Russia's Targeting Our Satellites, Hackers Are After Our Drinking Water

The "New Cold War" storyline to keep following ...

The Pentagon this week said Russia has launched a “counter-space weapon” — a satellite that can be used to “blind” U.S. forces by obliterating its orbiting U.S. counterparts.

And during the same week, the U.S. Environmental Protection Agency (EPA) ordered U.S. water utilities to take immediate moves to protect America’s drinking water from cyberattacks.

Welcome to the “New Cold War,” one of the major storylines where worldwide military spending is marching higher and where global adversaries are creating new battlefields in cyberspace and outer space. Thanks to advances in technology and extensions into new “theaters of operation,” global warfare is entering uncharted territory.

That creates uncertainty. Uncertainty creates indecisiveness – even fear.

But uncertainty also creates opportunity.

Today I’m going to detail both stories I mentioned above I’m going to detail both these new installments to our New Cold War storyline.

And then – based on our mantra that “the best storylines lead to the best stocks” – I’ll show you one of the companies that figures to be a major beneficiary.

So let’s talk about these two stories …

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Russia Space Nuke

In February, the White House warned that Moscow was developing a “troubling” new anti-satellite weapon – though underscoring Russia hadn’t actually deployed it. The weapon was essentially what I’ve referred to as a “satellite killer.” That’s a space vehicle that’s launched into orbit — usually an orbit that shadows its targets — and that has some type of satellite-killing capability (like a laser or a kinetic-kill capability). And Russia’s model is reportedly armed with a nuclear weapon.

In response to those February White House comments, Moscow accused the United States of making space-weapon claims as a trigger to get Congress to authorize a new round of military aid for The Ukraine — and doing so “by hook or by crook.”

And the Russia/Ukraine War is truly is part of the equation here. Moscow is ticked off that the U.S. is providing military assistance to Ukrainian forces – especially in the form of targeting data. And where does a lot of that data come from?

You guessed it – America’s network of spy satellites.

In the weeks that followed, the spat spilled over into the United Nations (UN) – with each country accusing the other of seeking to “militarize space.”

But it was all talk – until this past week, when the Pentagon revealed that Russia actually launched its “satellite killer” weapon – and did so in the “same orbit” as a U.S. government satellite, U.S. Air Force Brig. Gen. Patrick Ryder, a Pentagon spokesman, said early this week.

This Russian satellite – known as Cosmos 2576 – was launched May 16 aboard a Russia launched a Soyuz-2.1brocket from Northern Russia’s Plesetsk Cosmodrome. Though Moscow refused comment on the satellite’s purpose, U.S. sources say it’s now in a lower orbit similar to USA 314, a bus-sized spy satellite launched in 2021 by the National Reconnaissance Office (NRO).

And this likely wasn’t the first space weapon launched, since Gen. Ryder says U.S. intelligence assessments “further indicate characteristics resembling previously deployed counter space payloads from 2019 to 2022.”

Russia launched Cosmos 2558 into a similar low-earth orbit (LEO) in 2022 – then boosted it to put it closer to USA 326, another NRO spacecraft that some speculate is the next-generation electro-optical reconnaissance satellite.

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Fighting the Next War

Experts have increasingly warned that space is the next theater of warfare — something that has massive (and scary) implications for a world that’s wholly reliant on technology to make things go.

But if you look close enough, you can see a “preview of coming attractions” we’re already getting a “sneak preview” of what a space war could lead to.

Russia is already disrupting satellite-navigation technology, and civilian airline flights, in the Baltic, the Black Sea and Eastern Mediterranean – traditional strongholds of the Russian military. Specifically, Russia is sporadically “jamming” Global Positioning System (GPS) technology there, meaning airplanes can get satellite-based navigation signals.  

In March, a Royal Air Force plane carrying British Defense Secretary Grant Shapps and a cast of reporters had its navigation system jammed while flying close to Russian Baltic enclave Kaliningrad. Shapps was returning from Poland, where he was conferring with Polish leaders about Ukraine aid.

Cellphones were also disabled by the jamming technology.

The European Union Aviation Safety Agency (EASA) said this problem predates the February 2022 Russian invasion of The Ukraine, but is now getting much worse – and now tallies “several thousand incidents” per year.

Juho Sinkkonen, vice president for flight operations for the Finnish-flag carrier Finnair, told the BBC that his company’s aircraft encounter this issue every day – a total of 100 times a month. He said it’s more a nuisance than a danger – but what if GPS was knocked out for an extended stretch?

Or the technology aiding cell phones?

Or weather forecasting?

Or the Internet?

Or … intelligence gathering?

“The development of an anti-satellite (ASAT) weapon with a nuclear component by Russia … raises several national-security concerns for the United States and its allies,” says William Akoto, assistant professor of foreign policy and global security at American University’s School of International Service. “For one, the U.S. and many of its allies heavily rely on satellites for critical functions including military and civilian communications, navigation (GPS) and weather monitoring. The U.S. also relies on satellites for intelligence gathering and as part of the early warning system for missile launches. The Russian ASAT could potentially disable or destroy these space-based assets, effectively shutting down the military and civilian systems that depend on those [satellite] assets.”

And it’s not just Russia.

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A Bullseye on SpaceX?

A 2022 Defense Intelligence Agency (DIA) report found that Russia and China boosted their space fleets by 70% between 2019 and 2021, and more than 200% between 2015 and 2018.

And military satellites operated by the U.S. and its allies aren’t the only potential target. Elon Musk’s SpaceX has started talks about selling existing shares at a price that could value the closely held company at roughly $200 billion, media reports said this week.

But Russian leader Vladimir Putin has warned America that America’s use of SpaceX technology (the company reportedly has a classified contract to develop a network of hundreds of U.S. intelligence satellites) will make Musk’s spacecraft a legitimate target.

Blowing up satellites could have cataclysmic consequences – in part because of the creation of space shrapnel that could create even more shrapnel taking out more satellites in a domino-like wave of destruction known as the “Kessler Effect.”

Of course, space warfare doesn’t have to come from these types of “space-to-space” weapons: Hackers can attack satellites from the ground, says Prof. Akoto, the American University security specialist.

“Satellites have the potential to revolutionize many aspects of everyday life – from bringing Internet access to remote corners of the globe to monitoring the environment and improving global navigation,” Akoto says. “Amid all the fanfare, a critical danger has flown under the radar: the lack of cybersecurity standards and regulations for commercial satellites, in the U.S. and internationally … if hackers were to take control of these satellites, the consequences could be dire. On the mundane end of scale, hackers could simply shut satellites down, denying access to their services. Hackers could also jam or spoof the signals from satellites, creating havoc for critical infrastructure. This includes electric grids, water networks and transportation systems.”

Hackers … water networks? Ring a bell?

And that takes us to the next chapter of today’s New Cold War report.

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Water, Water Everywhere … and We Are at the Brink

On Monday, the EPA issued an “enforcement alert” detailing “urgent cybersecurity threats and vulnerabilities” to community water systems – and urged immediate steps to protect America’s drinking water.

The enforcement action was triggered by the fact that 70% of the U.S. drinking water systems the EPA inspected since September violated standards in the U.S. Safe Drinking Water Act by displaying “alarming” cybersecurity vulnerabilities.

Some of those vulnerabilities included “default passwords that have not been updated and single logins that can easily be compromised."

Cyberattacks against U.S. water utilities are on the rise – both in number and severity. China, Iran and Russia are building capabilities to attack and disable critical American infrastructure – including drinking water and wastewater.

This is bigger than it sounds. Before, hackers just messed with the utilities’ websites. But now they’re going after their physical operations – including the software that manages water filtering processes. The fallout from such hacks could include interrupted water flows, disrupted water treatment, disabling water storage, actual damage to crucial valves and pumps, or shifting chemical ratios enough to create health hazards, the EPA explained.

Some examples:

• Early this year, a Russian-linked “hacktivist” went after the water systems in several Texas Panhandle towns; one system overflowed and another was forced to “unplug” and operate manually after turning aside 37,000 firewall attacks in just four days. The attacks were reported to the Feds.

• Last year, the Iran-linked “Cyber Av3ngers” went after the Municipal Water Authority of Aliquippa – motivated by the Israel/Hamas war to target an Israel-made piece of equipment the utility was using.

• A China-linked group known as “Volt Typhoon” is going after critical infrastructure – perhaps to plant malware that can cause major future disruptions should the U.S. and China square off. Some of the targets are in Guam, where the U.S. has a crucial military presence.

In an interview with NBC News, Dawn Cappelli, a cybersecurity expert with the industrial cybersecurity firm Dragos Inc., said that an “arm’s-length” relationship between America’s New Cold War enemies and the “bad actors” that are engineering the actual hacks is creating new challenges for Washington and for cybersecurity defenders.

“By working behind the scenes with these hacktivist groups, now these (nation states) have plausible deniability and they can let these groups carry out destructive attacks,” Cappelli said. “And that to me is a game-changer.”

This push to protect critical American infrastructure isn’t limited to water utilities. Through the U.S. Department of Energy, the White House initiated a public-private partnership aimed at protecting electric utilities from cyberattacks. In February, U.S. President Joe Biden signed an executive order whose goal was to bolster the nation’s ports, which employ about 31 million people and contribute $5.4 trillion to the U.S. economy.

Protecting America is a clearly a major subplot to the New Cold War. It’s a crucial storyline, which leads to big opportunities.

And I have that opportunity for you — I’ve dubbed it “The Cybersecurity Gunslinger Stock” — and you can check it out now.

See you next time.

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