The global energy crisis took a more sinister turn this week as explosions rocked two undersea pipelines built to deliver natural gas to Germany. Escaping methane, packing 25 times the greenhouse effect of CO2, is roiling the surface of the Baltic Sea above where the pipes are ruptured. Estimates are that the equivalent of 1% of Germany’s annual greenhouse gas emissions will be released.
Swedish investigators reported that, after their preliminary investigation, sabotage was suspected. Whatever the cause ultimately turns out to be, the incident has heightened awareness of the vulnerability of the undersea networks of pipes that crisscross the North Atlantic, Baltic Sea, Mediterranean, Sea of Japan, the South China Sea, and beyond.
These networks move energy, information, and financial transactions across the most densely economically connected areas of the world. Natural gas pipelines were featured in this week’s events; however, defence analysts warn that electricity grid interconnectors, fiberoptic internet backbone, floating LNG terminals, and other assets, face threats that should now be reassessed. Offshore wind and emerging hydrogen value chains may be less obvious but will not be immune as they become ever-more critical to our energy supply.
As with cyber threats after a highly publicised ransomware attack, what was previously thought of as a “tail risk” suddenly looks like a business vulnerability that boards and regulators will be bound to scrutinise. They will ask what management teams are doing to mitigate those threats, and what response plans they have in place to manage and communicate through a potential crisis. Media queries will not be far behind.
As The Times of London put it, “critical infrastructure [is] the frontier in this new era of warfare”. Energy, telecommunications, and other critical infrastructure firms find themselves in a position they have not been in since the end of the Cold War.
And as this new era of hybrid warfare involves vulnerabilities in the information environment as much as in physical assets, corporate communicators in critical infrastructure firms should recognise that their role will be central, not peripheral, to planning and responding to potential threats.
Adding to the complexity, most complicated cross-border infrastructure projects have multiple companies and governments as stakeholders. Communicators must navigate not only their own corporate structures but a variety of coalitions depending upon the project. Too often, uncertainty over lines of responsibility can lead to delayed or failed responses.
The temptation will often be to say, “these are security issues beyond our control.”. But not so long ago that was a common refrain of responses to data breaches and ransomware attacks. As risks became more widely understood, consumers, regulators and financial markets became less forgiving. Failure to prepare and respond adequately and transparently now often carries reputational, financial, and legal consequences.
Now is the time for management teams to think strategically about these new risks and the implications to their communications:
- Prepare for tail risk: Review scenario planning. Does it adequately cover these kinds of threats?
- Visibility: Is the communications function fully aware of the potential operational sources of risk?
- Coordination: Is the list of stakeholders with a potential communications role in a crisis scenario fully thought through? Do they all know what their roles would be in a crisis?
- Simulation exercises: The time to try and adapt a crisis plan is not at 4am on a Sunday when it breaks. Engaging with emerging risk scenarios is vital for both the communications team and the broader crisis management team.
- Resilience: Stress test your crisis communications operations to include sudden interruptions of regular channels of how the team functions. Simulations that don’t include unexpected obstacles to carrying out the plan may not be adequate.