Energy Infrastructure Threat Assessments Hyped – Obaid

Published: April 18, 2011

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Editor’s Note:

The Kingdom of Saudi Arabia has been in the gunsights of terrorists for many years, especially since Al Qaeda launched a major campaign of bombings and armed strikes against the government in 2003 to attack officials and targets in the public sector, military facilities, residential areas including Westerners, oil installations, Hajj pilgrims and others. The security forces in Saudi Arabia have produced remarkable results in countering this threat through direct policing action and by undermining the ideological basis for attracting recruits to the effort. Last November SUSRIS provided a report on the results seen by the counter terrorism crackdown in the Kingdom including discussion of Saudi intelligence coordination with Western agencies, lauded by the White House, in thwarting Al Qaeda’s attempt to send bombs to the United States in air freight parcels from Yemen. In March of 2010 General Turki al-Mansour of the Interior Ministry briefed reporters on the interdiction of over 100 Al Qaeda suspects who were planning attacks against police officers and oil installations. SUSRIS has provided extensive coverage of the Saudi Arabian war on Al Qaeda, its challenges, tactics and successes, as you can see from the links that follow this report, including reports on threats against the Kingdom’s oil industry.

SUSRIS has also provided extensive coverage of Saudi Arabia’s efforts to ensure adequate energy supplies reach the world market and concerns about market speculation driving prices up despite the level of inventories on the market. In the midst of the last bout of oil prices skyrocketing Saudi Arabia’s Petroleum Minister Al-Naimi talked about the “parting of the ways when it comes to oil supply-demand balances and other industry fundamentals on the one hand, and the price behavior and market volatility on the other.” In a comprehensive address at the Jeddah Energy Meeting which sought to bring consumers and producers together he said:

“..price rises and volatility are being fueled by a wide range of other factors which lie beyond the ability of the petroleum industry to address or even influence. Perhaps foremost among these are recent trends in the global financial markets, including weak equity and bond markets that have encouraged investors to move their capital into commodities like oil. I would also note that while there is little or no correlation over the past two years between global crude oil inventories and crude oil prices, there has been a strong correlation between the increasing volumes of crude oil futures trade on the NYMEX and rising prices. According to many observers and analysts, inadequate oversight, regulation and reporting of speculative investments in commodities have further exacerbated this situation.”

Today we are pleased to provide an essay by Mr. Nawaf Obaid, senior fellow at the King Faisal Center for Research and Islamic Studies, Riyadh, and long time analyst of regional defense and security issues, addressing the questions of Saudi Arabia’s protection of its energy resources and infrastructure and the impact threat reporting can have on energy market speculation.

Hyped Energy Infrastructure Threat Assessments Fuel Price Speculation
Nawaf Obaid

In recent weeks, the Western media provided a sensationalist run-up to the so-called “Day of Rage” in Saudi Arabia — citing a Facebook campaign as evidence that the kingdom would be engulfed in the same turmoil that has swept the Arab world. As we now know, this uprising was a chimera of the press.

We are now facing another, more dangerous illusion: the vulnerability of Saudi Arabia’s energy infrastructure. In recent weeks some pundits, oil traders and journalists have peddled a deceptive assessment of the threats facing the kingdom’s ability to supply oil to the world, and this fear-mongering has had very real consequences, driving the price of oil to irrational heights, adding skittishness to the markets and threatening the nascent global economic recovery.

No system as vast as the Saudi oil complex — with its scores of rigs, refineries, export terminals and pipelines — is perfectly protected. But a brief overview of the safeguards built into this infrastructure — the forces that protect it and the demographics of the region — sheds light on the actual security situation and reveals the risks are much less serious than widely disseminated.

The first layer of security in the Saudi energy infrastructure is simply the design and construction of the facilities. Two failed attacks show this well.

The first happened at the Yanbu petrochemical plant in 2004, where, because of the structure’s layout, Saudi security agents were able to quickly cordon the industrial portions of the facility and isolate and neutralize the terrorists. The complex itself was never in danger, although several people were killed.

Another example is the failed al Qaeda attack on the Abqaiq oil processing facility, one of the largest and most important in the world, in February 2006. The terrorists were able to breach the outer perimeter and overrun the guards, but never made it to the operational areas of the plant itself. Beyond the first guard post is a large “no-man’s land,” designed as a moat to protect the functioning elements of the facility. The terrorists were trapped and forced to detonate their car bomb there. Although people tragically lost their lives at the first gate and the exterior portions of the center suffered some damage, at no time was the facility or its ability to process oil under serious threat.

In addition to safeguards and design elements such as multiple barriers and perimeters, thousands of sensors, cameras, sophisticated computers and world-class surveillance and security systems protect the sprawling energy facilities.

It is worth pointing out that the elements most difficult to protect, such as the thousands of miles of pipeline, are also the easiest to repair and quickly get back online. Saudi authorities have estimated that in a worst case scenario — where an entire section of pipeline is destroyed — repair teams could bring the pipeline back to normal operation within days. The key processing points and bottlenecks in the system are, by their centralized nature, much easier to defend.

It is also important to note that even though Abqaiq withstood the 2006 attack, since then the Saudi government has invested more than $10 billion to improve its energy security even further.

A key element of this initiative has been the creation of a 35,000-strong “facilities security force.” These troops come from across the kingdom and receive extensive training through a U.S. technical assistance program. This specialized force, which did not exist before 2005, has the exclusive responsibility of guarding all energy installations against both internal and external threats.

Also, the Saudi government has stockpiled considerable quantities of oil through its Foreign Reserve Initiative. A sizable portion is in floating containment facilities near the kingdom’s main export markets and can be released, if necessary, in emergencies, such as the tsunami in Japan or the civil war in Libya.

Another pillar of the misinformation surrounding the vulnerability of Saudi Arabia’s energy industry posits that the kingdom’s oil resources lay in a region inhabited by a restive Shiite majority.

Setting aside that in decades of Saudi oil production, there have been no serious Shiite attempts to sabotage the kingdom’s oil facilities, it is worth providing some basic facts. Contrary to popular belief, Shiites make up just about 30% of the population of the oil-rich Eastern Province (around 1.1 million out of about 3.9 million), and about half are concentrated in villages in the coastal Governorship of Qatif.

At one time the Eastern Province was predominantly Shiite, but in the past several decades, more than 1.3 million foreign workers and almost 1.5 million Saudis from other parts of the kingdom have migrated there in search of economic opportunities.

None of this is to say that Shiites haven’t faced legitimate grievances: The community lacks full religious freedom, encounters obstacles within the Sunni-dominated legal code, and has suffered economic discrimination for years.

But since assuming the throne in 2005, King Abdullah has taken steps to address these problems, such as ensuring that Shiites receive fair treatment and the same economic and social benefits as the majority Sunnis; increased employment opportunities in the public sector, and equal access to fully paid foreign scholarships.

For these reasons and others, the characterization of the native Shiite community as a “Fifth Column” representing a threat to the kingdom’s oil infrastructure in the Eastern Province is far overblown.

For decades, during times of peace as well as war and turbulence, Saudi Arabia has provided the world with a steady supply of oil to meet the needs of a growing global economy. The kingdom has invested heavily, not only in the security of its energy infrastructure, but also in the development of the largest spare oil production capacity anywhere (more than 3 million barrels per day), to stabilize oil markets during times of crisis.

Since the unrest in Libya began, for instance, Saudi Arabia has increased its production considerably, playing the key role of the world’s energy guarantor of last resort. Thus, while it is healthy to question the security of an asset so vital to us all, it is important to analyze risks based upon the facts.

Many journalists and analysts in the West, however, have resorted to innuendo and sensationalism in the discussion of the security of Saudi Arabia’s oil industry. If this continues, they may find themselves in the same embarrassing position they did after Saudi Arabia’s “Day of Rage,” predicting a crisis that never came to pass. And aside from a few oil traders, no one profits from such irresponsibility.

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This op-ed is reprinted with permission of the author.

Nawaf Obaid is senior fellow at the King Faisal Center for Research and Islamic Studies, Riyadh.

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