Everyone has a deadbolt and peephole. Car alarms have become so ubiquitous, we rarely notice when they go off. Just ask the mischievous juveniles in my neighborhood who regularly trigger them as a classic urban prank.
We went to war in Iraq following the 9/11 attacks to find weapons of mass destruction that, if deployed, could wreak mayhem in the U.S. Our precursor for remaining in Afghanistan — a conflict with no real exit strategy — is the same.
As any CIA or Defense Dept. analyst worth his salt will tell you, the U.S. remains exposed not only to attacks on our home soil. We are just as vulnerable to assaults on critical economic resources and supply lines.
A recent explosion on the M Star, a Japanese supertanker operated by Mitsui O.S.K. Lines near the Straits of Hormuz at the mouth of the Persian Gulf, underscores this vulnerability. Although there is no confirmation yet that the vessel was attacked by external forces, the incident on the M Star vividly demonstrates our susceptibility to economic disruption in ways that most Americans do not perceive and against which our military can offer little protection.
Counting the Advantages
Providing a steady supply of crude oil to the U.S. and the rest of the industrial world is a tricky business. In 2007, total world oil production amounted to approximately 85 million barrels per day (bbl/d), and around one-half, or over 43 million bbl/d of oil was moved by tankers like the M Star on fixed maritime routes. On an aggregate basis, about two-thirds of the world’s oil trade (both crude and refined products) moves by tankers of various sizes and configurations.
Tankers have made the global transport of oil possible because of their relatively low operating costs and efficiency combined with their ability to flexibly deliver product where the demand is highest. Despite their economic advantages, most risk analysts agree that protecting this thin black line of supertankers crisscrossing the globe is our Achilles’ heel. Nowhere is this challenge more magnified than in chokepoints like the Straits of Hormuz.
Each day, 365 days a year, approximately 17 million bbl/d pass through Hormuz. Considering that the capacity of most VLCCs (Very Large Crude Carriers) is about 200,000 barrels, this adds up to nearly 85 ships navigating this critical shipping lane every day.
Most of the oil passing through Hormuz is bound for the Japan, Korea and the U.S. A substantial portion of the tanker traffic is booked to feed the growing appetite for oil in China.
At its narrowest point, Hormuz is only 21 miles wide. During the Iran-Iraq war in the 1980s, sea mines were littered throughout the channel. According to the folks who spend their days in cubicles studying these issues, the only viable alternative to moving oil through Hormuz is a 785-mile east-west pipeline through Saudi Arabia to the Red Sea. Pipelines, however, are not nearly as flexible, and pose their own set of unique vulnerabilities.
By comparison to the Straits of Malacca, securing the sea lanes through Hormuz is a walk in the park. Malacca encompasses a 500-mile passage between the southern tip of the Malay Peninsula (passing near Singapore) and the Indonesian island of Sumatra. At its narrowest juncture near Singapore, the channel tapers to a mere 1.7 miles. For lumbering behemoths like VLCCs that are nearly 1500 feet long by 225 feet wide and notoriously difficult to maneuver, this is a tight fit.
Monitoring the tanker traffic in Malacca is a nightmare. VLCCs are not the only vessels negotiating the Straits. Malacca is filled with container ships outbound from manufacturing ports like Singapore and specially-equipped tankers — considered by some to the most dangerous and vulnerable vessels afloat.
The Real Dukes of Hazard
Collisions in this busy narrow sea lane are not unusual. Disruptions by pirates are becoming more frequent, and there was at least one terrorist attack on a tanker in 2003. Abu Sayyaf, a militant Islamic separatist group based in the Southern Philippines and believed to be connected with Al Qaeda in Asia, claimed credit for the attack.
Smoke and haze from accidents frequently pose a navigation hazard in the Malacca Straits. It’s not hard to imagine the havoc that would result from a terrorist attack and a sunken vessel at the narrowest point of the channel. The sea lanes could be disrupted for months, impacting crude supplies to Japan, China and the Pacific Coast of the U.S.
The alternatives to Malacca are to re-route traffic through Lombok or the Sunda Strait in Indonesia. A possible pipeline between Malaysia and Thailand has been on the drawing boards for years. Each, however, has it own unique security challenges.
Along with the Panama and Suez canals, the Turkish Straits connecting the Black Sea with the Aegean and Mediterranean seas is one of the most vulnerable chokepoints on the planet. This 17-mile long waterway in Turkey supplies Western and Southern Europe with oil from the Caspian Sea Region.
At its narrowest point the Turkish Straits – sometime referred to as the Straits of Bosporus – is only a half -mile wide. In 2006, an estimated 2.4 million bbl/d of mostly crude oil flowed southbound through this vital passageway. Traffic through the Straits is expected to increase as Azerbaijan and Kazakhstan augment crude production and exports in the future.
Although Turkish security is renowned, disparate political elements throughout the region, many known for their militancy, continue to threaten the safety of this passage. Complicating matters is that there is no clear alternative that would replace the flow of oil to Western Europe.
Of all the transit routes for crude oil, the Suez Canal remains one of the most vulnerable. This artificial waterway through Egypt connecting the Red Sea to the Mediterranean was a wonder of the modern world when it first opened in 1869. On a daily basis, ships passing through the Suez bound for Europe and the U.S. carry 4.5 million barrels of crude. Because the canal is only 1,000 feet at its narrowest point, tankers are forced to navigate the waterway slowly in tightly controlled conditions.
A single successful assault on the Suez could halt tanker traffic for months. Damage to one of the waterway’s many intricate locks could shut down the canal for a year or more.
The domestic and worldwide economic impacts of a major disruption at any of these chokepoints are well understood. Oil embargos, like those imposed by O.P.E.C (Organization of Petroleum Exporting Countries) during the 1970s, rocked our economy. Despite this wrenching experience, little has been done to ameliorate our vulnerability to future interruptions that happen as a result of either market manipulation or at the hand of a single committed terrorist.
As we have painfully learned from the recent Gulf oil spill, increased domestic oil and gas production brings its own set of issues. Moreover, giant oil platforms like BP’s Deepwater Horizon are in and of themselves fat targets that would be a plum for any organization that wished to cause both economic and ecological harm to the U.S.
The long-term solution to these gnawing vulnerabilities is clear. As a nation, we must redouble our vow to increase efficiencies and the development of homegrown alternatives that limit our exposure to these external uncontrollable forces.
While he may not have been our most effective President, Jimmy Carter got it right when he said that finding alternatives to our dependence on imported energy is the “moral equivalent of war.”
John Cohn is a senior partner in the Globe West Financial Group based in West Los Angeles. He may be contacted at www.globewestfinancial.com
