Global Policy Forum

As Threats to Oil Facilities Rise,


By Chip Cummins

Wall Street Journal
June 30, 2004

Petty Officer First Class Craig Semple twirled the steering wheel of the Coast Guard cutter Aquidneck and pulled into the boiling green wake of a dhow. The tiny fishing vessel was darting toward the towering Khor al-Amaya oil terminal -- recent target of a speedboat bearing suicide bombers. Petty Officer Semple blared the ship's whistle as an Arabic-speaking officer on board yelled through a bullhorn. "Stay away," he shouted, karate-chopping with his free hand. "If you don't back off, we're going to shoot you."

The widening turmoil in the Middle East has dealt the U.S. Coast Guard an urgent new task: protecting overseas oil. Along with the Navy, the Coast Guard is gearing up to fight what promises to be a long-term threat of sabotage, most prominently here in a region that provides more than a quarter of the world's oil.

U.S. vessels two months ago helped to repel attacks on both of Iraq's offshore oil-shipping terminals -- structures the size of small islands that load gargantuan oil tankers. Earlier this month, saboteurs blew up pipelines that feed the terminals, briefly denying global oil markets 2% of their supply. And even as killers in Saudi Arabia target Western oilmen, militants threatened this month to attack foreign oil workers in Algeria as well.

The U.S. has long made oil security a foreign-policy priority. But the challenge in the past was to cope with temporary threats of disruption. When Iraq and Iran fought a war in the 1980s, for instance, U.S. warships escorted vessels in the Persian Gulf, but the U.S. reduced its presence once calm returned. Now, however, the U.S. is bracing for an era of continuing attacks by insurgents bent on blocking the flow of a commodity vital to the world's economy. The result is shaping up to be a globe-spanning and open-ended U.S. campaign to offer protection.

More U.S. ships, sailors and soldiers are bound for the Persian Gulf -- and beyond. In Colombia, Army Special Forces are training a brigade of local commandos to protect a pipeline. In Yemen and the Caucasus, the Coast Guard is training local forces who defend oil installations and shipping. U.S. commanders contemplated putting Marines on speedboats in the Strait of Malacca -- a chokepoint between Malaysia and Indonesia through which a seventh of the world's oil passes each day to booming Asia. But regional governments loudly objected.

The sabotage concerns are prompting shifts in tactics and strategy. The Navy recently approved designs for a new vessel, the Littoral Combat Ship, that can operate close to shore near oil terminals, ports and other likely future targets. Commanders are mulling a menu of ideas that include encircling offshore platforms with miles of fencing. And as part of the biggest redeployment of U.S. soldiers since the Cold War, the Pentagon is considering drawing down forces in places such as Germany and sending some to Africa and the Caucasus region between the Black and Caspian Seas.

It is unclear how effective the extra firepower will be. In the Persian Gulf each day, dozens of tankers load up with with crude, and some 16 million barrels of oil pass out of the Gulf daily. Even with American and local navies about, tanker captains say they feel vulnerable in unprotected anchorage spots and shipping channels. Shippers have asked for Navy escorts in the Persian Gulf, a request that U.S. commanders are studying. Massing ships around Iraq's two terminals has been effective so far, says Capt. Kurt Tidd, commander of the Navy task force in charge of protecting the terminals. But the world's oil infrastructure is vast. "We can line up all the ships in the world around all the platforms in the world, and we're going to run out of ships," Capt. Tidd adds.

About 30 U.S. warships now patrol the Persian Gulf and surrounding waters. That's roughly twice the level during the late-1980s hostilities, when Iran and Iraq sometimes fired missiles at tankers filling up in each other's terminals, according to the Naval Historical Center. Ship numbers soared during the 1991 Gulf War but settled back down in the rest of the 1990s, when Navy ships and jets helped to enforce United Nations sanctions and no-fly zones in Iraq.

The Coast Guard, which had reduced its Persian Gulf presence soon after the invasion of Iraq last year, recently reversed course. It's now sending two more cutters -- highly maneuverable, lightly armed ships about 110 feet long. They and their crews will bring the Coast Guard's presence here to six cutters and about 400 sailors. "I don't see this ending anytime soon," says the Aquidneck's commander, Lt. Richard Burke. For the Coast Guard, the overseas oil duties come even as the service has made port security within the U.S. its top job, escorting tankers in Alaskan waters and patrolling Houston's port.

The Persian Gulf buildup comes as the region's oil appears to be growing even more vital. With global oil demand expected to rise more than 50% in a quarter-century, much new oil will have to come from the Gulf region, which holds almost two-thirds of reserves. The oil industry is already struggling to meet demand, owing partly to years of underinvestment by producing countries and oil companies. Prices hit record levels in early June, though in inflation-adjusted terms they didn't match a price peak following the 1979-80 Iranian revolution. That surge led to global recession.

As much as a quarter of today's price is thought to be a "terror premium," reflecting worries that attacks could cut oil supplies. In addition, since the early 1980s, the U.S. military has spent an average of $4 to $5 per barrel to protect oil leaving the Persian Gulf, estimates Amy Myers Jaffe, an analyst at the James A. Baker III Institute for Public Policy at Rice University in Houston. Such hidden costs appear likely to rise. The Pentagon and the Navy's Fifth Fleet, which patrols Persian Gulf waters, are brainstorming for ways to protect an industry that until recently they knew little about. A Navy think-tank is looking to technology analysts for solutions.

Some ideas they're mulling: Military-grade radars and other sophisticated sensors could link oil infrastructure such as terminals electronically to nearby military ships or bases. Chain curtains could be draped over offshore installations to prevent attacks from small boats and swimmers. Or miles-long security fences, anchored in the seabed, might be built around platforms.

"In the past month and a half, we've had to become oil-transport experts," says David Russell, a civilian who is operations officer at the Navy's Maritime Liaison Office, a Bahrain-based agency linking shippers and U.S. commanders.

The Coast Guard is serving as the oil police here. It's a somewhat novel role for the service, which traces its roots to 1790, when Treasury Secretary Alexander Hamilton cajoled a young and cash-strapped Congress to build a fleet of 10 cutters -- called the Revenue Service -- to collect tariffs. Coast Guard sailors pitched in during World War II and then patrolled Vietnam's shallow waters two decades later. For months after last year's invasion of Iraq, the four Coast Guard cutters in the Persian Gulf aided Navy warships looking for smugglers of oil, arms and explosives. Protecting Iraq's offshore oil terminals was part of the mission but didn't take much more effort. The platforms seemed relatively safe because they were miles offshore, providing an opportunity to stop any approaching attacker.

That view shifted on April 24. At dusk that day, two suicide attackers in a fiberglass-hulled vessel sped toward the northernmost terminal, Khor al-Amaya. A Navy patrol ship launched a small boat with seven crewmen to investigate. As they approached the fiberglass vessel it exploded, flipping the small Navy boat and killing three of the men aboard. One, a Coast Guard sailor, was the service's first combat fatality since Vietnam. Fifteen minutes later, two other speedboats raced toward the Basra Oil Terminal a few miles south. Iraqi guards on the terminal, after a few warning shots, opened fire on the closest vessel. It blew up about 15 meters from the terminal. The second boat sped toward the terminal and a loading tanker before the guards opened fire and it, too, exploded close by. Neither the tanker nor the terminals were damaged, but exports were halted for most of a day for inspections.

The Navy set a no-go zone of 1.8 miles in all directions from each terminal, and the Coast Guard called fresh ships to the Persian Gulf. The Navy made clear on marine-radio broadcasts and in contacts with fishermen that American ships were ready to use deadly force to protect the terminals, which handle 1.6 million barrels of crude oil a day.

The Coast Guard's Aquidneck, a white-hulled vessel with a red and blue racing stripe, switched from hunting smugglers to full-time defense of oil terminals. For crewmen like Petty Officer Semple, 35 years old, and Petty Officer Third Class Phil Clark, 22, it was a big shift from their assignments before being shipped to the region early this year. Mr. Semple had been with a Coast Guard unit looking after recreational fishermen in the Delaware Bay, while Mr. Clark's duties sometimes included picking up inebriated boaters in the Chesapeake Bay. With the cutter now are occasional guests from a reconstituted Iraqi coast guard. On patrol three weeks ago, the guests included Ali Jawad, a former Iraqi naval officer who was aboard for a training mission.

The crew's first challenge in defending terminals is determining which, if any, of the dozens of vessels encountered daily pose a threat. The Persian Gulf is not only one of the world's busiest shipping lanes but also home to fishing fleets from Iran, Iraq and Kuwait. On a given day, some 300 dhows are within 10 miles of Iraq's offshore terminals. The Aquidneck's public-address system blasts out canned Arabic-language warnings to boats. But many fishermen are Iranian and speak only Farsi.

On a recent June afternoon, the men of the Aquidneck were doing their best to keep boats out of the no-go zone around the Khor al-Amaya terminal. As Petty Officer Semple maneuvered the cutter alongside a wooden dhow drifting into the zone, Petty Officer Clark pushed down a salt-encrusted window on the bridge, stuck out his close-cropped blond head and began waving both arms in the direction he wanted the dhow to turn.

"Go away, go away," he shouted in his Massachusetts accent, as the cutter jerked from side to side in the swell. Dozens of other boats flitted in all directions on the edge of the no-go zone. On the shaded deck of the dhow, a half-dozen fishermen in greasy smocks sat in a huddle, smiling curiously and mocking Petty Officer Clark's gestures. They didn't change course. Petty Officer Semple nudged the cutter closer to the dhow, blaring the horn and tapping the ship's blue police siren for added effect.

"Are they heading toward the terminal?" asked Lt. Burke, the commander, seated in the captain's chair on the bridge. "Yep," replied Mr. Semple over the buzz and crackle of a half-dozen radios. Lt. Jawad, the visiting Iraqi officer, watched the maneuvering from a shaded outdoor platform above the bridge. The American sailors had given him a bullhorn, and he had been shouting at fishermen all afternoon. He picked up the amplifier and began barking again. Finally the dhow moved off, the crew smiling and waving.

Later, Lt. Burke pondered what form the next attack might take. "I don't know what it's going to look like," he said. "But it'll be different."

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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.