Securing the United States Bulk-Power System

Overview

Intent and Scope

Executive Order 13920, issued by President Donald Trump on May 1, 2020, aims to secure the United States bulk-power system, a critical component of national infrastructure. The bulk-power system, which includes the network of facilities and control systems that generate and transmit electricity across the nation, is vital to national defense, emergency services, critical infrastructure, and the overall economy. This order responds to growing concerns about vulnerabilities in the system due to foreign adversaries potentially exploiting or sabotaging it, posing substantial risks to national security.

National Emergency Declaration

In the text of the executive order, President Trump declared a national emergency concerning the threat to the bulk-power system. This declaration reflects the administration's understanding that the unrestricted foreign acquisition, import, or use of bulk-power system electric equipment is an unusual and extraordinary threat emanating primarily from outside the United States. The intention is to prevent scenarios where foreign adversaries, through control or influence over this equipment, could disrupt or damage the U.S. power grid, impairing its operation and affecting national security.

Action and Prohibition

The order prohibits certain transactions involving bulk-power system electric equipment from foreign adversaries, undertaking intentional action to curb potential threats. Specifically, it restricts the acquisition and use of such equipment designed, developed, manufactured, or supplied by foreign adversaries if determined to pose unacceptable risks to national security. These prohibitions aim to protect the security, integrity, and reliability of the power infrastructure essential for both daily life and security imperatives.

Implementation Strategy

The Secretary of Energy is empowered to enforce these prohibitions and develop measures to mitigate risks identified concerning foreign-controlled equipment. The order outlines a coordinated approach, requiring consultation with the Director of National Intelligence, the Secretary of Defense, and other key officials. The proactive identification and isolation of problematic equipment are imperative steps highlighted as fundamental to enhancing national resilience against external threats.

Broader Implications

This measure reflects a broader strategy of the Trump administration to scrutinize foreign influence in critical U.S. sectors. It complements concurrent efforts to address vulnerabilities in telecommunications and other infrastructure. By reinforcing control over critical components of national infrastructure, the administration's approach advocates for a landscape where economic openness is balanced against the imperative of security resilience.

Legal and Policy Implications

Legal Authority and Emergency Powers

Executive Order 13920 derives its authority from several statutory provisions, most notably the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act (NEA). These laws grant the President significant powers to regulate commerce in response to national emergencies. By invoking these statutes, the executive branch assumes a regulatory stance over the acquisition of certain electrical equipment, using national security considerations as the basis for potential prohibitions or conditional dealings.

Impact on Procurement Policy

The order mandates the formation of a Task Force on Federal Energy Infrastructure Procurement Policies related to National Security. This body is tasked with creating uniform guidelines for energy infrastructure procurement that incorporate national security concerns across the federal government. These guidelines are intended to harmonize procurement practices with security imperatives, ensuring that government acquisitions of electric infrastructure uphold stringent security standards.

Procedural and Regulatory Developments

The EO requires the Secretary of Energy to publish implementing regulations and identify equipment posing national security threats. Such regulations are expected to specify criteria for determining foreign adversaries, scrutinizing entities in control of high-risk equipment, and delineating procedures for transactions involving critical bulk-power infrastructure.

Interagency Coordination and Oversight

The interplay of multiple federal entities in enforcing this order highlights a coordinated interagency approach, necessary for addressing complex national security challenges. The Secretary of Energy, in collaboration with the Department of Defense and Department of Homeland Security, among others, is to centralize efforts to identify risks and ensure regulatory compliance across the federal landscape, thus reinforcing the order's effectiveness.

Balancing Openness with Security

While the order restricts foreign participation, it does not completely preclude the use of foreign technology, provided adequate measures mitigate identified risks. This approach suggests a need to balance economic openness and international collaboration with uncompromised security standards, reflecting ongoing policy discussions about the optimal role of foreign entities in U.S. critical infrastructure.

Who Benefits

Domestic Manufacturers and Technology Firms

The executive order can benefit U.S.-based manufacturers and technology providers by reducing competition from foreign firms deemed adversarial. With restrictions in place, domestic companies have an opportunity to increase their participation in the bulk-power market, enjoying a more secure and potentially lucrative position as federal procurement guidelines tighten around foreign offerings.

U.S. National Security and Emergency Services

By enhancing the robustness and security of the bulk-power system, the order indirectly supports U.S. national security institutions and emergency services. The resilience of the electrical grid underpins defense operations, emergency responses, and overall public safety, offering reassurance that infrastructure integrity will not be compromised by foreign manipulation or sabotage.

Federal and State Regulatory Agencies

Agencies tasked with overseeing energy infrastructure gain clearer directives and enforcement powers under the order. These regulatory bodies benefit from a strengthened mandate to impose and uphold security-based criteria in supplier engagements, leading to increased oversight and potentially enhanced intra-agency collaboration to secure critical infrastructure.

Communities Dependent on Reliable Energy

Communities across the United States, particularly those vulnerable to power disruptions, stand to benefit from measures that fortify the grid against foreign threats. This EO adds an additional layer of assurance that power reliability and uninterrupted service are prioritized, helping to sustain local economies and basic quality of life reliant on consistent electricity access.

Research and Innovation Sectors

Research institutions and innovators focusing on grid security technology may experience heightened demand for solutions that improve infrastructure defenses. With increased federal scrutiny over foreign equipment comes a parallel rise in opportunities for research funding and collaboration on cutting-edge security technologies as the country seeks to domestically strengthen its power systems.

Who Suffers

Foreign Equipment Suppliers

Foreign entities classified as adversarial face significant business losses in the U.S. Under this order, their equipment may be prohibited or subjected to stringent scrutiny, effectively barring or limiting their access to the lucrative U.S. market for bulk-power system components and influencing their economic interests negatively.

Global Supply Chains

The order poses challenges to global supply chains, especially those that rely on integrated networks of manufacturing and development across borders. Companies that procure components internationally may face increased costs and supply disruptions due to the necessity to pivot towards domestic or approved foreign alternatives.

U.S. Importers of Foreign Technology

Companies in the U.S. that have traditionally imported foreign bulk-power equipment now encounter uncertainties and potential disruptions in sourcing technology. These importers may incur increased costs as they realign their procurement strategies towards domestic solutions or vetted international suppliers, complicating their operations.

Investment Climate and International Trade Relations

While intended for national security, the EO might strain trade relations with countries affected by these restrictions. It signals a move towards greater economic protectionism, potentially inviting reciprocal measures against U.S. interests and impacting broader international trade dynamics. This could lead to diplomatic tensions and reduced foreign investment attractiveness in certain U.S. sectors.

Innovation Collaboration with Foreign Allies

By narrowing the scope for foreign involvement, the executive order also limits collaboration opportunities with allies that may be inadvertently included within the EO's scope. Opportunities for joint innovation or technology exchange critical to infrastructure advancement might be stifled, potentially slowing technological progress relative to the global pace.

Historical Context

Aligning with Broader National Security Policies

Executive Order 13920 aligns with broader national security policies emphasized during the Trump administration, prioritizing the protection of critical infrastructure from foreign adversaries. It reflects an overarching strategy that targets the reduction of dependency on foreign technology which, when viewed as adversarial, threatens national integrity.

Emerging Concerns in Cybersecurity

This EO fits within a broader context of escalating concern over cybersecurity threats, which have become a priority for U.S. policy as cyber warfare tactics advance. It underscores the administration's emphasis on preemptively securing infrastructure against diverse threats, recognizing the vulnerabilities that modern technology and international relations can introduce.

Precedents in Executive Action

Historically, executive orders have been used to address perceived threats to national security, including those impacting economic and infrastructural domains. Similar orders in meaning have covered telecommunications, signaling broader shifts towards monitoring and regulating foreign influence in critical technology sectors to safeguard national interests.

Responses to Global Geopolitical Shifts

The issuance of this order is also indicative of the geopolitical climate at the time of publication, featuring heightened tensions with certain foreign powers perceived as exerting undue influence on U.S. infrastructure. It reflects the selective engagements practiced by the administration, strategically assessing foreign participation based on friend-and-foe perceptions.

Federal Policy Trends and Protectionism

This order is part of a broader trend seen in recent years towards national self-reliance and protectionism, responding to globalization's challenges and vulnerabilities exposed in critical sectors. It is consistent with policy directions that reassert domestic control over vital resources and infrastructure, amidst debates on the balances and bounds of international cooperation.

Potential Controversies or Challenges

Legal Disputes Over Implementation

Implementing this executive order could present legal challenges, particularly regarding how "foreign adversary" is defined and identified. Companies affected by the EO may contest designations or restrictions, arguing against the criteria and assessments used to classify equipment or entities as adversarial under the law.

Congressional Pushback

Though the President has invoked emergency powers, this use may invite congressional scrutiny over executive overreach, especially if perceived as inadequately transparent or as bypassing legislative involvement. Legislative bodies might challenge the EO's scope, seeking increased oversight or balance against executive action through statutory adjustments or investigations.

Enforcement Concerns

Practical enforcement of the EO and identification of prohibited transactional risks pose complex challenges. The comprehensive evaluation of equipment origin, control, and influence requires coordinated effort between numerous federal agencies, posing logistical and bureaucratic hurdles that could affect timely and effective order implementation.

International Trade Implications

The international community might view this EO as a precedent for economic nationalism, potentially leading to reciprocal trade barriers that could impact U.S. exports. Such dynamics raise questions about the long-term viability of unilateral security-driven trade restrictions amidst globally integrated and interdependent markets.

Balancing National and Economic Security

The EO highlights inherent tensions between safeguarding national security and preserving economic openness—and navigating this balance could produce controversies. Industries dependent on the flow of international technology may suffer negative economic impacts, raising questions about whether the order overcorrects in achieving security at the expense of economic vitality.