October 26, 2013 | Comments Off
The pirate attack that happened this week highlights the continued risk of supplying and transporting oil products around the world. According to many news reports, two U.S. mariners were kidnapped by pirates off the coast of Nigeria in the Gulf of Guinea.
At 2.2 million barrels per day, Nigeria is by far the region’s largest oil producer and is strategically valuable to the United States primarily because greater production from this region increases the diversity of supply and weakens the ability of OPEC nations to maintain high oil prices. Nigerian crude is also well-suited to American east coast refineries, which are designed to process low viscosity, low sulfur crude into fuels. (although Nigerian imports are down due to substation of light, sweet crude from American shale plays)
Typically, when we think of energy supply routes and constraints we think of the Suez Canal and the Strait of Hormuz where traditional nation-states can control the flow of oil. The U.S. Navy provides security to keep oil flowing in those locations.
However, West Africa poses a different type of security risk. Rogue actors like pirates, more than nation states, can make it more dangerous and expensive to produce oil there. But unlike the Persian Gulf, the U.S. Navy might not be the best solution for securing oil production and transport in the Gulf of Guinea.
In a 2012 report (free PDF), the RAND Corporation concludes that the U.S. Air Force would be more effective to combating Nigerian piracy than naval forces:
In the past decade, however, production has been moving offshore, and by next year, approximately 60 percent of Nigerian production will be from offshore facilities. Installations that tap the offshore fields tend to be larger and have more output, so it is cost-effective to invest sizable resources to protect them. Second, offshore installations are readily visible from the air, yielding a potentially powerful role for aviation forces. Offshore petroleum development is also taking place in other gulf nations, including Ghana, Benin, Cote D’Ivoire, and Equatorial Guinea.
This growing investment in offshore petroleum production provides an opportunity for the U.S. Air Force to contribute to improved regional energy security. Its primary contribution would be to partner with the air force of Nigeria, the region’s largest oil exporter, to build its capacity to secure the oil-producing infrastructure from attack. Specifically, we investigated capabilities that would deter or, if necessary, defeat attacks on oil-producing installations by providing a rapid response capability to interdict the perpetrators.
A critical component of energy security is the ability to control the availability of resources, and safeguarding Nigerian oil production shifts some of that control back into America’s hands.