Oil Drilling For National Defense

When Nancy Pelosi and her Democratic congressional clones refuse to allow the US to take advantage of our own Oil reserves, they are not only driving up your gas prices but endangering our national defense. On one level with every dollar we spend on gas we are financing terrorism, but that is only part of the story. Over and over, al-Qaeda has promised to disrupt the Oil supply lines, and those nuts in Iran have hinted at closing the Straits of Hormuz, another way to turn of the Oil spigot. THE ONLY WAY to guarantee an uninterrupted supply of fuel to the United States is to exploit our own resources, anything else makes this country vulnerable:

The Strategic Vulnerabilities of Oil Dependence

By Daveed Gartenstein-Ross

July 21, 2008

America’s dependence on oil is its Achilles’ heel in the battle against terrorism, a fact that has not escaped the terrorists. Osama bin Laden and other terrorist leaders have declared the oil supply a top target, while plots by al-Qaeda and other groups have demonstrated their desire to disrupt world energy markets. A catastrophic attack on key facilities would devastate the world economy, but disruptive attacks that fall short of that are also a powerful tool of asymmetric warfare. This significant weakness should factor heavily in current political debates about alternatives to oil. Terrorist Targeting Osama bin Laden initially considered the Islamic world’s oil wealth off limits as a military target. In his 1996 declaration of war against the West, he asked his followers “not to include it in the battle” because he saw oil as “a great Islamic wealth and a large economical power essential for the soon to be established Islamic state.” This did not stop Islamic militants from attacking foreign oil workers, as two separate attacks in Saudi Arabia in May 2004 demonstrate.

Then, in a December 2004 audiotape, bin Laden reversed his earlier promise. Declaring Western countries’ purchase of oil at then-market prices “the greatest theft in history,” he stated: “Focus your operations on it [oil production], especially in Iraq and the Gulf area, since this [lack of oil] will cause them to die off [on their own].” Since then, al-Qaeda’s public statements have frequently reflected the group’s desire to damage world oil markets. Bin Laden’s deputy Ayman al-Zawahiri said in a December 2005 video: “I call on the holy warriors to concentrate their campaigns on the stolen oil of the Muslims, most of the revenues of which go to the enemies of Islam.” Sawt al-Jihad, the online magazine of al-Qaeda in the Arabian Peninsula, noted in February 2007 that “cutting oil supplies to the United States, or at least curtailing it, would contribute to the ending of the American occupation of Iraq and Afghanistan.” Nor is the desire to attack oil targets limited to public pronouncements. Terrorists have targeted key facilities in Saudi Arabia—which is critical to worldwide production because it holds 25% of the world’s proven reserves, produces almost 10 million barrels per day, and is the only country able to maintain excess production capacity of around 1.5 million barrels per day (or a “swing reserve”) to keep world prices stable. Gal Luft and Anne Korin of the Institute for the Analysis of Global Security have notedSaudi Arabia the world’s only guarantor of liquidity in the oil market,” and warn that the country may be particularly vulnerable to attacks because production is dependent on a limited number of hubs: that this spare capacity “makes

Over half of Saudi Arabia’s oil reserves are contained in just eight fields, among them the world’s largest onshore oil field—Ghawar, which alone accounts for about half of the country’s total oil production capacity—and Safaniya, the world’s largest offshore oilfield. About two-thirds of Saudi Arabia’s crude oil is processed in a single enormous facility called Abqaiq, 25 miles inland from the Gulf of Bahrain. On the Persian Gulf, Saudi Arabia has just two primary oil export terminals: Ras Tanura—the world’s largest offshore oil loading facility, through which a tenth of global oil supply flows daily—and Ras al-Ju’aymah. On the Red Sea, a terminal called Yanbu is connected to Abqaiq via the 750-mile East–West pipeline.

Saudi Arabian police made a worrisome discovery in September 2005. A 48-hour shootout at a villa in the seaport of al-Dammam ended on September 6 after Saudi police introduced light artillery. Newsweek reported that when police searched the compound in the aftermath, they found not only “enough weapons for a couple of platoons of guerrilla fighters,” but also forged documents that would have provided the terrorists with access to some of the country’s key oil and gas facilities. Saudi interior minister Prince Nayef bin Abdul Aziz confirmed to the daily newspaper Okaz that the cell had planned to attack oil and gas facilities, and stated, “There isn’t a place that they could reach that they didn’t think about.”

On February 24, 2006, terrorists affiliated with al-Qaeda in the Arabian Peninsula tried to attack the refinery at Abqaiq operated by the state-owned Saudi Aramco. A statement by Saudi Arabia’s interior ministry explained that two cars tried to enter through one of the facility’s side gates, and that a firefight broke out when security officers challenged them. The vehicles were laden with explosives, and the interior ministry claimed that they “exploded near the entrance.” Saudi security adviser Nawaf Obaid told the Arab News shortly after the attack that it was “another indication of how tight and impenetrable the existing Saudi security system is at the main petroleum infrastructure around the country.” However, written evidence submitted to Britain’s House of Commons by Neil Partrick, a senior analyst in The Economist Group’s Economist Intelligence Unit, notes that “other sources create a more disturbing impression than this apparently efficient ‘counter-terror interception’ would suggest.” Partrick writes:

Apparently the first of three perimeter fences of the Abqaiq facility was broached by men dressed in ARAMCO uniforms and driving ARAMCO vehicles. Only as they approached the second perimeter fence were they shot at. The fact that insurgents either had inside assistance from members of the formal security operation of the state-owned energy company to the extent that … they gained vehicles and uniforms, or that security was sufficiently [lax] that these items could be obtained and entry to the site obtained, is seriously concerning.

Indeed, in a 2007 interview with The Futurist, former CIA director James Woolsey said that if the terrorists had gotten within mortar range of the facility, “they could have taken out the sulfur clearing towers. Robert McFarlane, President Reagan’s National Security advisor, tells us that would take six or seven million barrels of oil a day off line for probably over a year.”

There have been other signs of terrorists targeting Saudi Arabia’s oil, including the interior ministry’s April 2007 announcement that it had “foiled an al Qaeda-linked plot to attack oil facilities and military bases,” and its arrests of over 700 suspected militants in the first half of 2008, along with allegations that they were “plotting attacks on oil industry installations.”

Catastrophic Terrorism
Could a catastrophic attack against Saudi oil production actually succeed? Past attempts against Saudi facilities provide reason for concern. Moreover, such a catastrophic attack could be executed using tactics that al-Qaeda has successfully employed in the past. Consider, for example, how an airplane was used as a guided missile on September 11, 2001. It would be difficult to safeguard major facilities against such an attack. Thus, former CIA case officer Robert Baer wrote in his 2003 book Sleeping with the Devil: “A single jumbo jet with a suicide bomber at the controls, hijacked during takeoff from Dubai and crashed into the heart of Ras Tanura, would be enough to bring the world’s oil-addicted economies to their knees, America’s along with them.”

In addition to the offshore loading facility at Ras Tanura, the Abqaiq processing facility is also an obvious target. Baer writes:

At the least, a moderate-to-severe attack on Abqaiq would slow average production there from 6.8 million barrels a day to roughly a million barrels for the first two months postattack, a loss equivalent to approximately one-third of America’s current daily consumption of crude oil. Even as long as seven months after an attack, Abqaiq output would still be about 40 percent of preattack output, as much as 4 million barrels below normal—roughly equal to what all of the OPEC partners collectively took out of production during the devastating 1973 embargo.

Nor do terror groups necessarily need to carry out a dramatic attack inside Saudi Arabia to have a significant effect on the oil supply. The world has a limited number of chokepoints, narrow channels by which oil reaches global markets. The Energy Information Administration has noted that “[t]he blockage of a chokepoint, even temporarily, can lead to substantial increases in total energy costs.” Thus, these chokepoints are another of the energy supply’s vulnerabilities. Al-Qaeda has carried out attacks at sea in the past, most notably the October 2000 attack on the USS Cole. Luft and Korin warn that if terrorists attacked an oil tanker in a critical chokepoint, “the resulting explosion and spreading stain of burning oil could shut down the channel for weeks, with a profound impact on global markets and the maritime insurance industry.”

If an attack is successfully executed according to one of these scenarios, the substantially reduced worldwide supply of oil would be joined by an inflated risk premium. Julian Lee, a senior energy analyst at the Centre for Global Energy Studies in London, told the Guardian in 2004 that following a significant loss of Saudi oil, “it would be difficult to put an upper limit on the kind of panic reaction you would see in the global oil markets.” The ramifications would be not only economic but also military: Sawt al-Jihad may well be correct that such an attack could spell doom for the U.S. ventures in Afghanistan and Iraq.

Disruptive Terrorism
In addition to catastrophic attacks, terrorists can disrupt the global oil supply by targeting specific nodes of production networks. In contrast to catastrophic terrorism, this approach does not require significant resources, a large organization, or complex planning.

Disruptive attacks on oil production are regularly conducted by a variety of terrorist and insurgent groups throughout the world. For example, the Movement for the Emancipation of the Niger Delta (MEND) has been waging a campaign of pipeline, refinery, and oil field attacks since its February 2006 declaration of “total war” against the oil companies operating in Nigeria. The group’s recent activities show the effect that disruptive attacks can have on global markets. Saudi Arabia pledged to produce an extra 200,000 barrels of oil per day beginning in July 2008 to curb record prices, yet MEND and its copycats were able to knock more than that offline in a single week: an attack on Shell’s Bonga field coupled with two attacks on Chevron’s Abiteve Olero crude oil line cut Nigeria’s output by about 400,000 bpd. Though the Nigerian facilities will be repaired, this demonstrates how disruptive attacks can scotch the market’s supply expectations.

Iraq also demonstrates the potential impact of disruptive attacks. Since the beginning of Operation Iraqi Freedom, there have been over 450 attacks on Iraq’s pipelines, oil installations, and oil personnel. Though none of these attacks could be categorized as catastrophic, only in 2008—five years after Saddam Hussein’s regime fell—has Iraq been able to return to a production level of 2.5 million bpd. (It produced an average of 2.3 million barrels of oil per day during the last five years of Saddam’s rule.)

Saudi Arabia has gone to great lengths to guard against attacks on its oil infrastructure. As of 2005, precautions included a $1.5 billion energy security budget, round-the-clock helicopter and F-15 patrols, and the deployment of National Guard battalions. Moreover, most observers believe that disruptive attacks against Saudi Arabia’s oil infrastructure would not be crippling. Kevin Rosser, an analyst with Control Risks Group, has stated: “There’s quite a bit of redundancy built into the [Saudi] network. So even if you manage to stage a successful attack against a single node or maybe even more than one, it wouldn’t be enough to disable the entire system. It’s actually quite resilient to losing one piece.” Kyle Cooper, an energy analyst at CitiGroup Global Markets, has noted: “Saudi Arabia has multiple facilities—if one were damaged, it’s most likely another one would be able to come on line very quickly and replace the lost production.”

But others think that indirect attacks (as opposed to catastrophic strikes on Ras Tanura or Abqaiq) could have a significant effect on Saudi production. John Robb, the author of Brave New War, has constructed a scenario detailing how attacks on Saudi power generation could have a “downstream” effect on the country’s oil production:

The electricity cell was the first to take action with an attack on one of the two high voltage power lines from the Ghazlan power complex. Since Ghazlan provides over 40% of the power in the eastern province and the electrical network is sparse (and except for a single connection to the central region, isolated), this attack caused over voltages that resulted in a system wide blackout that lasted two days. Oil production from the province was cut in half as systems (refineries, pumping stations, port facilities, etc.) that supported the huge Ghawar oil field were unable to acquire the power necessary for full production.

While analysts disagree over the extent, it is clear that disruptive attacks influence global oil markets and thus provide terrorists with another means of damaging the U.S. (and global) economy.

Conclusion

Disruptions of the global oil supply will harm the U.S. and its allies. The situation appears to be growing more rather than less perilous: Luft and Korin noted in their contribution to Francis Fukuyama’s 2007 compilation Blindside that the growing worldwide demand for oil has reduced OPEC’s spare capacity from seven million barrels a day in 2002 to only two million barrels today (less than 2.5% of the market). “As a result,” they write, “the oil market today resembles a car without shock absorbers: the tiniest bump can send a passenger to the ceiling.” Moreover, the world is projected to have 1.25 billion cars on the road in 2030, a dramatic increase from 700 million today.

Blindside was sponsored by The American Interest magazine, based on a May 2006 conference that probed the nature of uncertainty—or, in Fukuyama’s words, “why the future is inherently difficult to anticipate, and how to mitigate our blindness to its vicissitudes.” Amidst other contributors’ discussions of such low probability yet high impact events as an asteroid hitting the earth or a massive outbreak of avian flu, Luft and Korin warned that a severe oil shock generated by a terrorist attack is “an eminently predictable catastrophe if ever there was one.”

Indeed it is: an eminently predictable catastrophe that would dramatically change the global order, in ways that most policymakers have probably never contemplated. There are a great many reasons for the U.S. to pursue alternatives to oil. The threat of terrorism should be a part of the discussion—and it also adds urgency to the equation.