The Fifth Risk

by The Fifth Risk (epub)

  In his four years on the job MacWilliams had come to understand the DOE’s biggest risks, the way a corporate risk officer might understand the risks inside a company, and had catalogued them for the next administration. “My team prepared its own books. They were never given to anybody. I never had a chance to sit with the Trump people and tell them what we’re doing, even for a day. And I’d have done it for weeks. I think this was a sad thing. There are things you want to know that would keep you up at night. And I never talked to anyone about them.”

  It’s been five months since he left government service, and I’m the first person to ask him what he knows. Still, I think it is important, as I pull my chair in to his kitchen table, to conduct the briefing in the spirit the Trump people might have approached it—just to see how he could have helped even those who thought they didn’t need his help. I assume the tone and manner befitting a self-important, mistrustful person newly arrived from some right-wing think tank. And so I wave my hand over his thick briefing books and say, “Just give me the top five risks I need to worry about right away. Start at the top.”

  And right away we have a problem. An accident with nuclear weapons is at the top of his list, and it is difficult to discuss that topic with someone who doesn’t have security clearance. But the Trump people didn’t have it either, I point out, so he’ll just need to work around my handicap. “I have to be careful here,” he says. He wants to make a big point: the DOE has the job of ensuring that nuclear weapons are not lost or stolen, or at the slightest risk of exploding when they should not. “It’s a thing Rick Perry should worry about every day,” he says.

  “Are you telling me that there have been scares?”

  He thinks a moment. “They’ve never had a weapon that has been lost,” he says carefully. “Weapons have fallen off planes.” He pauses again. “I would encourage you to spend an hour reading about Broken Arrows.”

  “Broken Arrow” is a military term of art for a nuclear accident that doesn’t lead to a nuclear war. MacWilliams has had to learn all about these. Now he tells me about an incident that occurred back in 1961, and was largely declassified in 2013, just as he began his stint at DOE. A pair of 4-megaton hydrogen bombs, each more than 250 times more powerful than the bomb that destroyed Hiroshima, broke off a damaged B-52 over North Carolina. One of the bombs disintegrated upon impact, but the other floated down beneath its parachute and armed itself. It was later found in a field outside Goldsboro, North Carolina, with three of its four safety mechanisms tripped or rendered ineffective by the plane’s breakup. Had the fourth switch flipped, a vast section of eastern North Carolina would have been destroyed, and nuclear fallout might have descended on Washington, DC, and New York City.

  “The reason it’s worth thinking about this,” says MacWilliams, “is the reason that bomb didn’t go off was because of all the safety devices on the bombs, designed by what is now DOE.”

  The Department of Energy, he continues, spends a lot of time and money trying to make bombs less likely to explode when they are not meant to explode. A lot of the work happens in a drab building with thick concrete walls at the Lawrence Livermore laboratory, in Northern California—one of the three nuclear-weapons research sites funded and supervised by the DOE. There a nice mild-mannered man will hand you a softball-size chunk of what seems to be a building material and ask you to guess what it is. About $10 worth of ersatz marble from Home Depot, you might guess. Whereupon he explains that what appears to be Home Depot marble becomes, under certain conditions, an explosive powerful enough to trigger a chain reaction in a pile of plutonium. The secret that the mild-mannered man would get thrown in jail for sharing is exactly what those conditions are.

  That was another thing that surprised MacWilliams when he went to work at the DOE: the sheer amount of classified information. You couldn’t really function without being cleared to hear it. There were places in the building where you could share national secrets, and places where you could not. The people from the FBI who had vetted him for his security clearance had made it very clear to him that they would excuse many foibles—affairs, petty crimes, drug use—but they could not excuse even the most trivial deception. They asked a battery of questions on the order of “Have you ever known anyone who has advocated the violent overthrow of the United States government?” They’d asked him to list every contact with foreigners he had had in the past seven years, which was absurd, as he had spent a career in global finance and lived in both London and Paris. But the people who handed out security clearances failed to see the humor in it. They wanted to know everything. There was no way anyone who obtained a security clearance would find it not worth mentioning that, say, he’d recently dined with the Russian ambassador.*

  Sitting at his kitchen table with me, MacWilliams picks up his cell phone. “We’re a major target of espionage,” he says. “You just have to assume that you are being monitored all the time.” I look around. We’re surrounded by a lot of green Long Island tranquillity.

  “By who?” I ask, with what I hope is a trace of scorn.

  “The Russians. The Chinese.”

  “How?”

  “Every phone I have. Every computer.”

  Outside, on his back lawn, overlooking a lovely estuary, MacWilliams had placed silhouettes of wild beasts to deter Canada geese from landing. I laugh.

  “You seriously think someone might be listening to us right now?”

  “I may have dropped off their radar,” he says. “But you are definitely monitored while you are there.”

  I check my watch. I have important op-eds to write, and perhaps a few meetings with people who might know people who might know the Koch brothers. If I’m a Trump person I’m going to assume the people in charge of the nuclear weapons are sufficiently alive to the risks around them that they don’t need Rick Perry’s help. After all, the only thing Trump had to say publicly about Rick Perry during the campaign was that he “should be forced to take an IQ test” and that “he put glasses on so people think he’s smart.”

  “What’s the second risk on your list?” I ask.

  “North Korea would be up there,” says MacWilliams.

  Why do I, as an incoming official at the DOE, need to be worried about North Korea?

  MacWilliams explains, patiently, that there lately have been signs that the risk of some kind of attack by North Korea is increasing. The missiles the North Koreans have been firing into the sea are not the absurd acts of a lunatic mind but experiments. Obviously, the DOE is not the only agency inside the U.S. government trying to make sense of these experiments, but the people inside the national labs are the world’s most qualified to determine just what North Korea’s missiles can do. “For a variety of reasons, the risk curve has changed,” says MacWilliams guardedly. “The risk of mistakes being made and lots of people being killed is increasing dramatically. It wouldn’t necessarily be a nuclear weapon they might deliver. It could be sarin gas.”

  As he doesn’t want to go into further detail and maybe divulge information I am not cleared to hear, I press him to move on. “Okay, give me the third risk on your list.”

  “This is in no particular order,” he says with remarkable patience. “But Iran is somewhere in the top five.” He’d watched Secretary Moniz help negotiate the deal that removed from Iran the capacity to acquire a nuclear weapon. There were only three paths to a nuclear weapon. The Iranians might produce enriched uranium—but that required using centrifuges. They might produce plutonium—but that required a reactor that the deal had dismantled and removed. Or they might simply go out and buy a weapon on the open market. The national labs played a big role in policing all three paths. “These labs are incredible national resources, and they are directly responsible for keeping us safe,” said MacWilliams. “It’s because of them that we can say with absolute certainty that Iran cannot surprise us with a nuclear weapon.” After the deal was done, U.S. Army officers had approached DOE officials to thank them for saving American liv
es. The deal, they felt sure, had greatly lessened the chance of yet another war in the Middle East that the United States would inevitably be dragged into.

  At any rate, the serious risk in Iran wasn’t that the Iranians would secretly acquire a weapon. It was that the president of the United States would not understand his nuclear scientists’ reasoning about the unlikelihood of the Iranians’ obtaining a weapon, and that he would have the United States back away foolishly from the deal.† Released from the complicated set of restrictions on its nuclear-power program, Iran would then build its bomb. It wasn’t enough to have the world’s finest forensic nuclear physicists. Our political leaders needed to be predisposed to listen to them and equipped to understand what they said.

  Yeah, well, never mind science —we’ll deal with Iran, I could hear some Trump person thinking to himself.

  By early summer of 2017 I had spoken with twenty or so of the people who had run the department, along with a handful of career people. All of them understood their agency as a powerful tool for dealing with the most alarming risks facing humanity. All thought the tool was being badly mishandled and at risk of being busted. They’d grown used to the outside world not particularly knowing, or caring, what they did—unless they screwed up. At which point they became the face of government waste or stupidity. “No one notices when something goes right,” as Max Stier put it to me. “There is no bright-spot analysis.” How can an organization survive that stresses and responds only to the worst stuff that happens inside it? How does it encourage more of the best stuff, if it doesn’t reward it?

  The $70 billion loan program that John MacWilliams had been hired to evaluate was a case in point. It had been authorized by Congress in 2005 to lend money, at very low interest rates, to businesses, so that they might develop game-changing energy technologies. The idea that the private sector underinvests in energy innovation is part of the origin story of the DOE. “The basic problem is that there is no constituency for an energy program,” James Schlesinger, the first secretary of energy, said as he left the job. “There are many constituencies opposed.” Existing energy businesses—oil companies, utilities—are obviously hostile to government-sponsored competition. At the same time, they are essentially commodity businesses, without a lot of fat in them. The stock market does not reward even big oil companies for research and development that will take decades to pay off. And the sort of research that might lead to huge changes in energy production often doesn’t pay off for decades. Plus it requires a lot of expensive science: discovering a new kind of battery or a new way of capturing solar energy is not like creating a new app. Fracking—to take one example—was not the brainchild of private-sector research but the fruit of research paid for twenty years ago by the DOE. Yet fracking has collapsed the price of oil and gas and led to American energy independence. Solar and wind technologies are another example. The Obama administration set a goal in 2009 of getting the cost of utility-scale solar energy down by 2020 from 27 cents a kilowatt-hour to 6 cents. It’s now at 7 cents, and competitive with natural gas because of loans made by the DOE. “The private sector only steps in once DOE shows it can work,” said Franklin Orr, a Stanford professor of engineering who took a two-year leave of absence to oversee the DOE’s science programs.

  John MacWilliams had enjoyed success in the free market that the employees of the Heritage Foundation might only fantasize about, but he had a far less Panglossian view of its inner workings. “Government has always played a major role in innovation,” he said. “All the way back to the founding of the country. Early-stage innovation in most industries would not have been possible without government support in a variety of ways, and it’s especially true in energy. So the notion that we are just going to privatize early-stage innovation is ridiculous. Other countries are outspending us in R&D, and we are going to pay a price.”

  Politically, the loan program had been nothing but downside. No one had paid any attention to its successes, and its one failure—Solyndra—had allowed the right-wing friends of Big Oil to bang on relentlessly about government waste and fraud and stupidity. A single bad loan had turned a valuable program into a political liability. As he dug into the portfolio, MacWilliams feared it might contain other Solyndras. It didn’t, but what he did find still disturbed him. The DOE had built a loan portfolio that, as MacWilliams put it, “JPMorgan would have been happy to own.” The whole point was to take big risks the market would not take, and they were making money! “We weren’t taking nearly enough risk,” said MacWilliams. The fear of losses that might in turn be twisted into antigovernment propaganda was threatening the mission.

  In late June 2017 I went for a long drive in hopes of getting a clearer picture of risks four and five, which MacWilliams had gone on to describe for me at greater length—urgent threats to American life that might just then have been keeping the leadership of Trump’s DOE awake at night, if there had been any leadership. I started out in Portland, Oregon, heading east, along the Columbia River.

  An hour or so into the drive, the forests vanish and are replaced by desolate scrubland. It’s a startling sight: a great river flowing through a desert. Every so often I pass a dam so massive it’s as if full-scale replicas of the Department of Energy’s building in Washington, DC, had been dropped into the river. The Columbia is postcard lovely, but it is also an illustration of MacWilliams’s fourth risk: the electrical grid. The river and its tributaries generate more than 40 percent of the hydroelectric power for the United States; were the dams to fail, the effects would be catastrophic.

  The safety of the electrical grid sat at or near the top of the list of concerns of everyone I spoke with inside the DOE. Life in America has become, increasingly, reliant on it. “Food and water has become food and water and electricity,” as one DOE career staffer put it. Back in 2013 there had been an incident in California that got everyone’s attention. Late one night, just southeast of San Jose, at Pacific Gas and Electric’s Metcalf substation, a well-informed sniper, using a .30-caliber rifle, had taken out seventeen transformers. Someone had also cut the cables that enabled communication to and from the substation. “They knew exactly what lines to cut,” said Tarak Shah, who studied the incident for the DOE. “They knew exactly where to shoot. They knew exactly which manhole covers were relevant—where the communication lines were. These were feeder stations to Apple and Google.” There had been enough backup power in the area that no one noticed the outage, and the incident came and went quickly from the news. But, Shah said, “for us it was a wake-up call.” In 2016 the DOE counted half a million cyber-intrusions into various parts of the U.S. electrical grid. “It’s one thing to put your head in the sand for climate change—it’s like mañana,” says Ali Zaidi, who served in the White House as Obama’s senior adviser on energy policy. “This is here and now. We actually don’t have a transformer reserve. They’re like these million-dollar things. Seventeen transformers getting shot up in California is not like,” Oh, we’ll just fix the problem.’ Our electric-grid assets are growing vulnerable.”

  In his briefings on the electrical grid, MacWilliams made a specific point and a more general one. The specific point was that we don’t actually have a national grid. Our electricity is supplied by a patchwork of not terribly innovative or imaginatively managed regional utilities. The federal government offers the only hope of a coordinated, intelligent response to threats to the system: there is no private-sector mechanism. To that end the DOE had begun to gather the executives of the utility companies, to educate them about the threats they face. “They all sort of said,” But is this really real?’” said MacWilliams. “You get them security clearance for a day and tell them about the attacks and all of a sudden you see their eyes go really wide.”

  His more general point was that managing risks was an act of the imagination. And the human imagination is a poor tool for judging risk. People are really good at responding to the crisis that just happened, as they naturally imagine that whatever just happe
ned is most likely to happen again. They are less good at imagining a crisis before it happens—and taking action to prevent it. For just this reason the DOE under Secretary Moniz had set out to imagine disasters that had never happened before. One scenario was a massive attack on the grid on the Eastern Seaboard that forced millions of Americans to be relocated to the Midwest. Another was a Category 3 hurricane hitting Galveston, Texas; a third was a major earthquake in the Pacific Northwest that, among other things, shut off the power. Yet, even then, the disasters they imagined were the sort of disasters that a Hollywood screenwriter might imagine: vivid, dramatic events. MacWilliams thought that, while such things did happen, they were not the sole or even the usual source of catastrophe. What was most easily imagined was not what was most probable. It wasn’t the things you think of when you try to think of bad things happening that got you killed, he said. “It is the less detectable, systemic risks.” Another way of putting this is: the risk we should most fear is not the risk we easily imagine. It is the risk that we don’t. Which brought us to the fifth risk.

  When you set out to list the major risks inside a place with a mission as nerve-racking as the DOE’s, your mind naturally seeks to order them. One crude way that MacWilliams ordered the 150 or so risks on his final list was to plot them on a simple graph, with two axes. On one axis was “probability of an accident.” On the other axis was “consequences of an accident.” He placed risks into one of the graph’s four quadrants. A nuclear bomb exploding in an assembly plant and blowing up the Texas Panhandle: high consequence, low probability. A person hopping a perimeter security fence at one of the DOE facilities: low consequence, high probability. And so on. Mainly, he wanted to make sure the department was paying sufficient attention to the risks that fell into the graph’s most unpleasant quadrant—high probability of an accident/big consequences if it happens. He noticed that many of the risks that fell into this quadrant were giant multi-billion-dollar projects managed by the DOE. MacWilliams coined his own acronym: BAFU. Billions and All Fucked Up.