Terrorist Attacks on Energy Industry: Prevention and Reaction

Transcription

1 Terrorist Attacks on Energy Industry: Prevention and Reaction

2 Presentation Outline 1. Defining Terrorism Attackers Attacks on Energy Infrastructure Global Trade Movements Energy Demand Growth Dependence & Vulnerability Vulnerability as Energy Industry Prevention Methodology

3 Defining Terrorism. Hotly debated definition -Terrorism! -War! -Politics! -Conflict! A relative term? (One man s terrorist is another man s freedom fighter.) Used as a pejorative.

4 Irony Terrorism historically has been used by individuals, political groups, and Nations since the beginning of politics by other means.

5 Working Definition Terrorism is the intentional use of terror to achieve an objective.

6 Presentation Outline Defining Terrorism 2. Attackers Attacks on Energy Infrastructure Global Trade Movements Energy Demand Growth Dependence & Vulnerability Vulnerability as Energy Industry Prevention Methodology

7 Attackers Lashkar e-tayyiba (LT) Al-Qa ida in Iraq HAMAS Harakat ul-mujahadin (HUM) Hizballah Islamic Jihad Group (IJG) Al-Qa ida According to open source reports, Islamic State of Iraq (aka al-qa ida in Iraq), more than any other subnational group, claimed they conducted attacks with the highest casualty totals.

8 Osama bin laden s targeting Philosophy Inflict maximum damage to human, economic and physical infrastructures Attack symbolic, high prestige, economic, and strategic targets

9 Al-Qaeda Activity Since 1993 October 3, 1993 Killing of 18 US soldiers in Somalia links to Al-Qaeda funding and training. June 25, 1996 Truck bomb at Khobar Towers barracks in Dhahran, Saudi Arabia, 19 US servicemen and women killed. August 7, 1998 Bombing of US embassies in Nairobi, Kenya and Dar es Salaam, Tanzania, killing 224 people.

10 Al-Qaeda Activity (continued) August 19, 2003 Truck bomb levels UN Headquarters in Baghdad, killing 22, including the UN Special Envoy, Sergio Vieira de Mello. November 8, 2003 Explosions in a residential compound in Riyadh kill 17 people, mainly Arab workers. November 15, 2003 Bombers attack the HSBC HQ in Istanbul, Turkey kill 32. March 11, 2004 Ten bombs explode during rush hour in train stations in Madrid, Spain, killing 191 influenced Spanish elections? June 12-18, 2004 American civilian Paul Johnson a 49-year-old Lockheed Martin Corp. employee, kidnapped and beheaded in Riyadh, Saudi Arabia.

11 Presentation Outline Defining Terrorism Attackers Attacks on Energy Infrastructure Global Trade Movements Energy Demand Growth Dependence & Vulnerability Vulnerability as Energy Industry Prevention Methodology

12 Potential Threats Cyber attacks Insider sabotage Bombing Penetration of facility Attacks on personnel and office structures Hostages Aircraft as Airborne weapons WMD ChemBioNuclearRadiation

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14 The Greenpeace ship Rainbow Warrio bombed in Auckland Harbour in July 1985

15 USS Cole attacked by water-borne terrorists in Aden, Yemen in October 2000

16 The French tanker Limburg damaged in Yemen in an October 2002 attack Al-Qaeda issued a statement that it "was not an incidental strike at a passing tanker but...on the international oil-carrying line in the full sense of the word."

17 Energy & Geopolitics connection

18 Oil and Geopolitical Conflict: Early 20th Century Oil was at the centre of military strategy throughout the 20 th century, beginning with two World Wars: Conversion of British fleet to oil prior to WW l: security of supply concerns lead to Government financial support for opening of Persian (Iranian) oil fields - leads to British Petroleum. WWI introduces mechanized, mobile warfare (tanks, trucks and planes). WW-II: Germany invents Blitzkrieg warfare; lifeblood is fuel. Germans invade Russia to secure oilfields in the Caucuses. Coal liquefaction invented by Germans (47% of transport fuel supply at peak); US oil embargo of Japan in early Japanese pre-emptive strike at Pearl Harbour in December, as Japan tries to secure Indonesian oil fields.

19 North American Oil Dependence & Vulnerability In 1945, North America was a net energy exporter and self-sufficient in oil, natural gas and coal. The US was the world s largest oil producer (50% of world production even as late as 1950). US supplied most of the oil needed by the Allies in WWII. Pursued a regulated domestic pricing policy. To-day, US oil production in lower 48 states peaked in N.A. imports 39.8% of oil requirements (9.6mbd) - produced 14.5 million barrels of oil per day (US: 7.6; Mexico 3.8 and Canada 3.1mbd) and consumed 24.1 million barrels per day (US 20.7; Mexico 1.4 and Canada 2.0). A global oil market exists where global pricing, allocation prevails.

20 Geopolitical Importance of Persian Gulf & Saudi Arabia In 1943, President Roosevelt declared defense of Saudi Arabia vital to US national security. Military aid and political commitment has grown as US oil imports and Saudi production has grown. Today, Saudi Arabia is THE key world producer 23% of world s conventional reserves of oil; 80 to 85% of the spare capacity in the world; Half of Saudi output comes from one oil field and 66% of Saudi production goes through one plant and two terminals; Increasingly unstable regime.

21 Middle East and Energy Security: Post WWII In 1979, President Carter declares access to oil a vital national interest, to be defended by any means necessary. Carter doctrine is still a central pillar in US foreign policy; Carter establishes rapid deployment military force to secure US and Allied interests - made permanent in 1983 by President Reagan. Central Command one of five unified commands covering the globe and has suffered far more military casualties than any other US command.

22 Middle East and Energy Security: Post WWII Series of inter-related wars involving oil and related terrorist and regional security concerns: Iran-Iraq war ( ); Iraq invasion of Kuwait (1990) and the 1991 Gulf War; US forces in Saudi Arabia leads to 9/11 attacks on US in 2001; US led invasion of Afghanistan (2002). US led invasion of Iraq (2003). Now a quagmire in which the US and its Allies cannot win and cannot leave without the grave potential for a region destabilizing civil war. (Sunni/Shia and the Kurds)

23 1999: Year of Change

24 Presentation Outline Defining Terrorism Attackers Attacks on Energy Infrastructure 4. Global Trade Movements Energy Demand Growth Dependence & Vulnerability Vulnerability as Energy Industry Prevention Methodology

25 LNG is globally traded: the New Oil???

26 Energy security natural gas Global LNG flows

27 Middle East Oil Exports Thru Dire Straits IEA World Energy Outlook 2005

28 Presentation Outline Defining Terrorism Attackers Attacks on Energy Infrastructure Global Trade Movements 5. Energy Demand Growth Dependence & Vulnerability Vulnerability as Energy Industry Prevention Methodology

29 The Asia-Pacific Growth The Largest Economies in ,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Figure 2: The Largest Economies in 2050 (Source: Goldman Sachs BRICs Model Projections) Ch US In Jpn Br Russ UK Ger Fr It GDP (2003 US $bn) 2

30 Rising Energy Demand Table 1: World Energy Consumption by Region, (Sources: 1990 and 2000: Energy Information Administration (EIA), International Energy Annual 2001 (Washington D.C., February 2003); 2010 and 2020: EIA, System for the Analysis of Global Energy Markets (2003)) Energy Consumption (Quadrillion BTU) Region / Country Industrialised Countries North America Western Europe Industrialised Asia Eastern Europe / Former Soviet Union Developing Countries Developing Asia Middle East Africa Central and South America Total

31 Energy dependence and vulnerability European and US dependence on oil imports likely to grow to more than 70% and 60% by 2010 and 2020 respectively China & India likely to account for about 35 % of the world s incremental energy demand by 2025 The security of African and Middle Eastern reserves will become increasingly important, and therefore more vulnerable to the acts of terrorism.

32 Presentation Outline Defining Terrorism Attackers Attacks on Energy Infrastructure Global Trade Movements Energy Demand Growth Dependence & Vulnerability 6. Vulnerability as Energy Industry Prevention Methodology

33 ?The BIG Question? How Vulnerable are we as Energy Industry?

34 Energy Terrorism for real? Targeting America in Iraq in terms of economy and losses in life is a golden and unique opportunity. One of the most important reasons that led our enemies to control our land is the theft of our oil... Be active and prevent them from reaching the oil, and mount your operations accordingly, particularly in Iraq and the Gulf, for this is their fate.

35 Impact of non terrorist disturbances It was Katrina not Al-Qaeda that devastated the platforms and refineries along the U.S. Gulf coast in August It was a short circuit not a well-placed bomb that caused the massive blackout in Moscow in May It was not a shoot-out but a labor strike that stopped the pipeline construction in Azerbaijan in November 2005.

36 Tropical Storm Cindy and Hurricanes Dennis, Katrina, and Rita so disrupted the market that the United States sold 11 million barrels of oil from the Strategic Petroleum Reserve and lent almost 10 million. Hurricanes Rita and Katrina shut down about 1.3 million barrels of refining capacity, about 8 percent of the U.S. national total. Much of the shortfall was met by imports.

37 Are Ports/Shipping Still Vulnerable to Terrorist Attack? Many people seem to fear port exposure New York, Norfolk, Charleston, Ft. Lauderdale, Los Angeles, Seattle all cited as making progress Canadian Exposure: 3 million containers travel in/out of Canada each year valued at C$70 billion 27% of the 1.5 million containers imported into Canada wind up in the US Source: Wall Street Journal April 21, 2003; Insurance Information Institute, from US Coast Guard

38 Terrorist Risk Factors From Shipping CARGO Smuggle people/weapons Use cargo to transport weapons (conventional, nuclear, bio or chemical PEOPLE Attacking ship to provoke human casualties Use cover of seafarer ID to insert terrorist opratives EXTERNAL IMPACTS Loss of life/prop. damage Disruption to Trade Flows Higher transport costs due to added security VESSELS Use vessel as weapon Use to launch attack Sink to disrupt infrastructure MONEY Use shipping revenue to fund terrorist activities Use ships to launder money for terrorist organizations Source: Security in Maritime Transport: Risk Factors and Economic Impact, Organization for Economic Cooperation and Development (July 2003); Insurance Information Institute

39 Other Factors Political Events War fears

40 In sum, spectacular terrorist attacks against the global energy infrastructure are rare

41 Presentation Outline Defining Terrorism Attackers Attacks on Energy Infrastructure Global Trade Movements Energy Demand Growth Dependence & Vulnerability Vulnerability as Energy Industry 7. Prevention Methodology

42 Preventions Methodology 1. Project Planning Meeting--Setting the right course with the company/client 2. Facility Characterization and Critical Asset Identification--A thorough characterization of site asset characteristics and hazards 3. Identify and Prioritize the Threat--Complete evaluation of threats; internal, external, internally-assisted 4. Vulnerability Analysis--Prioritized evaluation of threats against assets 5. Risk Assessment defining the potential for damage to or loss of an asset 6. Countermeasures Identification and Effectiveness Measurement--Prioritized validation and justification of costs for improved security, highlighting process/operations benefits

43 New Oil Supply - a long run proposition subject to politics Alaskan North Slope Gulf of Mexico Territories of the Former Soviet Union West Africa Venezuela Brazil Libya PG countries including Iraq, Iran and Saudi Arabia Global Warming and the Green Movement

44 What if.? The Saudi s don t make the investment to expand production? Russian becomes inhospitable? Non-OPEC doesn t produce some big finds? Can American Politics live with $ per barrel oil?

45 Utility of History? The past does not repeat itself, but it may rhyme. -- Mark Twain

46 For any Question / Suggestion P/s feel free to Contact the Authors 1.Shivika Mehta shivika.mehta@yahoo.com 2.Mrinal Madhav mrinalmadhav@gmail.com Affiliation Hindustan Petroleum Corporation Limited, INDIA