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Anomaly and cyber fraud detection in pipelines and supply chains for liquid fuels

Abstract

A recent large-scale information disruption of the Colonial Pipeline across the USA has highlighted the cyber vulnerabilities of the supply chains of liquid fuels. Information disruption and associated anomalies have become routine events for critical infrastructure of sociotechnical systems. The logistics systems that support energy commodity supply chains are vulnerable to information threats that evolve throughout the system life cycles. Among the prevalent threats energy supply chains are malicious hacking, fraud, information theft, ransomware, and related irregular activities. Fraud and malicious activity are not new in the supply chains for liquid fuels, though mechanisms and consequences may be changing. This paper addresses information anomalies that are on a spectrum of errors, lost data, fraud, cyber, ransomware and related disruptions to logistics systems that support e-commerce and distribution of liquid fuels, particularly for challenges associated with human and organizational errors whose frequencies may be increasing in the latest pandemic. The lessons learned can help to improve the anomalies monitoring systems thus protecting the interests of consumers, industry, and the government. A case featuring fuels distribution, cyber-physical-systems and the internet of things (IoT) is presented to illustrate several issues that are challenging the design and operation of government-mandated inspection and detection processes for fraud and anomalies. In particular, an Authenticator and Transmitter System (SAT) concept is described for remote monitoring of fuel distribution points via a secure communication channel between the fuel pumps and government regulators. The data collected in this approach are used to analyze the behavior of fuel distribution points and detect anomalous behaviors that could indicate fraud and/or fraud-like precursors to other information disruptions. The method technologies that are described in this paper helps to detect precursors of fraud and other information irregularities in their earliest stages, and to enhance policies that protect the information systems of fuel pipelines and their related logistics systems. Methods such as described herein are integrated among layers of complex information technologies to protect the interests of the energy sector, consumers, and government.

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Acknowledgments

This effort was supported in part by the US National Science Foundation I/UCRC Center for Hardware and Embedded Systems Security and Trust (NSF Award 1916760); the Commonwealth Center for Advanced Logistics Systems; Systems Planning & Analysis, Inc.; Fermata LLC; and the US Army Corps of Engineers.

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Correspondence to DeAndre A. Johnson.

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The authors declare that they have no conflict of interest.

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Beteto, A., Melo, V., Lin, J. et al. Anomaly and cyber fraud detection in pipelines and supply chains for liquid fuels. Environ Syst Decis 42, 306–324 (2022). https://doi.org/10.1007/s10669-022-09843-5

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  • DOI: https://doi.org/10.1007/s10669-022-09843-5

Keywords

  • Systems engineering
  • Data analysis
  • Trust
  • Logistics
  • Energy sector
  • Ransomware