Hijacked Supertanker Underlines Our Energy Vulnerability

Analysts once suggested that supertankers, a challenge to control, could not be taken by pirates. But pirates from desperate Somalia demonstrated that such pronouncements become just another challenge to be met, by managing to hijack a Saudi supertanker carrying 2 million barrels of crude oil. “Somalis turned the lack of an effective coast guard and police to their advantage to hijack ships and bring them and their crews back home,” writes attorney and security analyst Michael Frodl for National Defense. He lists the many short-term ways for the shipping industry and governments to prepare, including patrolling oceans, paying hefty insurance fees, training and paying crews to resist pirates, anticipating spills and environmental clean-ups, as well as investing in satellite and other technology. In the long run, Frodl argues, the ultimate national-defense energy strategy requires reducing dependence on fossil fuels. – YaleGlobal

Hijacked Supertanker Underlines Our Energy Vulnerability

Michael G. Frodl
Tuesday, February 17, 2009

The hijacking on the high seas by Somali pirates of a super tanker carrying 2 million barrels of crude oil destined for the US, and the multi-million ransom they demanded, created many troubling precedents and could not make the vulnerability of our energy supplies any clearer. No less than the Chairman of the Joint Chiefs expressed amazement at a hijacking 450 nautical miles out to sea, the first precedent (most hijackings have occurred closer to Somali waters, usually 50 miles out at most, or in the nearby Gulf of Aden). The second precedent was the hijacking of the first VLCC (“Very Large Crude Carrier”), something that many piracy experts argued couldn’t be done (given the ship’s size and the challenge of steering her safely). The third precedent was the $25 million ransom (ransoms had averaged $1 to $3 million at most). The hijacking of the Saudi “Sirius Star” therefore in more ways than one a “game changer”, and we are still in the game. Even if we resolve once and for all to reduce our consumption of oil, we’ll still be depending daily on millions of barrels of it from domestic and foreign sources for many years to come. The hijacking leaves us with no choice but to defend our high seas supply lines long into the future, while it also teaches us that a new national defense energy strategy is indeed needed to reduce our dependence on foreign oil.


Somalia’s implosion as a functioning nation state dates back to the early 1990s. Soon afterwards, the US attempted to protect humanitarian food deliveries that were being intercepted by war lords. “Mission creep” led us to “Blackhawk down” and was followed by a retreat of the US military from Somalia (which it is said inspired OBL to become even more bold in his attacks).


A region without much of a functioning national government attracted all sorts of trouble. International industrial fishing fleets were tempted by the unsupervised waters and over fished with impunity. Criminal gangs in Europe saw Somalia as a good place to dump hazardous waste. And foreign Islamists, not a few associated with al Qaeda, found refuge in Somalia, too.


Somali fisherman formed their own “coast guard” in an attempt to repel the foreign fishing fleets. When that proved ineffective, some realized that “fishing” for foreign ships was more rewarding than going after dwindling fish stocks. Somalis weren’t content, though, with simply boarding defenseless ships and terrorizing captain and crew into handing over cash and other valuables, and then quickly releasing the ship. Somalis turned the lack of an effective coast guard and police to their advantage to hijack ships and bring them and their crews back home. Pirates in other countries sometimes keep a ship, repaint it, remove all markings and sell it and its cargo to people who don’t ask questions. But Somalis have made it a specialty of grabbing ships and kidnaping crews and holding them for ransom. It’s a very risky game even for seasoned pirates.


It didn’t take long for this cottage industry to get professional. Fishermen started using better weapons, hiring paramilitaries for boarding parties and “geeks” to run the high tech tools. Clan members in the West procured their pirate cousins satellite phones, GPS devices and computers, and also provided cash advances, all in exchange for a percentage of the ransom. As long as Somali pirates didn’t engage in needless violence upon seizing a ship (not that hard since merchant marine crews are usually not armed), took good care of the ships and treated the crews well, most ship owners paid the ransom after a few months haggling. Somali ransoms became a sort of “toll” that had to be endured by shippers - not insignificant, but not prohibitive either.


Very soon the fishermen were negotiating on average million dollar ransoms. At any one time they held maybe 200 to 300 crew members captive. The life of a pirate became something for young Somalis to strive after: fancy foreign sports cars, pretty girls after you, nice lodgings, big wad of cash in your pocket. The economy of Somalia became pirate-centric - and so did the police and what remained of the government, too. Everyone benefited, and everyone got corrupted. Only southern Somalia where the Islamists are in control resisted the lure of piracy.


Then Somali pirates got really greedy and seized the Saudi Sirius Star. A ship over 1000 feet in length, she represents the largest class of oil tanker there is these days - the VLCC. She weighs 300,000 tons, has a draft of 17 meters and when fully laden transports 2 million barrels of crude (roughly 1/4 of a day’s Saudi production). She cost $140 million to build and the day she was seized far off the coast of Kenya, her load of oil could have fetched $110 million. She’s the biggest and most valuable ship seized by pirates in all history. Her capture could not be ignored.


Somali pirates did not just stumble across her on the high seas: they had to have planned this hijacking meticulously. They probably had a spy at the Saudi port she steamed out of who alerted them to her time of departure and intended path, and maybe even on board too. For a “mother ship”, the pirates had hijacked a tug boat in Nigeria months earlier and piloted it thousands of miles around the Cape of Good Hope. The tug allowed the pirates to go out far to sea and survive massive swells far better than the fishing ships they had used before. They loaded high speed rubber craft onto the tug and then crept up on the lumbering tanker most likely at night from behind (tankers used to move at 22 knots, but to save fuel now move only at 15 or less). If the crew of the VLCC spied the out of place tug as she commenced her attack, any attempt to put distance between them would have been fruitless - you don’t throw a 300,000 ton vessel into “all ahead full” and see any meaningful increase in speed before the hostiles board you. The pirates took her home and because of her deep draft parked her no closer than three miles out at sea. That they pulled that off without grounding her proved the experts wrong: no ship is too big to hijack and steer safely home. The pirates then demanded an eye-popping $25 million ransom.


When the pirates who seized the Ukrainian MV Faina in late September demanded $10 million from the owners to get the ship carrying 30 Soviet-era tanks back, ship owners and insurers were shocked but thought they still had a “one of a kind” case, given the unusual cargo. When the pirates who seized the Sirius Star demanded $25 million, ship owners and insurers realized instead they had a nasty trend on their hands and that things were only going to get worse.


While at least one ambitious insurer associated with Lloyds came out in December with new piracy insurance that protects a ship for one transit through the Gulf of Aden for up to $1.5 million, most others realized that they’d not be able to charge enough premiums to keep up with the escalating claims. Lloyds denounced pirates as “terrorists of the high seas” and insisted that ransoms no longer be paid. The Saudi foreign minister agreed with Lloyds. Some oil tanker owners began looking to avoid the Gulf of Aden entirely and take the longer route around the Cape of Good Hope, even if it meant 10 to 14 days longer for deliveries and about a half million dollars more in fuel and labor costs. Insurers and ship owners also started calling for military intervention against the Somali pirates.


The problem was that only a small handful of warships patrol in the western Indian ocean. The US, UK, French and German, as well as Russian, Indian and Malaysian warships numbered maybe a dozen, all told. Barely enough to patrol a shipping lane through the Gulf of Aden, 15 miles wide and well over a thousand miles long. By some estimates, 22,000 commercial ships traverse the Gulf yearly, going to or coming from the Suez canal. The small flotilla of warships was nowhere near what was needed to patrol the entire Western Indian ocean - a million square miles of open water. Even with new warships dispatched from China, South Korea and elsewhere by the end of December, the international flotilla would still be woefully undersized.


If increased patrols weren’t the solution, insurers and shipping companies called then for a naval blockade of Somalia and attacks on pirate bases. Other than the longer and more costly trip around the Cape of Good Hope, shippers had little else they could do on their own other than to hire private security guards, but that is by no means without danger - guards can sink a ship with their own arms if not careful - and the presence of armed guards can therefore void insurance coverage. Nor are guards always effective - a chemical tanker attacked by just five well armed Somali pirates saw its three unarmed British private guards jumping overboard to escape capture after a short fight with water hoses which only angered the Somalis and boarded anyway.


To complicate matters, crews of commercial ships are learning that the Gulf of Aden is very dangerous. Some crews are simply stopping their ship dead in the water and refusing to enter the Gulf. Other crews are not letting pirates board without a fight - one Chinese crew pelted Somalis with Molotov cocktails and successfully repelled the attack. The captured crew of one hijacked ship staged an unprecedented (and unsuccessful) rebellion against their captors, and the crew of another hijacked ship released after a ransom was paid came up short three crew members - Kenyan authorities reported that the three had died in “suspicious circumstances”. All these stories shared among crew members will only lead to more resistance by crews against pirates, and as a result crew members will get hurt or killed in larger numbers. The delicate equilibrium of capture without resistance, followed by patient haggling and then payment of ransom and return without harm is increasingly a thing of the past for Somali pirates.


Further complicating things, the Russian navy is very eager to rush to the rescue. Moscow claimed that the nominal Somali national government invited it to enter its territorial waters and recover the Soviet era tank-carrying MV Faina. Even if true, why would Russia be allowed to recover a Ukrainian ship when no proof existed that Kiev had ever even asked Moscow for help? More likely, the Russian navy was looking for a pretext to pose as the rescuer of choice, as well as gain leverage over Ukraine. The Russian navy and foreign office began even threatening to go back to the old British Royal Navy tactic of “cutting out’ pirate bases and lay waste to Somali coastal towns.


If the Russians succeed in recovering the MV Faina, they could very well be emboldened into trying to free the Sirius Star, even if its Saudi owners insist they do nothing of the sort. If Russian commandos botch that rescue and the VLCC is damaged, we might see an oil spill threaten the Eastern coast of Africa that would make the Exxon Valdez spill look small by comparison. Clean up could easily cost shippers and insurers $10 billion or more. The destruction of the World Trade Center was a $20 billion covered event, by comparison - so the destruction of a VLCC could be a maritime “9-11" for insurers and bankrupt the entire industry, especially now that underwriters are so weakened by the global recession (AIG used to represent over half the world’s global insurance capital reserves). Even if her recovery incurs “only” loss of life and property without a giant ecological disaster, insurers are likely not just to hike prices, but to revoke marine insurance altogether and offer only much more expensive war insurance - the western Indian ocean risks would become a de facto “war” zone and that would drive many commercial ships away. This is happening gradually anyway - the destruction of the Sirius Star would only speed things up.


Even more troubling, what may really be motivating the Russians is the goal of resurrecting their massive Cold-war naval base on the strategically located island of Socotra in the Gulf of Aden. In the 1980s the Russians spared no expense to build one of the world’s biggest military ports, with dry docks and a giant submarine base on the island leased from South Yemen. We might see Moscow’s hand on the spigot for Middle Eastern oil to Europe, in addition to the other hand already controlling natural gas pipelines to Europe (and on New Year’s eve Moscow was giving notice to Kiev that it was going to close that pipeline again, which would also cut off supplies to Europe that go through Ukraine). If Europe has an energy security problem, by extension so does the US too.


By mid-December, the US (through the voice of the State Department) was falling in line with the UK and agreeing to pursue military operations against pirates in Somali territorial waters and even on land, if only so as not to leave a complete void for the Russians to exploit (although the Pentagon was publicly expressing all sorts of reservations about launching such operations). A UN Security Council resolution was sought successfully by the US (State Department) and the UK to allow just that.


Not by coincidence, the terrorist attacks on the Indian port city of Mumbai in late November were perpetrated by terrorist marine commandos delivered to shore by fast rubber speed boats dropped from a hijacked Indian fishing trawler converted into a “mother ship”. Islamist terrorists from Pakistan have obviously been sharing tactics with pirates and taking advantage of the same thing Somali pirates exploit - poorly patrolled waters in the Indian ocean.


Some insurers and shippers might very well give up entirely on this increasingly violent ocean. But other commercial interests will still be obliged to navigate its dangerous waters, including oil tankers leaving the Persian Gulf. Iraq’s Defense minister was quoted as saying that if the US were to leave “too soon”, the Gulf could become as pirate-infested as Somali waters (for which there is historical precedent). This is serious business for the Iraqis, as 90% of their revenues come from oil exports. Tankers leaving the Persian Gulf, even Iranian tankers, might soon have no other option in the western Indian ocean than to move in convoys with military escort. In the Gulf of Aden, no less than ten days after the hijacking of the Sirius Star, convoys of tankers and other freighters began spontaneously forming behind warships escorting individual commercial ships through the Gulf of Aden. It’s now standard policy for ships to wait (despite the added cost and delay) for a sufficient number to amass to form a convoy and for warships to provide escort.


Beyond the patrolled Gulf of Aden corridor, the US and other navies should focus on locating and destroying the larger ships pirates have hijacked and not returned to their rightful owners but instead have converted into high seas “mother ships”. “Mother ships” have become the “aircraft carriers” of the pirates (more like “high speed boarding craft carriers”), allowing them to project power well beyond their local waters. The navies of the world need to deny pirates this new improvised weapon and push them back closer in to Somali shores so commerce can safely steer clear of this threat (preferably, within the Somali pirates’ old 50 nautical miles operating range).


Modern international law defines “piracy” as any criminal activity for private gain on the high seas (criminal activity for political reasons by, for example, independence groups is exempted, while criminal activity in territorial waters is the coastal state’s responsibility). While allowing navies of any nation to combat so-defined “piracy” (although pirates have to be caught literally in the act most times), international law limits the use of deadly force by warships to self defense. So, although limited, there is a legal way to rid ourselves of the problem, as long as Somali pirates cooperate and open fire on warships wanting a closer look at their mother ships - as did one recently hijacked ship one night that was promptly sunk by an Indian warship.


The US already has maritime security satellites that can monitor sea traffic. We also have long range aircraft that can inspect suspicious ships more quickly, at greater distances and more cheaply than any warship can, even if it has a helicopter. We also have UAVs that can loiter. We can and should use those resources to locate and identify potential pirate “mother ships”.


A regional navy like India’s - the fifth largest in the world - also intends to use satellites and aircraft, and should also join the hunt against high seas “mother ships”. India already deployed naval reconnaissance aircraft to Djibouti, in a redoubling of its efforts to combat piracy after the sea-launched attacks on Mumbai. India’s navy has become the premier force combating Somali piracy and is a counter weight not just to the Russian navy, but also now the Chinese.


China, along with India, have the most to lose or gain in the Indian Ocean, be it from shipping finished exports to Europe and the US, or importing raw materials and oil from Africa. The Indian ocean sees 60% of the world’s commerce transit through its waters, and a lot is Chinese and Indian trade, in addition to Arabian oil for the US and our allies. Today’s “Great Game” is being played out more on the high seas lanes of the Indian ocean - and not as much the land routes of southwest Asia as it was in the 19th century.


Bottom line, the US and its European and Asian allies - and even our arch rivals - can’t abandon to pirates sea lanes upon which transit over 90% of the global economy’s raw materials and finished goods, and especially our vital energy supplies.

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Michael G. Frodl is a tax attorney and co-founder of the Forum for Environmental Law, Science, Engineering and Finance. His personal views do not represent those of FELSEF.

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