Oil is one of the most important energy sources on the planet. It is the main source of energy for transportation. It is an important input to industrial processes, heating, electricity production, and more. There are tens of thousands of products that are produced with oil or oil-based inputs. Agriculture often depends on oil-based products for many aspects of its production supply chains, for fertilizer and pesticide production, and for the sowing, harvesting and processing of agricultural goods. With the advent of shale fracking and other unconventional methods of getting oil out of the ground it is clear oil will be with us as an important energy source and industrial and agricultural input for a long time to come. Natural gas may become a bridge fuel. Alternative and renewable energies are becoming more important and rather quickly. The electric car may be an increasingly important part of transportation, but likely not in the lesser developed parts of the world. Natural gas transport via CNG and LNG may also find significant growth in the future. There will be chances to replace oil in some industrial and other processes, but none of these changes will happen quickly and they will likely be far from complete replacements for oil in the lifetimes of the people reading this article. Oil will remain a paramount fuel in most countries on the planet for many years to come.
A complex infrastructure to be protected
The massive and incredibly complex infrastructure needed to make the oil business work is truly amazing. If we were to replace all of this today from scratch it would cost so much we would likely not do it. It would make no sense economically. However, we have it now, and we need to protect it in order to make sure many national economies and the world economy continue to work properly. There are some oil facilities that are more vital than others to make this system work. I will name a very few to wet the risk appetite of some of the readers, but there are others out there. I implore the readers to look into these others and their importance - and to consider how important it is to protect them. The Ab Qaiq facility in Saudi Arabia comes to mind. Ab Qaiq is considered by some to be the ''Achilles Heel'' of the world economy. It has collectively the most important sweetening and GOSPs (gas oil separating plants) in the world. 6-7 million barrels a day comes from massive oil fields in Saudi Arabia, such as Ghawar, which is about the size of the state of Pennsylvania in the US and deeply filled with oil, to be processed in Ab Qaiq. Think of what would happen to the world if even 2 million barrels of this oil were taken off line due to an attack. Now think about 6-7 million barrels a day were taken off the market with a significant attack on Ab Qaiq. Much of the oil that is processed in Ab Qaiq goes on to vital refinery and export facilities in Saudi Arabia, such as at Ras Tanura. Now think of the nightmare of a major attack on Ab Qaiq and Ras Tanura the same time. Al Qaeda got inside the first fence of Ab Qaiq just a few years ago.
A risk that must be adequately averted
The Saudis beefed up their oil protection force soon after. Others are also keeping a close look at this and other facilities in the Gulf area. Protecting such facilities is not just vital for Saudi Arabia. It is vital for the world economy. A major terror attack or cyberattack on this facility could send oil prices through the roof and oil availability down the sink. Houston Port and the Houston Ship Channel also comes to mind. Houston is the most important linchpin in the oil infrastructure for the US in many ways. It produces about 27% of the gasoline in the US, and about 60% of the aviation fuel for the country. Its refineries are connected to some of the most important pipelines in the country, such as the Colonial Pipeline that brings refined products from the Houston area and other important refinery locations in the South along the Southeast of the country and up the East Coast to importance cities and industrial areas, and airports, along the way. Houston is also a source for a large amount of refined products that go to Mexico, Venezuela and other countries. Mexico and Venezuela export crude oil to Houston. Houston refines the crude imported form these countries and sends it back to them as gasoline, diesel, etc. Much of our likely growing crude exports will come out of Houston. Houston is one of the most important oil ports in the world. The Houston Ship Channel is effectively a very thin river that has a massive refinery and oil storage infrastructure along its banks just above sea level and very compactly distributed in a fairly small geographical area. It is truly terrifying to think of what might happen in such a place. The Houston Port Authority, the City of Houston, The State of Texas, The Coast Guard, various police forces and others have the place protected with multiple layers of first responders and others. This is a constant effort by some of the best in the protection and surveillance business. Yet the potential threats are real. One can hope that these great people working to protect the port, the ship channel and their associated infrastructures and industries continue with their successes.
A risk that must be adequately averted
There are not that many major oil ports in the world. Focusing on the major oil exporting ports is one way of looking at this. Another is to also look at the major oil importing ports. Both types of ports are vital for the workings of many economies and societies. There are not that many super tankers or even product tankers, Aframax or Panamax tankers. All of these ports and ships are vulnerable not only to physical attack, but also cyberattacks – or even a combination of those. Ports, pipelines and even tankers are informationally intensive and use computer systems to make sure they are operated properly and safely. A devastating cyberattack on any of these could have the potential to wreak considerable havoc on local, national, and even international oil markets. Cyberattacks can also end up being physical attacks if the operating system of the pipelines, ports, refineries and the like are taken over by nefarious software controlled by terrorists or others. This is not the world of science fiction anymore. Many of the operators, owners and investors in these facilities are quite concerned about what might happen. We should all be. We can also extend the potential threats to the electricity and water systems attached to these major oil facilities and ports. Water is vital for the oil industry. Electricity is also vital for the oil industry. If we are going to look into potential cyber and physical threats to the oil industry we also have to look at the other systems attached to the oil industry, such as water, electricity, finance, communications, governance and more. Energy systems are systems within systems nested in systems and linked to other systems. So threats to one could affect many others and have second, third and fourth order effects that could go through an economy and a society like a series of lightning bolts.
We cannot afford to make mistakes
A lot is being done to protect our oil facilities, tankers and connected infrastructure. However, a lot more is needed to be done – a lot more. Oil is too vital to the world for us to be content with what seems to be good protection, observation, monitoring and so forth. All it will take is one effective attack and we will all then know how very important oil is. Calling for greater protection also has a derivative call: for further energy diversification and decentralization in many areas. Massively centralized major national, regional and global oil facilities and related infrastructure may fit into the argument for economies of scale - until something happens. After a series of attacks or even one big attack the benefits of the economies of diversification will increase. Let’s hope we figure out better ways of doing things before something really stunning happens to the industry, and to the economies and societies that rely so much on it. One really does not know the value of something until one does not have that thing. Oil is a very good example of this.