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Chapter five

Energy and maritime security

Break-out group

Saturday 9 December 2006, 3.30 pm

CHAIRMANProfessor François Heisbourg

IISS Chairman

OPENING REMARKSVice Admiral David Nichols

Deputy Commander, Central Command, US

Vice Admiral A.K. SinghCommander-in-Chief, Eastern Naval Command, India

Zainul Abidin RasheedSenior Minister of State for Foreign Affairs, Singapore

Remarks made in break-out groups may not be attributed to the individuals who made them. This rule is designed to encourage free discussion.

The break-out group focused on the nature and extent of contemporary threats to

the security of shipping and energy supplies in the Gulf and further afield, and on

the modalities of regional and international collaboration that might mitigate these

threats.

The session heard that irregular challenges from both state and non-state actors had escalated over the last decade and that the threat they posed to shipping, oil and gas installa-tions, and ports was now pervasive. The Pentagon’s 2006 Quadrennial Defense Review, which highlights the strategic context provided by globalisation, provides useful pointers to the evolution of the maritime threat environment over the last decade. The rapid integration of the world’s economies, facilitated by information and communications technolo-gies, means that events in one region now quickly impact on others. Some of the most important ramifications include: transnational terrorism; the proliferation of weapons of mass destruction and advanced technologies; international organised crime (with trafficking in drugs, weapons and people among its manifestations); expanding opportunities for corruption in government and business; licit and illicit migration; demographic changes, including rapid urbanisa-tion; threats to health; and competition for natural resources.

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At the same time, weak, failing and failed states have grown in number and are generating ungoverned spaces on land and at sea. Regional powers show signs of asserting them-selves through asymmetric military capabilities and by sponsoring both state and non-state surrogates. Globalisation is also blurring traditional boundaries between internal and external threats, and is challenging notions of national sov-ereignty, while implying more than ever that security cannot be guaranteed by military means alone. Together, these trends carry serious implications for maritime security. From a US perspective, there is a growing threat from terrorists or what might be called ‘Fourth Generation Warriors’, com-prising loose-knit self-generating action groups with strong ideological convictions which are able to exploit the incapac-ity of weak and failed states in order to attack political and social institutions, infrastructure and civilian populations. Such groups may be able to exploit gaps in the capabili-ties of Western states’ ‘third generation’ armed forces and leverage modern technologies to generate disproportionate effects, both kinetic and non-kinetic, in a chaotic global bat-tlespace that has replaced the relatively ordered battlefields of the past. The seas and littoral zones are likely to constitute important parts of this global battlespace.

Of total international trade, 95% is seaborne. Any substan-tial disruption of maritime trade – effectively the lifeblood of contemporary economies – by these emerging threats could,

There is a growing threat from ‘Fourth Generation Warriors’, loose-knit self-generating action groups with strong ideological convictions

Chapter five. Energy and maritime security | 45

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worldwide, have important social and political as well as economic repercussions. Energy supplies from the Gulf region are particularly vulnerable to disruption by emerging challenges of the types outlined in the 2006 QDR. The break-out group heard that global energy requirements are likely to grow by 50% over the next 25 years, with half of the total demand for oil being from Asia, and particularly from India and China. This growth will occur despite consumer coun-tries’ efforts to mitigate demand through improved energy efficiency and efforts to develop alternative and renewable energy sources. The Gulf, which currently satisfies 40% of global oil and natural gas demand, possesses 75% of proven global oil reserves and 50% of proven gas reserves. Though oil and gas pipelines may eventually connect the Middle East and Asia, ensuring the security of Asia’s seaborne energy imports will remain crucial for the indefinite future. Much attention has focussed on the vulnerability of the key chokepoints: the Strait of Hormuz at the eastern extremity of the Gulf and the Malacca and Singapore Straits in Southeast Asia. Every day, 15.5 million barrels of oil, 40% of the entire global oil trade, pass through the Strait of Hormuz. An esti-mated 11m barrels pass through the Malacca and Singapore Straits daily. During 2006, the first westward transit by a full tanker (from Vladivostok to India) passed through the Malacca Strait. The Strait of Bab Al Mandab at the south-ern end of the Red Sea is also a significant chokepoint, and there are vulnerable ‘high traffic density areas’ on the west coast of India in the Gulf of Kutch, Gulf of Cambay and off Mumbai.

Since the 1980s, there have been tangible threats to the free flow of energy supplies from the Gulf region. During the Iran–Iraq War, there were attacks on oil terminals at both ends of the Gulf while mines, light vessels and anti-ship missiles were used against oil tankers. While such threats could re-emerge in the event of a major regional conflict, the main immediate threat to the security of shipping in the region and in other parts of the world comes from piracy and, in territorial waters, sea-robbery. Waters off the Horn of Africa are among the world’s most dangerous, with violent incidents at sea and hijackings increasingly commonplace. Piracy and sea-robbery also represent serious security chal-lenges in parts of Southeast Asia, but some claims regarding the vulnerability of shipping in the Malacca and Singapore

Vice Admiral A.K. Singh, Commander-in-Chief, Eastern Naval Command, India

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Straits have exaggerated the scale of the challenge. With the exception of Bangladeshi waters, the scale of the problem off South Asia is relatively minor.

Maritime terrorism potentially represents a considerably more serious threat than piracy, and its devastating effects have already been seen in the attacks on the USS Cole in Aden, Yemen, in October 2000 and the MV Limburg offshore Yemen’s Ash Shihr oil terminal in October 2002. One possi-ble terrorist vector of attack might involve collaborating with pirates to hijack ships which could be sunk or exploded in vital waterways or ports with the aim of causing large-scale economic (and, indirectly, social and political) disruption. However, the extent of potential overlap in goals and opera-tional modes between piracy and maritime terrorism remains contentious and there is little agreement over whether ter-rorists or, indeed, governments possess the will or capability to block vital trade routes. Notwithstanding Iran’s inventory of mines and C-802 anti-ship missiles, not to mention its asymmetric small-boat flotilla, there is particular scepticism over Tehran’s intention and ability to close off the Strait of Hormuz in the event of conflict with the United States. Some observers see a danger of shipping being disrupted rather than blocked. However, in an era of ‘just-in-time delivery’, even disruption could make a major impact on the global economy. Others see a negligible threat from states – none of which would gain by interfering with trade – but neverthe-less a tangible threat from non-state actors.

The break-out group heard that states in the Gulf region were already implementing national measures to manage threats to maritime security. However, to deal effectively with the widening array of contemporary maritime security chal-lenges, effective international cooperation involving not only regional states but also extra-regional stakeholders is neces-sary. There is already substantial international cooperation on maritime security in the Gulf and adjacent waters, where three US-led but thoroughly multi-national naval coalition task forces (CTFs) operate in support of Operation Enduring Freedom and Operation Iraqi Freedom with the overall aim of ensuring that vital sea lines of communication remain open and to engender appropriate conditions for legitimate trade and other maritime activity. CTF-152 covers the central and southern Gulf, and CTF-150 operates in the southern Red Sea, the Gulf of Aden, Gulf of Oman, Arabian Sea and north-

Zainul Abidin Rasheed, Senior Minister of State for Foreign Affairs, Singapore

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western Indian Ocean. Meanwhile, at the northern end of the Gulf, the roles of CTF-58 include protecting Iraqi oil platforms. Together, the three task forces comprise 30 US Navy ships and 15 from allies including Australia, Germany, Italy, Japan, the Netherlands and Spain. Altogether, 20 nations have contrib-uted vessels to the three task forces. Pakistan has contributed ships to CTF-150 for more than two years continuously, and during 2006 a Pakistani admiral commanded this task force. The CTFs closely coordinate their activities with the navies, coast guards and marine police forces of regional states. An intensive programme of bilateral exercises also brings coali-tion and regional maritime forces into close contact.

The Group heard claims that the ‘1,000-ship navy’ pro-posed by the US Chief of Naval Operations, Admiral Mike Mullen, based on common strategic interests and given tangi-ble form through coordinated and integrated operations, has begun to take shape in the region, and that the interest of the US and its allies in creating a global maritime operating pic-

Professor François Heisbourg, IISS Chairman; and Vice Admiral David Nichols, Deputy Commander, Central Command, US

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ture – sometimes referred to as ‘maritime domain awareness’ (MDA) – provide visions for intensified future international collaboration for maritime security. However, these notions remain essentially inchoate. Though international maritime data exchange (for example among the US, Japanese and Korean coast guards and the Indian Navy) is becoming more widespread, how information from discrete regional surveil-lance centres might most effectively be integrated remains unclear, as does the question of how to ensure that improved situational awareness is linked to effective arrangements for reaction. For example, hard intelligence is needed to find potential terrorists amongst India’s fishing fleet of more than 300,000 vessels, and it is not apparent how the still-vague notion of MDA might provide such intelligence.

Moreover, experience in Southeast Asia during the current decade points to the value of littoral states, rather than extra-regional powers, taking the initiative to establish regional maritime security mechanisms in conjunction with user states and other stakeholders. Building on navigational safety coop-eration in the Malacca Strait which began during the 1970s, Indonesia, Malaysia and Singapore have intensified their mari-time security cooperation since 2004 with coordinated trilateral sea and maritime air patrols. Simultaneously, despite the dis-comfort that the Pentagon’s proposal for a Regional Maritime Security Initiative caused in 2004, these littoral states recognise that extra-regional user states potentially have useful roles to play in enhancing security in the Strait, as long as they respect the sovereignty of regional states and act in accordance with international law. During 2006, there were significant develop-ments in engagement between littoral and user states in Asia. Most importantly, in September the Regional Cooperation Agreement on Combating Piracy and Armed Robbery Against Ships in Asia (ReCAAP) came into force. ReCAAP involves the ten members of the Association of Southeast Asian Nations (ASEAN), as well as Japan, China, South Korea, India, Bangladesh and Sri Lanka. ReCAAP’s centrepiece is an Information Sharing Centre, established in Singapore in November 2006. Other developments included the second in a series of meetings on the Straits of Malacca and Singapore held in September under the International Maritime Organization’s Protection of Vital Shipping Lanes Initiative, when user states supported the littoral states’ proposal to establish a cooperative mechanism to promote navigational safety and environmen-

Littoral states recognise that extra-regional user states have useful roles to play in enhancing security in the Malacca Strait

tal protection. Thirdly, in July, ASEAN Regional Forum (ARF) ministers endorsed a proposal for an ARF Maritime Security Shore Exercise aimed at enhancing interoperability among the region’s maritime security agencies.

Despite the presence of the Coalition Task Forces and their participating navies’ collaboration with regional states’ maritime forces, the group heard that maritime security in the Gulf was by no means robust in the face of the poten-tially serious incidents that might occur. An important step towards enhanced maritime security in the Gulf might be the establishment of a regional surveillance and information-sharing centre, run by the regional states with support from extra-regional players. A ‘champion’ among the regional states, willing to promote maritime security issues and able to replicate the role played by Singapore in Southeast Asia on such matters since the 1970s, could play a valuable role in galvanising an appropriate regional initiative.

However, reflecting acceptance of the notion that glo-balisation is fundamentally changing the nature of security

Maritime security in the Gulf is by no means robust in the face of potentially serious incidents

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challenges, there was broad consensus in the session that gov-ernments should see maritime security as a global concern, and that inter-regional as well as intra-regional cooperation could contribute usefully to mitigating emerging maritime threats. Crucially, the Gulf states should be concerned not just about maritime security in their immediate region, but also further afield and particularly in Southeast Asia, through which a high proportion of their energy exports pass on the way to China, Japan and Korea. A Japanese government report has revealed that 30% of ships passing through the Straits of Malacca and Singapore had come from, or were heading for, a port in the Gulf. The major Northeast Asian energy-reliant states are already registering their legitimate interests as concerned stakeholders, and there is a clear rationale for the Gulf states to play a significant role in bolstering the security of their energy exports as they pass through Southeast Asian waters. There remains great scope for discussion about how this might best be achieved, but sharing operational experience would be a useful first step.

30% of ships passing through the Straits of Malacca and Singapore had come from, or were heading for, the Gulf

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