Risk and Security LLC

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Gulf Oil Spill

Threat Modeling is the Exciting, Sexy Part of Risk Assessment

As a risk assessment professional, when I get into a risk discussion, most security people want to talk about THREAT!  Threat is the most sexy and exciting part of doing a risk assessment.

Threats are exciting all by themselves.  Think about all the threats you can name:

All the natural disasters like Earthquakes, Tornadoes, Storms, Hurricanes, Tsunamis, Lightning, Floods

Crimes like Homicide, Assault, Rape, Burglary, Theft, Kidnapping, Blackmail, Extortion

Terrorism like Sabotage, Explosions, Mail Bombs, Suicide Bombs

All the IT Threats like Malicous Code, Disclosure, Data Breaches, Theft of Data

And about 50 more including Chem/Bio incidents, Magnetic waves, High Energy Bursts, Microbursts, Contamination and Reputation Damage.

Each of these threats could theoretically occur at any time, but we try to establish a pattern of how often they have occurred in the past, in this location, in this county, in this country, in the company, etc.   So NASA, for example, gets thousands of hacker attacks, but another company, like the local Salvation Army, gets 1 every 10 years.

Same model for natural disasters, although you might have to factor in climate change, it’s easy to get the threat incidents for hurricanes in Florida, snow storms in Cleveland, earthquakes in northern California, etc.

We also like to examine industry specific data to see if some threats are higher in a certain industry, like the high incidence of workplace violence incidents in hospitals and high risk retail establishments (like Wawa or 7-11).

Another factor we use in calculating threat likelihood is how the threat could actually affect different types of assets…. for example, would an earthquake damage a car?  Probably not. Would it cause damage to an old historical building – probably (unless it had been retrofitted).  Could it cause loss of life, or injuries (think Haiti).

So I use a multidimensional model that takes the threats list (I have a standard list of 75 threats that I use), and map it to each potential loss, based on the ‘asset’ that might be affected.

The more data you get, the better your model will be, and the more value it will have as a decision support tool!


Return of the Sea Monster as a Force of Nature

Last week I wrote about the oil spill in the Gulf and today I was looking at my Loch Ness model of a sea monster with a cute little red beret.  I thought about the concept of a SEA MONSTER. Any terrible  sea monster worth its salt would:

     1.  Kill things indiscriminately

     2.  Hide under the water until it is unleashed on an unsuspecting world.

     3.  Be very hard to kill or subdue.

Sound familiar?  Because the gulf oil spill IS a Sea Monster – probably worse because the Spill Monster doesn’t just kill virgins and itinerant fishermen – it kills everything.  Kills grass and insects and crustaceans (like shrimp) and also sucks the oxygen right out of the water so it doesn’t just kill everything now and then go about its business, but it makes recovery impossible.

If I was a senator or congressman I would be drafting up a bill requiring drilling AND mining companies to not only do a complete and comprehensive risk assessment PRIOR to exploration or drilling activity, but also to publish their contingency plans, disaster recovery plans and emergency plans.

Somewhere along the way – the phrase “disaster recovery” planning got pinned to the information technology recovery but it really applies to everything and certainly to risky endeavors like mining and drilling.

It would be tempting to say that the risk assessment and disaster recovery planning (in the broad sense) should be required on everything that has the potential to adversely affect the planet.   Who would administer it?   This is where the U.S. is again trapped into a corner by the responsibilities of each federal agency.  

In a perfect world, you’d like to think that the EPA (Environmental Protection Agency) would be in charge, but that, under the present structure, would exclude deep sea drilling and agribusiness concerns.   Because the EPA is regulating toxic substances like chemicals, and air quality, but not everything that affects the ‘natural environment’.

We need an ENVIRONMENTAL OMBUDSMAN to protect the citizens of the United States, and maybe of the whole world.   This position would cut across the current agency lines to include oil drilling/extraction; mining as in strip mining;  use of pesticides in agribusiness; industrial pollution of rivers, lakes and oceans; and deforestation.

Over-fishing belongs in the same category.  I have heard that Blue Fin Tuna is now endangered and the United Nations is going to vote this year on protective measures. 

Basically all these kind of industries, mining, drilling, fishing are all scooping raw material up out of the earth and selling it.  The companies involved seem intent on drilling, fishing or scooping up as much as they can get of FREE STUFF from the planet, and then selling it for enormous amounts of money.  Again, you would think that old self-preservation gene would kick in, but instead, it may be that when one of these industries hears that whatever they are taking could be limited, or managed, or made less easy to get, they rush to get every more before the limit or ban goes into effect. 

This behavior accelerates the underlying diminishing supply problem, drives up prices, making industries want to get even more of their oil, minerals, diamonds, fish, whales, or whatever and so the cycle becomes maximally destructive to the environment on even a shorter time line.

One of the biggest aggravating factors of the current SPILL MONSTER is that we, the taxpayers, basically financed it and now we are going to get to pay to clean it up, and the paying includes providing services for all the damaged parties.  Do you really think that BP is going to cover the entire costs by the end of the day?  I am highly skeptical.

We keep hoping that man’s (and woman’s) survival instinct is going to kick in at some point and people will think, “If we don’t keep the earth clean, it is going to negatively affect MY health, or MY business, or MY customers”, but we, as a country, are not quite a that tipping point yet.   I hope we get there sooner instead of later.

The Oil Rig Disaster and Risk Assessment — And Accountability Issues with Politicians

“Drill, baby, drill.”   We have heard that before – being from California and being a tree-hugger, I didn’t think that was a great idea, especially since I know our oceans are already struggling, but I did not expect something this bad to happen.

The politicians who were so busy expanding oil leases and the profit-rich oil companies who are raking in billions,  don’t spend much time on assessing the potential risks AND the potential losses for a catastrophic oil spill.

Maybe we should require them to do REAL risk assessments on the total possible impact of an oil disaster.    It would not be an environmental impact statement, which downplays the risk by putting in lots of scientific jargon and ASSUMES that proper safety controls and contingency plans are in place.  But obviously that either was not done;  or it was not accurate, or it was done and burned so no newsperson would ever see the smoking document (or should I say, the oily document).

If we go back to the classic risk model – we are by listing the assets at risk:

  1. The Cost of the Original Rig and Drill Equipment – $500,000,000
  2. The Value of the Lives of the 11 workers who died –    25,000,000
  3. The Value of the Oil itself, with replacement value
    (5 million gallons at  $2.00 per gallon = $10 million dollars)
  4. BP’s Reputation as a good company – $2 million
  5. Gulf Fishing and Shrimp Industries Value – $2.5 billion dollars for

Just Louisiana – add in Alabama, Mississippi and Florida and quickly     the bill runs up to $10 billion dollars.

  1. Value of Summer Beach Tourist Business in the Gulf – $20 billion
  2. Value of lives of 20,000 – 50,000 shorebirds; 10,000 turtles; 0ther assorted marine mammals, birds, and fish   – $25 million.

So we have a resource worth about $33.5 billion dollars – that is potential loss estimate.

What we will lose if a threat materializes?    Keep in mind, for comparison purposes, that BP had recently doubled it’s profits from $3 billion to $6 Billion a quarter,  which calculated out to about  $24  Billion Dollars a Year.

Next we factor in the likelihood of a threat occurring.  Reviewing the frequencies of and problems problems with oil rigs, and oil spills, we find:

There are an average of about 2000 oil spills a year of various degrees.

There are an average of 1 million gallons spilled each year (going back 7 years).

(Already you can start to get a idea of how terrible this spill is.)

Next we list all the problems (vulnerabilities) that could or would have made it more likely to have a disaster occur,  you will recognize many of these from the latest news conference

  1. New,  untried technology
  2. No recovery plan if secondary shut offs fail
  3. Difficulty of working on deep ocean
  4. No reliable oil containment systems have ever been developed

SO – if British Petroleum is making $24 BILLION A YEAR and because of this spill, BP loses about $1 billion dollars. That’s not a bad Return.

The problem comes in with the $30 Billion dollars that is borne and felt, not by BP, who goes on to drill somewhere else, but by the citizens of the affected states and the whole United States due to the incalculable environmental damage.

The last thing we look at in a risk assessment model is the potential controls that could have been put in place to reduce the likelihood of the threat materializing, and the cost of those controls that could either reduce the threat, or, and even more important in this case, minimize the damage if the threat occurs anyway.

What controls could have been improved in this model?

Development of effective oil capping techniques BEFORE a disaster

Better training of oil rig workers

Better fire controls which might have saved the rig from sinking.

Accountability Increased for the Materials Management Service (MMS)

Tougher Regulations for Oil Companies

Better oil containment tools

Better oil absorption tools

Regular drills so that workers are better prepared in an emergency like this.

I’m still here watching the news coverage but I have learned why this happened – because BP was making so much money, it just didn’t have that much to lose from a disaster.  So it avoided improving its technology and spending money on controls that might have helped.

And the former and current U.S. administrations are to blame for not requiring accountability from the MMS.  And the rest of us, including the bluefin tuna, the birds, the jellyfish, the crabs, the shrimp, bottlenose dolphin, sperm whale, dozens of varieties of sharks, manatees, oysters, warblers, terns, swallows, egrets, plovers, sandpipers, pelicans,  loggerhead turtles, Ridley’s turtle, diamondback terrapins, and alligators.

According to the Louisiana Department of Wildlife and Fisheries,   here are the numbers of species that will be affected:

445 species of fish,

45 species of mammals

32 species of amphibians and reptiles

134 species of birds,
and the ocean itself, and all of us.