Interpreting the "Gershwin Report"

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The intelligence report given this past week by Lawrence Gershwin, National Intelligence Officer for Science and Technology to the Horn subcommittee had the usual disclaimers about the difficulty of calculating Y2K consequences.

However, the intelligence community doesn't usually lie outright to Congress, for obvious reasons. We can assume that declarative statements within this report are credible.

Keeping in mind that this report concentrated on international issues, these two points seem germane to this forum:

1. "...the Netherlands has expressed concern that the EU members are not working together to solve Y2K problems, and has threatened to cut off its power grid from the rest of Europe in order to protect domestic power distribution from external problems."

Even taking into account the usefulness of the "politics of pressure" to get things done, it is remarkable that a government would take this postion with its allies as early as January 99. Compare it to Alliant or Comed "threatening" to cut itself off from the rest of the North American grid.

Minimally, this implies that the Netherlands is in possession of enough reliable information to convince it of extraordinary national exposure on this subject.

2. ". . . this sector (oil) is highly intensive in the use of information technology and complex systems using embedded processors, and is highly dependent on ports, ocean shipping, and domestic infrastructures.

. . . We are concerned about the shipping of oil products, because ocean shipping and foreign ports have both been flagged as among the least prepared sectors."

Keeping in mind that the entire report is a litany of how unprepared *most* world sectors are, including the blanket statement that "we have few indications that countries are undertaking contingency planning for recovery from Y2K failures," it would appear that oil specifically and the shipping of needed raw commodities generally is at the highest risk of any international sector.

Omitting the foreign policy implications, which are irrelevant here, my understanding is that many of our utilities rely heavily on oil and oil byproducts just as does any large industrial enterprise. Without those products, they cannot function.

It is also my understanding that, with few exceptions, utilities are essentially expecting "business as usual" with respect to supply of oil.

Given the confused picture painted, at best, from the NERC data, with no external auditing of the industry, combined with the lateness of the date (January 99) and the exposures detailed by Gershwin (the Netherlands is not the U.S. but the example is striking and pertinent, IMO), it would appear prudent for individuals and communities to prepare for energy disruptions up to the limit of their financial capabilities. These disruptions should be viewed "broadly" ranging from power outages for undetermined periods of time to skyrocketing fuel prices and lessened fuel availability.

The report itself makes plain that, "As the time for greater likelihood of failures comes nearer, awareness of, and reporting on Y2K problems abroad should increase dramatically, and we thus expect to have a better handle on the type and extent of failures we are likely to see around the world."

"Knowing more" and "preparation" are inversely related for individuals due to the scarcity of supplies for preparation. We will certainly know more by July, more still by February of 2000. But we will be far less able to prepare by July .....

-- Anonymous, January 23, 1999

Answers

The oil industry does look especially vulnerable. There was an article in the trade journal "World Oil" last April that noted there simply wouldn't be time to check 70% of embedded systems in U.S. oil refineries. When one factors in the embedded systems in pumping stations and pipelines, and in oil production & distribution facilities overseas, there's obviously cause for concern.

Also, Peter Gauthier noted on his website that the designer of Japanese SCADA (Supervisory Control And Data Acquisition) systems used widely in Middle Eastern oil production facilities told him that these systems were not Y2K compliant and would not be made so in time. According to Mr. Gauthier, the Japanese write "fat" code and are rather obsessive about tracking historical (i.e., date-dependent) data, so their SCADA systems tend to be more at risk than ours.

-- Anonymous, January 23, 1999


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