Threat Intelligence Blog

Posted October 16, 2013

The continuing boom in the shale gas industry has created new opportunities as well as new security risks for the energy industry throughout the U.S. One of the fastest growing areas of the energy industry, shale gas extraction via hydraulic fracturing, often known as “fracking,” is an effective but often controversial method for oil and gas companies to extract precious resources in regions where they could not necessarily do so otherwise.

The Bakken formation, which lies under parts of Montana, North Dakota, Saskatchewan and Manitoba and is often referred to as Bakken shale, is one area where fracking is growing at an extraordinary rate. This growth has brought about not only skyrocketing revenue and new energy resources, but increased risks that illustrate how digital and physical security issues are converging.

One of the major problems associated with the shale gas industry, and the Bakken shale region in particular, is the large and sudden influx of workers that comes with a flourishing industry. The rise of fracking “boomtowns” has led to corresponding increases in crime and prostitution in these regions. In fact, this has become such an issue in the Bakken shale region that legislation has been introduced to help crack down on prostitution, which is often used as a blanket term for human trafficking and related crimes. These risks pose a risk to the Bakken shale region for workers, their families, local businesses and energy companies as crime spreads and the potential for damage and physical violence escalates. In addition, the trend of using contractors presents problems as they are typically not as trained in safety procedures as the hourly workers.

The close proximity of the railroad also poses a threat to organizations and employees in the Bakken shale region. This allows easy access to the shale gas equipment and facilities, which are often the target for theft, vandalism, or tampering. In the last few years, theft in particular has increased dramatically in the region, as thieves have stolen equipment worth hundreds of thousands of dollars. The rail transport of the shale gas poses a risk, too. The crash and subsequent explosion of a train carrying oil in Ontario in July 2013 shows the potential hazards of oil transport by rail, and many people have called for the energy industry to move away from rail transport in favor of pipelines as a result.

Lastly, opposition to the fracking processes used to extract the shale gas poses a very real threat to companies operating in the Bakken shale gas region. Opponents are willing to go to extreme measures in order to demonstrate their hostility towards fracking, and the nearness of the railroad gives them easy access to oil wells and facilities. Activists have taken an array of actions against fracking, from protesting and picketing to shooting at drill sites. The potential revenue loss for energy firms, as well as dangerous circumstances for employees and even innocent bystanders, is very real.

Opponents of Bakken shale fracking have also become adept at using social media and other online platforms to organize against the energy companies and developers, leveraging them to alert people to protests, for example. They may also use such platforms to organize online attacks against websites and operations through methods such DDoS attacks.

Since the Bakken shale boom does not appear to be slowing anytime in the near future, the risks associated with its operations are likely to continue, too. For investors and the energy firms operating in this area, these risks pose very real threats.

While the Bakken formation is just one region, it provides an excellent view into some of the challenges facing the energy sector today, and illustrates the need for ongoing monitoring and awareness.

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