Vigilance Key Security Component

Be a Hard Target

As oil prices periodically scale new heights, the bears and the bulls hold firm to their respective opinions.

On the one hand, oil supplies are ample, and it's just speculators bidding the price upward.

On the other hand, excess capacity margins are razor thin and demand is growing, justifying the price spikes.

The jury may be out, but lots of folks are plenty worried about a lot of what-ifs.

In fact, a group of Washington, D.C., policy makers, along with some former CIA directors, recently engaged in an exercise of simulated oil shock waves. The ensuing postulated scenarios were not pretty.

For starters, they considered the potential impact of a sudden loss of as little as 600,000 daily barrels from Nigeria, where unrest abounds and the U.S. Embassy recently shut its doors due to security concerns.

They envisioned this relatively small cut in supply to the world oil market could kick crude oil prices up to $80/barrel -- and gasoline way over three bucks a gallon in the United States.

And the progressively grim pictures they painted from additional simulated oil shocks of increasing magnitude? You really don't want to know.

Perhaps because it's so daunting even to think about, the group failed to play "let's pretend" with the dicey issue of the Malacca Straits, which is one of the world's busiest ocean highways and a favorite haunt for pirates.

It's reported that 10 million barrels of crude oil pass daily through this crowded and vital shipping lane, which constricts to less than two miles across at its narrowest point. Should the trouble-making pirates be joined by a few of their terrorist brethren for some serious action, the ensuing chaos and its global fallout likely would be beyond the creative imaginings of even the most paranoid doomsayers.

"We've been looking at the Malacca Straits for a long time, and it's going to be a huge problem in a lot of ways," said Will Gunther, president of Operation Corporate Training.

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As oil prices periodically scale new heights, the bears and the bulls hold firm to their respective opinions.

On the one hand, oil supplies are ample, and it's just speculators bidding the price upward.

On the other hand, excess capacity margins are razor thin and demand is growing, justifying the price spikes.

The jury may be out, but lots of folks are plenty worried about a lot of what-ifs.

In fact, a group of Washington, D.C., policy makers, along with some former CIA directors, recently engaged in an exercise of simulated oil shock waves. The ensuing postulated scenarios were not pretty.

For starters, they considered the potential impact of a sudden loss of as little as 600,000 daily barrels from Nigeria, where unrest abounds and the U.S. Embassy recently shut its doors due to security concerns.

They envisioned this relatively small cut in supply to the world oil market could kick crude oil prices up to $80/barrel -- and gasoline way over three bucks a gallon in the United States.

And the progressively grim pictures they painted from additional simulated oil shocks of increasing magnitude? You really don't want to know.

Perhaps because it's so daunting even to think about, the group failed to play "let's pretend" with the dicey issue of the Malacca Straits, which is one of the world's busiest ocean highways and a favorite haunt for pirates.

It's reported that 10 million barrels of crude oil pass daily through this crowded and vital shipping lane, which constricts to less than two miles across at its narrowest point. Should the trouble-making pirates be joined by a few of their terrorist brethren for some serious action, the ensuing chaos and its global fallout likely would be beyond the creative imaginings of even the most paranoid doomsayers.

"We've been looking at the Malacca Straits for a long time, and it's going to be a huge problem in a lot of ways," said Will Gunther, president of Operation Corporate Training.

"The shipping problem is beyond control at the moment," he said. "It can be fixed, but it's going to take a lot of extra effort to protect those ships."

Security Blanket

Meanwhile, there's plenty of effort currently focused on keeping energy supplies and facilities safe from any would-be attackers darn near everywhere, including the United States.

It begins at the beginning.

"Security starts with the property owner, who has the basic security responsibilities," said Ronald Branch, captain with the U.S. Coast Guard 8th District.

Branch, who is responsible for all maritime safety and security operations for 26 states and all offshore Gulf of Mexico OCS operations, delivered a luncheon presentation on offshore security at the 2005 OTC meeting in Houston.

"Security is an awareness," he noted. "It's looking at your facility or property -- a vessel, a rig, etc. -- and doing a risk assessment. You want to know where it's at the highest risk, where the vulnerabilities are and what actions are needed to mitigate it."

Gunther concurs with the vital role of awareness.

"Nothing happens without surveillance," Gunther said. "No one picks out a target the day before they hit it. In the target selection phase, the attackers will be looking at a lot of things, like a refinery, a pipeline, and figuring out what's the easiest to attack -- and they'll have to be in certain observation spots to figure out what's going on.

"You must train your people to notice people and things out of the ordinary, to interact with people in the area and to keep a log to compare with one another," Gunther said. "They should question visitors who have no appointment, write down their I.D. information in front of them, ask what they're doing. They'll know they've been compromised and can't come back.

"And you need to point your cameras out to where people might be stationed to observe the facility and maybe watch things like the boss coming and going," Gunther noted. "This way, you're constantly pushing your perimeter out."

Watch Party

It's difficult, if not impossible, to pinpoint which is more at risk in the mix of refineries, pipelines, offshore platforms and more; they each have their own issues.

Despite the general perception that great lengths of pipelines are vulnerable, Gunther noted there are critical points that are easier for would-be attackers. For instance, a 100-mile pipeline might have three miles total length where it would be threatened. While not 100 percent, every advantage helps.

Refinery security in large part is back to the basics of observation, probing and identifying the vulnerable points.

Few would argue the relatively isolated offshore oil and gas installations have their own special set of security needs -- not all of them onsite.

"Offshore security begins onshore," Gunther pointed out. "For instance, we usually tell people to scrub their Web site and leave a few pertinent pieces out. You don't have to be so precise about where your rigs are."

Deepwater facilities are relatively hard to reach, so it's the accessible offshore area out to about 90 miles that's the main security challenge.

"Cigarette boats can go out there," Gunther said. "In Somalia, even little fishing boats go there; it's crazy. And in the Malacca Straits, we see boats out all the time that aren't worthy for those oceans."

There are, in fact, a vast array of folks regularly moving to and from the offshore facilities via helicopters, supply boats, etc. While this poses its own set of security issues, which are constantly being addressed, it has an upside as well.

"There are a lot of eyes and ears out there," Branch said. "You get all these people on the helicopters, vessels and rigs with their eyes open, and it's like a neighborhood watch.

"Everybody's watching, so it makes it harder for something to happen," he continued. "The people in that environment know when something is unusual, and they recognize when something's out of place and not a part of normal day-to-day operations."

One method the Coast Guard employs to keep tabs on the ongoing high level of activity in the Gulf of Mexico in general is the Automated Information System (AIS). Ships entering the Gulf as well as those operating there are equipped with transponders that send signals to receivers to provide information such as location, speed, direction and the like.

In fact, AIS receivers are mounted on several offshore platforms and drilling rigs.

However, such high-tech measures are ill suited for the ubiquitous fishing boats that covet the offshore platform locations. And because there are no regulations to prohibit this activity, it behooves the oil company personnel to know exactly who is in those boats doing the fishing.

The Coast Guard and the oil companies have a long relationship on the inspection and safety side, with security now being a vital component of the mix. In fact, the Area Maritime Security Committee, which was created via the Maritime Transportation Security Act, includes members from major oil companies and organizations, Branch noted. The committee conducts exercises and drills to address the whole offshore maritime security arena.

'The Big Three'

Besides the ongoing emphasis on observation and awareness, Gunther stressed the need to control access and information.

For instance, the labor force in general doesn't need to see things they don't have to see, such as certain schedules that they might talk about in front of the wrong people.

"You need to isolate critical components and information from the average onlooker," Gunther said. "Eliminate access to different pieces, components, control rooms, etc.

"It's all about the Big Three: observation, access, information," he said. "Through training, assessments, procedural changes you can make yourself a much more difficult target than with all the big cameras and stuff you can put on top and see for five miles.

"The idea is to be a hard target," Gunther added. "They will look at several, and if you make yours too difficult, they'll go to another facility or person depending on their objective. If you stop them from observing and make yourself a harder target, then you've already won."

A caveat: This is an un-measurable position, Gunther noted.

When queried as to future hot spots for terrorist activity, Gunther was quick to respond.

"The area around the Arabian Gulf will be the most subject to terrorism," he said. "The trouble spots will be anywhere there are Western facilities.

"We'll see a movement into west Africa in terms of attacks on facilities," he said. "And as more people move in to explore, there'll be the potential for kidnappings, violent robberies and stuff. I've worked there, and it can be violent and lawless in a lot of places.

"And I think across the top of North Africa likely will be a hotbed of activity."