Good morning, here's what the Oilman has for you today:

• FBI Sounds Alarm on Hackable Renewables

• Shale Costs Set To Drop 10% This Year

• Tweet of the Day

FBI Sounds Alarm on Hackable Renewables

The fast buildout of wind and solar has created a lot of problems.

One of them is cybersecurity.

It’s serious enough that now the FBI is warning about it.

Anything that can be hacked will be hacked

Wind and solar are often called distributed sources of energy.

That’s in contrast to centralized ones, aka power plants.

Distributed could be convenient for a rooftop solar system.

But it’s dangerous for several utility-scale installations.

Because they can be hacked.

And so can wind farms.

The distributed nature of those comes with a lot of weak points…

Precisely because they’re distributed—spatially.

In a power plant, everything’s in one place.

It’s easier to monitor and protect.

In wind and solar, everything’s spread across massive distances.

And, get this, there are no cybersecurity protocols and regulations for wind and solar.

It’s like they want to be hacked.

Sure enough, the FBI cites a case from back in 2019.

Then, a wind and solar operator “lost visibility” to 500 MW of capacity.

It was spread across California, Utah, and Wyoming.

So much for the charms of distributed power.

The more renewables, the bigger the risk

Wind and solar rely overwhelmingly on smart meters, smart inverters, and other smart stuff.

For a hacker, however, these are all potential entry points.

That’s why distributed energy is so dangerous.

There are too many such entry points.

And hackers will inevitably exploit them sooner or later.

The more of them get added to the grid, the greater the temptation would be.

Maybe operators would do better to start thinking of security protocols.

Just in case.

Shale Costs Set To Drop 10% This Year

Shale oil and gas costs will decline by 10% this year.

The forecast comes from Wood Mac.

The firm cited efficiency gains and lower OFS prices as reasons.

One industry’s misery is another industry’s boon

We already discussed cheap oilfield services as companies struggle with intense competition.

That was brought about by the M&A surge among producers.

It has prompted OFS firms to offer huge discounts to stay in business.

So that’s one reason shale costs will drop this year.

The other? More efficiency gains.

Efficiency is the middle name of shale.

Faster drilling times, simul-frac, and electric pumping units all fall under efficiency.

And, per Wood Mac, will contribute to the 10% cost decline.

But here’s the twist: OFS can’t lower prices forever.

Once they hit bottom, prices will start rising.

So next year, costs will only fall by a measly 1%, Wood Mac says.

Ever leaner and meaner shale

Costs obviously can’t keep falling forever.

But they don’t need to.

A 10% drop in a single year is pretty impressive.

As the industry runs out of space for further cost cuts, it will settle again.

For a while until it finds a new way to be more efficient—and economical.

That’s what happened before.

And it will happen again.

That’s the shale way.

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