China’s threat to energy security requires state-level action

On January 31, 2024 FBI Director Christopher Wray testified before the House Select Committee on the Chinese Communist Party, stating:

“China’s hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities, if or when China decides the time has come to strike.”

Wray was referring, in part to the discovery of malicious Chinese malware embedded deep inside networks controlling “power grids, communications systems and water supplies that feed military bases in the United States and around the world,” first publicly reported in August 2023 by The New York Times. Wray’s testimony made clear that the malware can not only impact the infrastructure supporting the U.S. military, but that it has the ability to adversely affect the civilian sector as well.

That the Chinese military would attack civilians is not just theoretical, since the People’s Liberation Army (PLA) draws its battle plans from the seminal work “Unrestricted Warfare” published in 1999 by two PLA Colonels who wrote (on page 145):

“Supposing a war broke out between two developed nations already possessing full information technology, and relying upon traditional methods of operation…if the attacking side … at the same time carrying out a network attack against the enemy so that the civilian electricity network, traffic dispatching network, financial transaction network, telephone communications network, and mass media network are completely paralyzed, this will cause the enemy nation to fall into social panic, street riots, and a political crisis. There is finally the forceful bearing down by the army, and military means are utilized in gradual stages until the enemy is forced to sign a dishonorable peace treaty…” [emphasis added]

Wray said that there’s been “far too little public focus” on the types of cyber threats that affect “every American.”  A month earlier, Wray testified before the Senate saying “I see blinking lights everywhere I turn” – harkening back to the ignored warnings prior to the 9/11 attacks.

Unfortunately, there are many more “blinking lights” than just Chinese malware. China’s Unrestricted Warfare has put a major emphasis on using our supply chain as a vector of attack.

Their plans involve overall political influence and economic warfare to strengthen China while weakening the U.S.  China influences U.S. leaders to embrace certain forms of electricity generation such as wind and solar and to promote widespread electrification of transportation infrastructure – which causes the U.S. to invest heavily in China who manufactures these assets.

It is important to note that at the same time, China domestically eschews electric vehicles (EVs), prioritizing hydrogen for transportation, while rapidly building coal and nuclear plants to generate electricity for their electric grids. America, who for years has been advancing the incorporation of non-baseload renewable energy (with materials largely sourced from China) is now is faced with the growing problem of accelerating the development of baseload energy resources to fuel the AI and data processing revolution. Between the quest for “net zero,” renewables and the AI Revolution, the United States faces the dilemma of increasing its base load capacity of available electricity, or facing potential load shedding or power rationing (brownouts and blackouts) due to a lack of generation capacity because we’ve decided to plan to eliminate coal power while China accelerates with that resource.

It is also of great concern that America could face blackouts from Chinese supply chain attacks using the very infrastructures American utilities have purchased from the communist nation to build within the wind and solar infrastructure in our grid. Even the Biden Administration’s Office of the Director of National Intelligence (ODNI) has admitted in a 2021 report:

“Deployment of utility-scale solar and wind technologies in remote areas is likely to require ultra-high-voltage transmission lines to move the power to cities. China is the world’s leading supplier of advanced grid components for ultra-high-voltage systems, such as transformers, circuit breakers, and inverters, which we assess creates cyber vulnerability risks.”

That same year, an independent grid security researcher had documented that the U.S. had already imported 171,288,538 inverters from Communist China. Why should we worry about the fact that the solar and wind generation sites within our electric grid depend on millions of Chinese inverters?  Not only because our allies, such as Australia, have voiced security concerns about these inverters, but also because the Chinese have already “baked in” hardware backdoors to target other vitally important electric grid components.

In the summer of 2019, the Trump Administration’s Department of Energy seized a massive Chinese-manufactured transformer as it entered the Port of Houston and transported it under federal escort to Sandia National Laboratories.  The transformer was inspected, and while the detailed findings are highly classified, “They found hardware that was put into it that had the ability for somebody in China to switch it off,” said Latham Saddler, the former Director of Intelligence Programs at the National Security Council in the Trump administration.

This frightening discovery prompted President Trump to declare a “Grid Security Emergency” on May 1st, 2020, and to pass an executive order “Securing the United States Bulk-Power System” meant to stop the importation of these transformers. At the time, the U.S. grid contained about 300 Chinese transformers. On President Biden’s first day in office, he suspended the Trump E.O., opening the floodgates to the importation of more.

Grid security advocates have filed numerous formal complaints on this matter with the federal regulators of the bulk power system, namely the Federal Energy Regulatory Commission (FERC). On February 16th of this year, FERC was warned yet again that our nation has now imported 449 Chinese built transformers.