reclamation has monitoring systems in place and, to date, has 
not identified any attacks against our SCADA systems throughout the 
history of their operation. We believe this is due to the isolation of 
our SCADA systems from the internet.

TOPICS II-IV--No questions pertain to the Bureau of Reclamation

TOPIC V. DAM SAFETY

    Ouestion: Does the Bureau of Reclamation monitor only the 17 or so 
dams that it has created? Or is the bureau monitoring and conducting 
threat assessments to private dams as well?
    Answer: Reclamation has constructed manages 471 dams, 58 
hydroelectric powerplants, and other related facilities in the 17 
Western states. For security purposes, Reclamation has identified 280 
of these facilities as critical for completing security assessments. 
Reclamation reassesses these facilities on a periodic basis. A security 
risk assessment examines the threats, vulnerabilities, and consequences 
of a security event at a facility. Although Reclamation has provided 
some assistance to other Federal agencies, it does not monitor or 
conduct threat assessments for private dams.

    Question: Help me understand further the way that the control 
systems at our nation's dams are connected to computers far from the 
dams and what specific defenses you have put in place to protect those 
communications links?
    Answer: Reclamation uses leased lines and federal microwave 
channels to address nearly all long-haul communications between SCADA 
control centers and their outlying controlled sites. This is true of 
all significant and critical SCADA communications. In some instances 
UHF or radio communication hops may be employed to support less 
significant SCADA functionality where data collection and low-risk 
control functionality are involved. Short-haul communications employ 
fiber-optic copper cabling for communication between control system 
components that are widely distributed geographically. We use 
federally-owned microwave-based telecommunications systems. In a few 
cases, we also lease point-to-point circuits from telecommunications 
companies. These SCADA communications circuits are dedicated (not 
shared). Reclamation uses several protection methods including non-
Internet communications protocols and one-way communications paths. No 
SCADA system communication takes place over the Internet.

    Follow-up Question: Can those connections be used to open flood 
gates? And if in the when the reservoirs are full, someone did that. 
would there be a high probability of lives being lost? Have you had 
damage estimates done at maior Federal dams? Do know how many lives 
might be lost?
    Answer: None of the Reclamation spillway gates under SCADA control 
have a capacity greater than the safe channel capacity. Therefore, no 
lives can be lost by flooding outside the safe channel capacity by the 
mere operation of Reclamation SCADA systems. Instead, Reclamation 
typically relies on manual, on-site operation of the gates. For the few 
spillways that are operated with SCADA systems, safety measures are in 
place. The safety measures in place include: remote monitoring of gate 
position; control action timing relays that allow only limited raise or 
lower motion based on a single control action the gate will only raise 
or lower a certain percentage of its full travel based on one command); 
and manual SCADA control lockouts that must be physically and 
procedurally bypassed to enable SCADA control, thereby preventing SCADA 
control of critical fully supervised. In addition, some gates have 
limiting switches that only permit them to be moved a small amount at a 
time.
    From our dam safety program, we have estimates for each high and 
significant hazard dam of population at risk (number of individuals 
damaged including owned property) and loss of life in the event of 
complete dam failure. In many cases, we also have estimates of 
population at risk and loss of life in other flood situations such as 
failure of gates. We would be willing to give you a secure briefing to 
provide more information, at your request.

    Question: We have heard the story of a hacker control of some 
systems of the Roosevelt dam in Arizona, which holds 400 trillion 
gallons of water. What is the worst damage that could be done there? Is 
it possible to shut out on-site control? In other words, if someone 
hacked the system and tried to release the water, switch off a hydro-
generator, etc., one would assume that there is an on-site, physical 
override of the SCADA or Process Control System Is that true in all 
cases?
    Answer: It is true that, in 1994, a hacker dialed into a system 
that monitored the water levels of canals in the Phoenix, Arizona, 
area. This system was designed for water level monitoring only, and 
investigators concluded that the hacking incident posed no threat to 
safety. The story of a 12-year old hacker control of the floodgates at 
Theodore Roosevelt dam in Arizona in 1998 is, fortunately, only a myth 
of unknown origin.
    The discharge capacity of the one powerplant unit at Roosevelt Dam 
that can be controlled remotely by SCADA is small and well within the 
safe discharge capacity of the downstream Salt River. Such a discharge 
could also be easily handled at Horse Mesa Dam, Mormon Flat Dam, 
Stewart Mountain Dam, and Granite Reef Diversion Dam, all downstream of 
Roosevelt Dam. An intruder into the SCADA system cannot cause any 
releases of water from the dam that will result in any downstream flood 
damage or threaten the safety of any downstream populations.
    SCADA control capabilities can always be disabled at the controlled 
device (generator, gate, valve, etc.) via a manually operated local 
control switch.

    Question: Are stand-alone networks used at dams, or do you 
piggyback on the local phone network, the Internet, or some other 
existing outside network? Is there a Bureau of Reclamation policy on 
what networks can be used for SCADA/PCS?
    Answer: SCADA networks are isolated from networks other than 
similar SCADA networks. Reclamation's policy addresses all networks 
(including SCADA) and includes network expansions and extensions, which 
must be approved by Reclamation's Chief Information Officer. Approval 
adheres to guidance of the National Institute for Standards and 
Technology (NIST) and is based on internal vulnerability assessments.

    Question: Generally are the Cyber Security requirements of the 
Bureau of Reclamation department-wide or do have different requirements 
for each dam? If you have a Bureau of Reclamation Standard, is it the 
same as the Army Corps of Engineers, the Tennessee Valley Authority, 
and other federal agencies/entities?
    Answer: Reclamation applies the same baseline cyber security 
requirements to all of its systems, regardless of the type of system or 
its location. In some instances, additional security requirements are 
imposed because of the higher criticality or sensitivity of the 
information or functions processed by a cyber system. Many SCADA 
systems fall into this higher criticality or sensitivity category and 
are consequently held to higher security requirements. In all cases, 
however, these additional requirements are consistent with NIST and 
Federal Information Processing Standards (FIPS) guidance.
    Although the security foundation requirements for all federal 
entities are very similar for systems of similar sensitivity and 
criticality, civilian agencies, such as the Department of the Interior, 
are subject to the cyber security guidance published by NIST. Agencies 
under the Department of Defense, such as the Army Corps of Engineers, 
are subject to a different set of policy, standards, and guidance. 
Cyber security policy developed by the Department of the Interior and 
the Bureau of Reclamation will probably not be identical to that 
prepared by the Army Corps of Engineers, the Tennessee Valley 
Authority, or other federal entities. The differences, though, are 
likely to be in details related to meeting mission and organizational 
needs and requirements, not in foundational cyber security requirements 
or security best practices.

    Question: Do all Bureau of Reclamation dams use the Risk Assessment 
for Dams to assess the threat, vulnerabilities, consequences, and 
ultimate risk that the faces?
    Answer: Reclamation uses three methodologies depending on facility 
criticality. For National Critical Infrastructures, Reclamation uses 
the Defense Threat Reduction Agency assessments. For 50 of our critical 
facilities, we use the RAM-D methodology. For lower priority 
facilities, Reclamation uses the Matrix Security Risk Analysis (MSRA)

    Question: How Bureau of Reclamation facilities have done RAM-D or 
other assessments? Have those vulnerabilities been addressed so that 
security is up to an acceptable level?
    Answer: Following the events of 9-11, security was enhanced at all 
Reclamation facilities, with full time guards and patrols being 
deployed to the most critical facilities. Reclamation initiated 
comprehensive security risk assessments at all 280 critical facilities, 
completing the most critical facilities in 2002 and the less critical 
ones this past year. The assessments identified potential threats, 
vulnerabilities, and consequences. The assessments resulted in numerous 
recommendations for enhancing security through both procedures and 
facility fortifications. Recommendations for enhancing security 
procedures were implemented upon completion of the assessments, as they 
generally did not require new funding. Recommendations for facility 
fortifications require additional funding, and those are being 
programmed and implemented on a priority basis. Security fortifications 
are complete at one National Critical Infrastructure (NCI) facility and 
in progress at the other and several Major Mission Critical (MMC) 
facilities. Over 73% of all recommendations resulting from the risk 
assessments have already been implemented.

    Question: Dams are one of the Key Asset Sectors identified in 
Homeland Presidential Directive 7. Since the issuance of HSPD 7, how 
much has the Bureau of Reclamation's increased? Have you had to shift 
spending from other priorities to pay for security?
    Answer: Reclamation's enacted and requested security budgets have 
increased over the FY 2003 appropriated security budget of $28,440,000. 
Reclamation continues to take its security responsibilities seriously, 
and aligns security priorities with all other mission critical 
programs.
    Following is a brief summary of Reclamation funding for security 
for Fiscal Years 2003 through 2006:
        FY 2003: $28,440,000 appropriated
        FY 2004: $28,583,000 appropriated
        FY 2005: $43,216,000 appropriated 2006:
        FY 2006: $50,000,000 ($40 million appropriated $10 million from 
        beneficiaries)

  Responses from Dr. Sam Varnado to the Honorable Bennie G. Thompson 
                               Questions

    I. THE THREAT: PROBABILITY/IMPACT OF ATTACKS ON SCADA SYSTEMS
         (To all) Based on all available research, how likely 
        is an attack on a SCADA system?
    The probability of an attack by a dedicated adversary is not known. 
The probability of nuisance acts, occurring on a daily basis, is 100%.
    There is no current, reliable, classified or unclassified estimate 
of the specific probability of a malevolent attack on SCADA systems. 
However, we know SCADA systems are vulnerable. We also note an article 
in the June 27, 2002 Washington Post that these systems have been 
targeted by al-Qa'ida terrorists who have a great deal of capability 
and patience. There are signs that hacker coalitions and nation states 
are collecting information on SCADA systems. The sophisticated threats 
have significant financial resources and can attack at will. Because of 
the commonality of computing platforms in a networked system, an attack 
that is successful against one will almost surely succeed against them 
all, and at only slight additional cost to the attacker.
    SCADA systems are now moving from the old stand-alone legacy 
systems to systems that use the internet or local enterprise networks 
as the backbone. This means that all the current computer attack 
modes--worms, viruses, denial of service-can now deny or disable 
control systems. It is no longer a requirement for a successful 
attacker to be a control systems expert to bring down a SCADA system. 
These types of attacks occur daily.

         (To any of the labs) What cyber security failures and 
        incidents have you seen with SCADA networks?
    Sandia National Laboratories has performed numerous critical 
infrastructure assessments that identified common vulnerabilities in 
SCADA systems. The results are published in a paper entitled ``Common 
Vulnerabilities in Critical Infrastructure Control Systems'' that can 
be found at http://www.sandia.gov/scada/documents/031177C.pdf. This 
paper describes the types of vulnerabilities we have identified.
    In addition to our assessments, there have been the following 
documented incidents:
        It has been reported that in June 1982, exploitation of SCADA 
        software created a damaging attack on the Trans-Siberian 
        pipeline. The software that was used to run the pumps, 
        turbines, and valves of the pipeline was programmed to 
        malfunction after a specific time interval. The malfunction 
        caused the control system to reset the pump speeds and value 
        settings to produce pressures beyond the failure ratings of the 
        pipeline joints and welds. The result was the largest non-
        nuclear explosion (3 kilotons) ever seen from space.
    In January 2003, the ``Slammer'' worm disabled a monitoring system 
at the Ohio Davis-Besse nuclear power plant. The worm entered through 
an improperly secured network connection to a contractor's facility. 
The worm crashed the computerized panel used to monitor the plants most 
crucial safety indicators. This incident did not pose a safety threat 
at the time because the reactor was offline for repairs and the 
redundant analog monitoring systems were still in operation. However, 
this event illustrates the impact that a computer worm can have on a 
SCADA System. Reference: ``Slammer worm crashed Ohio nuke plant 
network'', Kevin Poulsen, Security Focus (19 august 2003): http://
www.securityfocus.com/news/6767
    In May 2001, attackers were apparently able to gain access to one 
of the computer networks at the California Independent System Operator 
(Cal-ISO) corporation. This hacking incident was apparently 
unsuccessful at penetrating any process control system network, yet it 
uncomfortably extended over a period of more than two weeks. Reference: 
``California hack points to possible IT surveillance threat,'' Dan 
Verton, Computerworld (12 June 2001): http://www.computerworld.com/
industrytopics/energy/story/0,10801,61313,00.html
    One verified attack occurred in April 2000 at Maroochy Shire, 
Queensland. Disruption of the SCADA systems that controlled the plant 
resulted in release of copious quantities of sewage into parks, rivers, 
and a hotel, severely fouling the environment. Reference: ``Hacker 
jailed for revenge sewage attacks,'' Tony Smith, The Register (UK) (31 
October 2001): http://www.theregister.co.uk/content/4/22579.html
    At about 3:28 PM Pacific Daylight Time on June 10, 1999, a 16-inch-
diameter steel pipeline owned by Olympic Pipe Line Company ruptured and 
released about 237,000 gallons of gasoline into a creek that flowed 
through Whatcom Falls Park in Bellingham, Washington. About 1.5 hours 
after the rupture, the gasoline ignited and burned approximately 1.5 
miles along the creek. Two 10 year-old boys and an 18-year-old young 
man died as a result of the accident. Eight additional injuries were 
documented. A single-family residence and the city of Bellingham's 
water treatment plant were severely damaged. As of January 2002, 
Olympic estimated that total property damages were at least $45 
million. The National Transportation Safety Board listed five reasons 
for the rupture. The fifth was Olympic Pipe Line Company's practice of 
performing database development work on the SCADA system while the 
system was also being used to operate the pipeline, which led to the 
system's becoming nonresponsive at a critical time during pipeline 
operations. Reference: http://www.ntsb.gov/publictn/2002/PAR0202.htm

     (To all) Based on all available research, how frequently 
are SCADA networks attacked?
    Again, the answer depends in part on how one defines ``attack''. If 
attack includes active scanning, attempts to take advantage of 
unpatched vulnerabilities, worms, viruses, and spyware, then any 
control system network connected directly or through a business network 
to the Internet is under constant attack. It is reasonable to assume 
that network-connected SCADA systems across the country are probed 
daily.
    There have not been many documented malevolent attacks of SCADA or 
control systems. Attacks do happen, and there are more attacks then we 
know about because some infrastructure owners are reluctant to report 
SCADA attacks. They worry about loss of public confidence and 
competitive issues. We have seen a few targeted attacks in our 10 years 
of experience.

     (To any of the labs) Is it possible to devise an attack to 
disable or disrupt a SCADA network for an extended period of time? If 
so, what is being done to mitigate such attacks?
    Yes, it is possible to disable or disrupt a SCADA network for an 
extended period of time. The exact method of attack depends on the 
individual circumstances of the SCADA network. The Maroochy Shire 
wastewater SCADA system attack in Australia is often cited because the 
details are unclassified. Whether one considers the consequences 
significant or not, the fact remains that disgruntled computer expert 
Vitek Boden caused a chronic disruption of a SCADA network for three 
months. His attack could have been more sophisticated and, possibly, 
might have caused greater consequences. More significantly, the SCADA 
components he attacked are commonly used in domestic water treatment 
systems. Sandia's internal research and development has discovered 
forms of attack that could result in even greater consequences. The 
details of these attacks are classified and would need to be shared in 
a different venue.
    The responsibility for mitigation is distributed among the SCADA 
network owner/operators, the SCADA network integrators, the SCADA 
equipment vendors, industry groups, and regulators. Even when one of 
the players takes responsibility for security, they can only mitigate 
the portion they control. Operators can put in place security policies, 
plans, and implementation, but they are at the mercy of vendors who may 
not provide features necessary for security. For this reason, the 
degree of mitigation of SCADA networks is highly variable.
    Mitigation effects may not be implemented for several reasons. 
First, a business case for industry to invest in SCADA security has not 
been clearly made. As a result, funding for security personnel and 
equipment are often inadequate.
    A second problem is natural attrition through aging of key 
personnel in utility operations. Taken together, it is probable that 
quick automation repairs will no longer be possible for many utilities 
in the very near future, primarily because of a shortage of trained 
personnel and old equipment. Backup manual operation is further 
exacerbated by the paucity of skilled and experienced personnel. There 
are also limitations on the number of field operators, to deploy to 
remote locations in manual situations when data are unavailable to the 
SCADA system. Therefore, if the loss of some automation functionality 
will likely cause severe problems for utility operations (including 
system management functions, system/plant automated control, or any of 
the supporting data categories), a redundant system and/or network is 
required.
    Third, classification, anti-trust, and proprietary issues get in 
the way of the open sharing of threat and vulnerability information 
among industry stakeholders.
    Sandia has been teaching courses on SCADA security assessment and 
best practices for mitigation to industry and government for several 
years. In that time, our message has been heard by some entities, who 
are now asking for more information. We have performed vulnerability 
assessments that continue to confirm the presence of common 
vulnerabilities.

     (To KP Ananth or Sam Varnado) Electric power is important 
for nearly all the things that Americans do--from businesses to schools 
to government to many forms of recreation. Has your research shown that 
the SCADA systems that control our power generation and distribution 
are fully protected from attacks launched from the Internet? If not, 
what kind of damage do your researchers believe smart, well researched 
attacks could cause?
    SCADA networks that control electric power generation, 
transmission, and distribution are not fully protected from attacks 
launched from the internet. Well researched attacks can cause burn-out 
of expensive, hard-to-replace equipment such as transformers. The 
duration of such outages could extend to several months. Other computer 
attacks, such as worms or viruses, could create outages lasting for 
days.
    Further information about the consequences of a smart, well-
researched attack is available at a classified level and could be 
provided in another venue.

     (To Sam Varnado, KP Ananth, Bill Rush) We've heard a lot 
about the impact of a terrorist attack on a control system. But as we 
saw during Katrina, natural disasters can cause devastating impacts to 
our control system infrastructure too. What kind of impact would a 
natural disaster have on control systems in California (earthquakes), 
Oregon (tidal waves/tsunamis), the Gulf Coast (hurricanes), and 
elsewhere?
    Terrorist attacks differ from natural disasters in that the 
terrorists take a functional attack perspective. In other words, they 
look to destroy or alter the functionality of a SCADA system. In 
contrast, a natural disaster is random and geographically dependant. 
Anything within the physical range of the disaster is affected. 
Anything outside is less likely to be affected. Many companies have 
created redundant control centers to better prepare for such disasters. 
The critical assets are identified and duplicated, and risk-mitigation 
plans are usually in effect.
    In some respects, certain natural disasters are easier to handle 
than focused cyber attacks. A crew made up of control specialists and 
physical facilities members can very quickly determine what physical 
assets have been damaged. These assets can be reordered and replaced 
like any other field equipment. Typically, control systems are composed 
of off-the-shelf parts and reordering is not usually a problem.
    Lack of warning is one aspect that makes response to some disasters 
more difficult. Hurricanes are different than earthquakes, tsunamis, 
and terrorist events. Damage can be minimized if there is enough 
warning to allow shut down. When the event happens with little or no 
time to prepare, the chance for damage increases. Listed below are the 
areas of concern, the disaster being considered, and the potential 
impact.

Gulf Coast:
Natural Disaster: Hurricane
Infrastructure: Oil, Gas, chemical, electrical
Impact: Because of pre-warning, these infrastructures are reasonably 
well equipped to deal with the disaster. Control system equipment can 
be damaged or destroyed, resulting in outages of service. However, if 
the infrastructure elements are shut down prior to the storm, damage 
can be minimized.

California:
Natural Disaster: Earthquake
Infrastructure: Oil, Electricity, Telecommunication, Natural Gas
Impact: Without warning, many of the infrastructure control systems 
could be severely damaged through physical destruction of computer 
facilities. Impacts could be severe and widespread. However, backup 
systems located in unaffected areas will help minimize the impact and 
help in system recovery.

Oregon:
Natural Disaster: Earthquake, Tidal Wave
Infrastructure: Oil, Electricity, Natural Gas
Impact: Tidal waves are of less concern than earthquakes. Most 
infrastructure assets are well protected from tidal waves by 
landmasses, but they lie in a critical area for earthquakes. Loss of 
electricity because of extensive physical damage could lead to failures 
in other infrastructures because they need electricity in order to 
safely shut down. In addition, the economy in the pacific Northwest 
could be severely impacted if electrical failures caused a disruption 
of port activities.
    The Department of Homeland Security's (DHS's) Infrastructure 
Simulation and Analysis Center (NISAC) at Sandia has created a number 
of relevant reports on the economic consequences of natural disasters 
as follows:
         Numerous Katrina reports on damage from Katrina both 
        before and after land fall
         A report entitled ``Infrastructure Assets in 
        Seismically Active Zones in the Pacific Northwest''; this 
        report addresses assets located in Washington, Oregon, and 
        Idaho
         Analysis of economic impacts of port disruptions in 
        the Pacific Northwest.
    Natural disasters affect all critical infrastructures. The 
interdependent nature of the infrastructure amplifies the consequences 
of disruption in any one sector. Fortunately, preparing for the 
abnormal natural disaster event also helps prepare for the malevolent 
attack. Many of the practices that Sandia teaches in our course on 
sustainable security are equally applicable to sustaining operations 
during natural disasters and recovering after those disasters.

II. THE PUBLIC/PRIVATE RELATIONSHIP IN DEVELOPING A SCADA SOLUTION
         (To any of the labs) I understand the National Labs 
        are conducting extensive research into SCADA and control 
        systems. What resources are you currently lacking? How are you 
        coordinating these efforts with the private sector? What can 
        the federal government do to provide you with more resources?
    Our biggest need is predictable, sustainable, multi-year funding 
tied to a well-defined research and development plan. We have 
outstanding well-trained staff who are experts in cyber security. 
However, cyber research has not been emphasized by DHS. DHS should 
ensure that the best technical capability in the country is applied to 
this problem. The national labs--particularly Sandia and Idaho national 
laboratories--have the necessary talent, but DHS needs more funding to 
apply to the problem.
    In addition, existing DHS programs, emphasize the conventional 
hacker threat. There is a need to address the more sophisticated 
threats such as those coming from terrorists and nation states. Sandia 
has outstanding capabilities in these areas, but they are not being 
applied to the SCADA problem.

         How are you coordinating these efforts with the 
        private sector?
    We are currently working with DOE and private industry to develop a 
roadmap for securing the nation's energy infrastructure from the cyber 
threat. In addition, we currently engage in a variety of outreach and 
awareness activities, including teaching vulnerability assessment and 
SCADA security courses to industry, making technical presentations, and 
providing the products of our research on a website, http://
www.sandia.gov/scada/. We participate in programs such as the Institute 
for Information Infrastructure Protection (I3P), Linking the Oil and 
Gas Industry to Improve Cyber Security (LOGI2C), Process Control 
Systems Forum (PCSF), and the National SCADA Test Bed (NSTB); all are 
aimed at fostering cooperation and coordination with industry. We also 
frequently host visits from industry to Sandia.
    Additionally, we provide training on risk assessment methodology 
and vulnerability mitigation to a wide range of industrial customers.

         What can the Federal Government do to provide you with 
        more resources?
    Funding should be increased for improvements in cyber security 
technology so that DHS can provide tools for
         high speed intrusion detection systems
         software assurance
         attack attribution and trace-back
         security modeling of existing and proposed SCADA 
        systems
         network visualization for mapping cyber disruptions
         triage of threat scenarios across many vectors
         assuring the reliable performance of commercial off-
        the-shelf (COTS) products. We need funding of $15M/yr to apply 
        to this problem
         models and simulations to understand the large-scale, 
        transient consequences of attacks on the power grid.
    Funding for a new program to address the sophisticated threat 
should also be provided. We anticipate that more sophisticated and 
strategically integrated cyber attacks--such as those that might be 
marshaled by a well-funded and highly capable terrorist or nation-state 
actor--will occur against control systems. An effort is needed to 
develop the analytic resources and technologies required to detect and 
predict these threats based on control system vulnerabilities, to 
strengthen our preventive measures, to increase our ability to respond 
expediently, and to model these more sophisticated threats and analyze 
the operational impacts they have on control systems. In general, this 
is a better role for national laboratories than for universities and 
private industry vendors. Sandia could lead this program. This effort 
should include a strong emphasis on the problems of building trusted 
systems from untrusted COTS components.
    Further, we need funds to work more closely with industry to 
provide in-depth vulnerability assessments of existing systems, to help 
industry utilize existing risk assessment models, and to formulate a 
business case for investment in cyber security.
    Finally, DHS needs to identify the commonalties in SCADA systems 
across all infrastructure elements and then define and coordinate 
efforts for improving SCADA system security across these 
infrastructures. Industry infrastructures owners should be provided a 
single point of contact for their interactions with DHS.

         (To any of the labs) It has been widely reported that 
        both industry and the federal government find it difficult to 
        estimate the economic impact of a cyber security attack. Has 
        the lack of actual quantifiable damages made the private sector 
        leery of investing in cyber security?
    At the I3P SCADA Security Conference in June 2005, held in Houston, 
panelists from industry made exactly this point. They said:
        ``The lack of quantifiable damages is one of the missing 
        components that would feed into the private sector's cost-
        benefit and return-on-investment analysis. The economic case 
        for investing in cyber security has to be stronger than the 
        economic case for investing in anything else before the private 
        sector will be compelled to make cyber security investments.''
    This observation illustrates the difficulty that industry is having 
in making a business case for investment in cyber security. There are 
two steps that will help overcome the noted deficiency. First, DHS 
should fund the national laboratories to work with industry in 
utilizing the lab's risk assessment methodology to help industry make 
the business case. Second, DHS should apply the skills of NISAC, run by 
Sandia and Los Alamos labs, to the problem of determining the economic 
consequences of infrastructure outages caused by cyber attacks.

         (To Sam Varnado, KP Ananth, Bill Rush) Can you tell us 
        specifically how your research on SCADA has, to date, impacted 
        the way SCADA systems in the field are secured, and what 
        percentage of those systems have been impacted? If that's not a 
        big number, what is stopping us from putting the results of 
        your research into practice in the field?
    We have directly affected relatively few systems, on the order of 
tens. Unfortunately, our program is small and the number of control 
systems is huge. We have indirectly affected--either by developing 
self-assessment methodologies or through outreach--on the order of 
hundreds of control systems. We have diffused our standards work to 
thousands of control systems. In spite of such efforts, we have only 
affected a small fraction of the control systems on which the nation 
depends for its current infrastructure security.
    The biggest obstacle to technology transfer is the business case 
issue. Even when industry believes there is a business case for 
security measures, they believe that they need only increase security 
enough to protect against the low-level threat--background noise, 
individual hackers, and possibly hacktivists. It is industry's 
contention that government should protect against the larger threats--
organized crime, terrorists, and nation-state threats--either through 
law-enforcement or national defense. We need to expand our public/
private partnerships to define best industry practices as a function of 
risk and cost, then develop and disseminate the appropriate technology.

         (To Sam Varnado, KP Ananth, Bill Rush) What has the 
        money we have already spent on SCADA research done to improve 
        SCADA security in the field?
    A specific instance of improved SCADA security is the work 
conducted to develop RAM-W, a self-assessment methodology for water 
utilities. Hundreds of water utilities used that methodology to help 
secure their SCADA systems. One particular utility, Washington 
Aqueduct, operated by the US Army Corp of Engineers, has benefited 
directly from the assessment and the secure design requirements that 
Sandia provided for their new SCADA system as a follow-on project.
    We have been active in international standards organizations by 
helping to provide a security perspective to their guidelines, by 
developing training classes, and by developing self-assessment 
methodologies. We have also developed technology to secure 
communication links and improve cryptographic research.
    We have published and distributed to industry a report entitled 
``Common Vulnerabilities in Critical Infrastructure Control Systems.'' 
We have also provided training courses to industry on vulnerability 
assessments of SCADA systems as well as risk assessment methodologies 
to help industry solve its own problems.
    Further, we have identified specific vulnerabilities in SCADA 
systems from several vendors. We have also explained to those vendors 
how the vulnerabilities can be mitigated.
    Over the last ten years, Sandia has invested in SCADA security 
research, through its own internal research and development funds, on 
the order of $4 million. Currently we are funded through external 
sources--DHS, DOE, industry, and university collaborations--at 
approximately $3 million this fiscal year. This level of funding is not 
adequate to address the very hard problems that SCADA security 
presents.

         (To Sam Varnado, KP Ananth, Bill Rush) Is there any 
        risk of duplicating efforts with the lab beds at Sandia and 
        Idaho and other research around the country?
    There is no duplication. The efforts are complementary, with each 
lab applying its unique capabilities to different parts of the 
problems.
    The test bed at Idaho National Laboratory is designed to 
demonstrate the effects of cyber attacks on large scale physical 
structures. It is a unique facility.
    The test bed at Sandia is in reality a SCADA security laboratory 
that conducts leading-edge research on cyber security methods such as 
vulnerability assessments, cryptography, security of wireless networks, 
and threat analysis. It provides the capability to test the robustness 
of SCADA systems from various vendors in a laboratory environment at 
low cost. It is also set up to evaluate the more sophisticated 
adversaries.
    Further, DHS manages the work at both labs and provides a program 
manager to make sure tasks are assigned in a way that avoids 
duplication. It is important that DHS understands and acknowledges the 
uniqueness of each lab and works to make sure that the participants at 
one lab do not duplicate existing capabilities at the other lab.

III. THE FEDERAL GOVERNMENT'S ROLE IN CYBER SECURITY
         (To Andy Purdy and ALL) There are several SCADA test 
        beds across the country. Is there any risk of duplicating 
        efforts with the lab beds at Sandia and Idaho and other 
        research? Is there any way to consolidate these efforts?
    See our answer on duplication under the preceding question.
    Consolidating these facilities does not make sense because they 
have separate roles. One is a large, full-scale test and demonstration 
facility; the other is a state-of-the-art research facility needed for 
developing countermeasures for the increasingly sophisticated threat 
environment.

IV. THE FEDERAL ROLE IN THE FUTURE
         (To Sam Varnado and K.P Ananth) Based on your 
        knowledge of the SCADA research field, what are the most 
        promising technological breakthroughs you see that can protect 
        our SCADA systems in the short term? I realize there are no 
        silver bullets, but please list the solutions that will 
        actually work to protect our SCADA systems.
    First, industry infrastructure owners need to define security 
policies and best practices for their own systems. Security is not just 
a technology problem. It is one of sustainable security--hardware, 
software, people, and procedures. Employees need to be trained in 
detecting attacks. Widespread adoption of best security practices has 
high payoff and low costs. If all control systems implement best 
security practices, the bar will be raised against all adversaries.
    Second, the latest security advances such as intrusion detection 
systems, firewalls, encryption, and other technologies should be 
applied. For example, the application of new Layer 3 firewalls in 
switches is emerging and shows promise for improving the security of 
control systems.
    Third, vulnerability assessments need to be performed on all major 
SCADA systems. Then the identified vulnerabilities need to be 
mitigated.
    Finally, a strong, sustainable R&D program needs to be implemented 
to continue to develop technology for countering new, more 
sophisticated threats by hackers and cyber terrorists who change their 
attack methods on a very frequent basis.

         (To any of the labs) How do we make rapid progress in 
        improving security in the field?
    We must help infrastructure owners develop security policies and 
train their people.
    We must provide incentives and liability relief to developers and 
adopters of security technology. The Safety Act is a good step in this 
direction.
    We must support more research into robust, distributed, 
introspective systems; more research into secure operating systems; 
and--to achieve a high level of security--implement a dedicated 
internet protocol (IP) and a redesigned IP stack for SCADA use only.
    We must enable greater access to, and partnerships among, vendors, 
labs, and asset owner/operators in order to better understand industry 
facilities, processes, and more technology from the labs to the field.
    We must provide better and clearer communication among 
organizations working on cyber security to help us develop consensus on 
the best security solutions. We must also promote opportunities to 
provide awareness and training to vendors and asset owner/operators.

     (Any of the labs) Has the federal government advocated for 
standards establishing a minimum floor for securing control systems? 
What would a minimum floor look like? Have industry leaders begun the 
process of developing those standards already? Has the government 
established any ``best practices'' that can be modeled by industry? 
What other standards activities are being developed besides AGA 12?
    To our knowledge, three government initiatives exist today to 
address securing control systems by providing guidelines and/or cyber 
security requirements to industry: (a) the Technical Support Working 
Group (TSWG) ``Securing Your Industrial Control System'' guide book; 
(b) the NIST release of the ``Guide to Supervisory Control and Data 
Acquisition and Industrial Control System Security''; and (c) the DHS 
US-CERT Control Systems Security Center (CSSC) Program cyber security 
protection framework, which includes a set of cyber-security 
requirements planned to be released in 2006. Whether these individual 
government released documents constitute a ``minimum level of 
standards/guidelines'' is not clear.
    From our experience, a minimum set of security control system 
standards would not come from a single standards body but would most 
likely comprise the work of various standards bodies. There is no 
single standards body to provide a comprehensive list of control 
systems cyber security standards.
    Industry-led standards bodies have begun developing standards to 
address the issue of securing control systems. However, dozens of 
groups/organizations currently exist that are working on control 
systems security standards. Coordination of these efforts is both 
essential and, at the same time, difficult. Inconsistent and 
conflicting standards generated from these various groups confuse 
industry and asset owners/providers. A more concerted effort on the 
part of the government is needed to assist industry and asset owners in 
(1) maneuvering through the abundance of control systems cyber security 
standards and (2) encouraging them to develop consistent control 
systems cyber security standards across all critical infrastructure 
sectors. A single point of contact within DHS for cross-sector 
involvement in control systems cyber security standards is needed. This 
point of contact would facilitate and assist in directing industry 
partners to relevant security guidelines, practices, and standards, and 
it would encourage consistent application of cyber security standards.
    Other standards bodies include API 1164, CIDX, FIPS Pub 200, ISA 
SP99, NERC, and NIST SP800-53--as well as others too numerous to list. 
The international standards bodies (e.g., IEC) are an important group 
because the majority of SCADA vendors are international and follow 
those guidelines.

     (To any of the labs) Some have mentioned the value of a 
``vendor'' incentives system that would provide tax and other financial 
incentives to manufacturers who are producing control systems that are 
already in ``best practice'' compliance. How feasible is this, and have 
there been evaluations of the cost to the federal government?
    Best practice compliance can be conducted at a component or sub-
system level if clear metrics are established to define the practice. 
But even here care must be taken not to impose a standard on something 
that a later technology might supersede. Cyber security technology is a 
rapidly changing field.
    Great care would need to be taken to insure that the ``best 
practice'' standards would not be negotiated down to the point that 
companies just need to fill out the right forms and jump through the 
right legal hoops--doing little to actually improve security. A third 
party, Underwriter's Laboratory approach may be necessary to properly 
evaluate vendor's products and validate claims. Some analysis should 
also be performed to determine the appropriate incentives for 
compliance (industry, company, product, etc.).