Subscribe
Pipeline Magazine

Feature

Danger Zone



By William M. Glenn

It has been a dangerous year. In May, armed militants attacked a major Chevron oil and gas facility off Nigeria’s southern coast, leading to the shutdown of production. Then in March, Islamic militants launched four home-made mortars over the fence of a gas-processing plant in southern Algeria before fleeing into the desert. Last August, a Croatian oil and gas surveyor working in Egypt was snatched from a Cairo highway and beheaded by an Islamic State splinter group.

Over the last 12 months, dozens of other oil or gas pipelines, pumping stations, storage tanks and refineries have been bombed, breached or sabotaged in Libya, Turkey, Syria, Iraq and Yemen.

“The nature of world terrorism has changed dramatically in the last three years, but most Canadian companies are not interested in security until something bad happens,” says Alan Bell, president of Globe Risk International in Toronto. “Then suddenly, they are Born Again. Of course, by that time, it is too late.”

In 1993, following 22 years with the British Special Air Service (SAS), Bell decided to “fill a niche” in the security business by helping oil and gas, mining and other natural-resource operations combat the ever-increasing threat posed by criminal and terrorist groups. Today, he is still working to protect the “nouns” — security-speak for people, places and things — in some “pretty bad places” around the world, including the Middle East, Central and South America and Africa. But Canada’s oil and gas sector is also under threat.

“Islamic State knows the best way to attack us is to destroy our economy. Oil revenues fund much of their own operations around the world, so they are well aware that oil and gas underpins much of the Canadian economy,” Bell says. As a result, every Canadian oil and gas facility — including refineries, storage depots, well heads, pipelines and even head office buildings of an oil company — “must be considered at risk,” he cautions.

HEADING NORTH

Is terrorism on the rise? That depends on the particular brand of terrorism and where it is taking place.

“The year 2015 was the most lethal for terrorist attacks in Western Europe in nearly a decade,” says James Gregory, regional director for Aon Crisis Management in Toronto. Gregory is responsible for the company’s portfolio of terrorism, political risk, kidnap and ransom, and product recall lines of insurance. “That doesn’t mean the highest number of attacks — less than one per cent of all terrorist attacks last year took place in Western Europe or North America — but the greatest number of deaths.”

These attacks are generally linked to, or inspired by, the jihadist group Islamic State (IS), which has overrun large areas of Syria and Iraq. In addition, reports of far-right activism and civil unrest stemming from the European migrant crisis have also increased in several countries. Many attacks are perpetrated by “self-radicalized individuals,” often inspired by extremist ideologies found on Internet websites or social media, according to a paper published in the April issue of the journal Perspectives on Terrorism. Although some may be politically active or religiously inspired, “they are typi
cally doing it ‘off their own bat’, rather than following the instructions of some evil overlord,” Gregory says. “But despite the fact they are operating without support, their attacks are well organized.” The current IS terrorist model seems to favour mass-casualty attacks, typically executed with automatic weapons rather than explosive devices. Given the current level of police and security-agency vigilance, “it has become much harder to source the raw materials needed to fashion homemade bombs these days. It is easier for extremists to obtain automatic weapons and ammunition,” Gregory suggests.

SOFT TARGETS

Terrorists are not targeting infrastructure, power plants or industrial facilities, at least not in the Western world. Instead, they are focusing on “soft” targets — killings that take place in concert halls, sports arenas, restaurants, churches, shopping malls and airport waiting rooms, for example.

“These are people with guns attacking public venues at predictable times when large numbers of people are likely to be present,” Gregory says.

Each year, Aon updates its Terrorism and Political Violence Map, which details risk levels around the world. For the 2016 edition, Aon and its analysts raised the risk ratings for 18 countries — mostly in the Middle East, South Asia (Afghanistan and Pakistan) and Saharan and sub-Saharan Africa — and lowered the ratings for 13 countries, according to a statement that the company issued on April 16.

“That is the first time in three years that the overall net risk rating for global terrorism has increased,” Gregory reports. Despite increasing regional instability worldwide, Canada’s risk rating has remained static for 2016.

Although there have been a number of serious attacks on oil and gas facilities in the Near East and North Africa over the last two years, “we haven’t seen many parallel incidents in North America,” he notes.

But that does not mean attacks on Canadian oil and gas facilities are entirely unknown. A small and largely reclusive farming community of religious fundamentalists sabotaged sour gas wells in Alberta back in the 1990s. The members of the Trickle Creek farm and their leader, Wiebo Ludwig, believed that they were being “poisoned” by hydrogen sulphide gas flared by nearby sour gas wells in the Peace River region. In April 2000, Ludwig was convicted of blowing up one well, vandalizing another and counselling an undercover police officer “to possess an explosive substance.” He was sentenced to 28 months in prison, but continued to proclaim his innocence until his death from esophageal cancer in 2012.

And in 2008 and 2009, several of Encana Corporation’s gas pipelines near Dawson Creek, British Columbia were bombed — attacks that have yet to be solved to this day.

It can take a significant commitment of time, money and resources to blow up an oil or gas pipeline in some remote area. “Today’s terrorist is more likely to burst into head office brandishing an automatic weapon,” Gregory suggests.

ELUSIVE ENEMY

“The terrorism threat level is very fluid, ebbing and flowing in response to the evolving political realities of the last year-and-a-half,” says Professor Michael Zekulin, a lecturer with the Department of Political Sciences at the University of Calgary. He specializes in terrorism, radicalization and security issues.

While academics argue over the definition, “terrorism generally involves violence or the threat of violence,” Prof. Zekulin says. Environmental activists, First Nations and community groups that are hanging banners, staging sit-ins or blocking access roads are, by definition, non-violent and “are not eco-terrorists.”

The mainstream environmental movement focus es on using established political channels — circulating petitions, submitting briefs, holding press conferences — to achieve its aims. “However, more extreme splinter groups, like the Earth Liberation Front (ELF), may break away when a few individuals decide that these legitimate forms of non-violent protest are not getting the job done and decide to up the ante,” Prof. Zekulin explains.

These outliers “represent a very, very, very small number,” Prof. Zekulin adds, “but as we have seen in Brussels and Paris, small groups can cause tremendous chaos.” For example, ELF is responsible for hundreds of attacks across the United States, including some serious arson attacks. Virulent opposition to pipelines that would be used to ship huge volumes of bitumen from Alberta’s oilsands to the west coast of Canada or south to the Gulf of Mexico had threatened to cause such splintering. But the White House has denied the required Presidential Permit for the United States’ portion of TransCanada’s Keystone XL Pipeline Project to the south, while Enbridge’s Northern Gateway Project to the Pacific seems to be delayed indefinitely. “Those developments pretty much negate the need for any kind of additional action,” Prof. Zekulin suggests. “But if either of those projects are ever ‘back on the table’, the risk of domestic terrorism may begin to escalate again.”

PEACEFUL PROTEST

“The environmental movement is committed to peaceful protest, including acts of civil disobedience that may break the law, but always in a peaceful way,” stresses Dr. Keith Stewart, a climate and energy campaigner with Greenpeace Canada in Toronto. “We would never support or condone any action that would pose a risk to the health and safety of oilfield workers. Violence is wrong and incredibly counterproductive,” he adds.

Last spring, while appearing before the federal Standing Committee on Public Safety and National Security regarding Bill C-51, the government’s proposed Anti-terrorism Act, 2015, Dr. Stewart said that “Greenpeace’s mission was forged in non-violent direct action, and we have used it to great effect over 40 years.”

He adds that the group has been instrumental in ending nuclear tests in the South Pacific, as well as scientific and commercial whaling and toxic dumping in the world’s oceans, among other successful campaigns.

“Since its beginning, Greenpeace has pursued an unbroken history of non-violence, even when violence is directed against us.” After an action, Dr. Stewart adds that Greenpeace pays its fines and covers the cost of any unintended damage that may have occurred.

These days, some of that “peaceful confrontation” is directed at oil and gas operations that Greenpeace believes to be at least partly responsible for ongoing climate change. In March 2013, Dr. Stewart and a colleague chained themselves to the main gate of Kinder Morgan’s marine terminal in Burnaby, British Columbia — the terminus of the company’s Trans Mountain pipeline — which carries bitumen from the oilsands of Northern Alberta to the port facility. More than a dozen other Greenpeace protesters unfurled banners and painted slogans on oil storage tanks, occupying the facility from dawn till dusk, until RCMP officers escorted them off the site.

The company is seeking approval to twin its existing pipeline, expand the port facilities and increase the capacity of the system from 300,000 to 890,000 barrels per day. A major project of this scope engenders a lot of strong opinions, and “not everyone will be supportive of our proposed expansion,” says Ali Hounsell, spokesperson for the Trans Mountain Expansion Project in Burnaby. “Our number one concern is for the safety of the public, our employees and our neighbours, as well the security and safety of our operations.”

The company points out that there are many ways for the public to express opposition and opinions in a safe and lawful manner. “We encourage anyone interested in our proposal to engage in a meaningful and constructive dialogue with us,” Hounsell says.

MAKING A STATEMENT

While the risk of eco-terrorism remains largely hypothetical, the depredations of IS radicals are still very real. “International terrorists relish symbolism and favour actions that make a clear and obvious statement,” Prof. Zekulin says. The September 11 attacks, with hijacked planes aimed directly at the United States’ financial hub in New York City, its centre of military might in the Pentagon and the seat of political power in Washington and the White House, were prime examples.

“What could you target in the Canadian oil and gas sector that would make the same kind of bold statement the whole world would understand?” Prof. Zekulin asks. Attacking an isolated oilsands facility located hours and hours north of Edmonton is unlikely to gain international attention.

Prof. Zekulin does not discount the possibility that committed radicals could stay busy “monkey-wrenching” distant pipelines and isolated gas wells, causing nasty little spills and blow-outs with little chance of being caught in the act. “If you had a lot of people who wanted to sabotage oil and gas infrastructure, they would probably be able to,” he says. But with the industry in the economic doldrums already, “it may not be the high-profile economic target it once was.”

While the price of oil may be depressed, Canadian pipeline companies certainly take the risk of sabotage seriously. It is not just a prudent management decision, but a regulatory requirement. Canada’s federal and provincial pipeline-safety regulations require companies to develop, implement and maintain emergencymanagement programs that anticipate the threat of terrorist attacks, among other risks. The requirements for such a program are set out in the CSA Group’s national security-management standard for petroleum and natural-gas industry systems.

“It is through this emergency-management program that companies consider what critical infrastructure assets may be vulnerable to those who may wish to cause harm or disruption to energy flow,” says Patrick Smyth, vice president of safety and engineering with the Canadian Energy Pipeline Association (CEPA) in Calgary. Association members operate 119,000 kilometres of transmission pipeline — much of that through remote regions of the country — shipping 97 per cent of Canada’s natural gas and onshore crude oil production to markets within the country and the United States.

To properly maintain an emergency-management program, “companies continually identify and assess potential hazards,” Smyth notes. “This means that companies must keep their finger on the pulse of security risks and implement additional mitigation as and when required to address that risk.”

To help keep their programs up to date on the latest threats, CEPA and its member companies participate in the Natural Resources Canada Energy and Utilities Sector Network, as well as Public Safety Canada’s Cross Sector Network, where security issues — including physical and cyber-security threats — are discussed.

“There is no ‘one-size-fits-all’ solution when it comes to mitigating security risks,” Smyth says. “Companies will implement the appropriate mitigation, be it administrative or engineering in nature, to sufficiently address the risk” and alleviate the potential for a security breach that can put both a facility and its workers at risk, he adds.

KIDNAPPING — A GROWTH INDUSTRY

The risks faced by Canada’s oil and gas workers rise exponentially when they leave the country’s relatively safe shores. Many of the world’s richest petroleum and mineral reserves tend to be buried in the most politically volatile regions of the world, “places where local governments exert only the most tenuous grasp on the rule of law or are engaged in running battles with rebel and/or terrorist forces,” Prof. Zekulin says. “This is certainly not the geopolitical topography we are used to in Western Canada.”

Raising the risk level are kidnappers who have become more emboldened over the last five years. “They see ransoms as a viable resource stream to be extracted from the local population and, when they are available, from Western workers and tourists,” Prof. Zekulin notes. Western hostages bring richer ransoms and draw greater international attention. “Terrorist groups are very rational and constantly learning new approaches. They see kidnapping working for other groups and ask, ‘Why not us too?’”

Every year, 15,000 to 20,000 terrorist or crime-related kidnappings are reported worldwide, and those numbers are on the rise, according to Crisis Management: Protecting Your People, Assets and Brand, published by Aon plc in 2012. “There are thousands of kidnappings perpetrated around the world that are never reported,” Bell says. “Terrorism, the proliferation of cheap weapons and the globalization of organized crime have made kidnapping one of the most lucrative growth markets in the world, currently worth over $2.5 billion a year.”

Each year, Bell conducts an international security course as part of the Prospectors and Developers Association of Canada trade show and conference, teaching resource companies with overseas operations how to respond to kidnapping and ransom demands and other terrorism-related threats.

“This year, I had 15 top CEOs attend. I have never seen that before,” Bell reveals. “They didn’t send their managers or security staff, but came themselves, listened closely and asked all the right questions.”

Bell says the “first thing you need to know is, you can’t prevent a kidnapping no matter what you do.” If staying home is not an option, Canadian executives and staff working in or visiting high-risk areas can take the following steps to reduce their vulnerability and increase their chances of getting back home safely, should something go wrong:

• Visit the Canadian Government’s “Travel Advice and Advisories” website (http://travel. gc.ca/travelling/advisories) and read the assessment report for one’s destination, which covers security, health and natural-disaster risks, as well as regional advisories for any areas that are experiencing high crime or terrorist attacks.

• Buy kidnap and ransom insurance. Experts say that it is not that expensive to buy a couple of million dollars’ worth of peace of mind in case one is targeted. Do not rely on the government, as Canada’s policy is not to pay ransoms to terrorists for the safe return of kidnapped nationals.

• Establish and maintain good communications links in advance to keep staff informed of one’s travelling plans and itinerary.

• Consider attending a Hostile Environment Awareness Training course on what to expect and how to behave if one has been kidnapped.

LETTING THE GUARD DOWN

Regardless of whether Canadian oil and gas companies rank high on the modern terrorist’s target list or not, these facilities are still vastly undermanned when it comes to security, Bell cautions.

“The Canadian attitude can be summed up in one word — ‘complacency’. Companies have told me that terrorism isn’t an issue, that terrorism happens in other countries.”

Following the 9/11 attacks, every office tower in Toronto had security guards at the front doors checking suitcases and handbags. “That lasted all of three days,” Bell says. “They simply didn’t have the budget or enough trained staff to maintain that level of security 24-7.” The bottom line? It was just too expensive.

Today, too many companies are doing little more than ticking off the boxes on the basic security checklist, according to Bell. They hire local security — often retired police or RCMP officers — install some cameras and buy some insurance.

“I would never hire former law enforcement,” Bell says. “They think they understand security, but they don’t know how to prevent an attack. That has never been part of their job description. They are fundamentally reactive, not proactive.”

Gregory and his colleagues in Aon conduct threat and vulnerability assessments, terrorism risk modelling and “probable maximum-loss studies” to help clients understand and quantify their financial exposures under various scenarios involving terrorist attacks, international or domestic. Based on these assessments, a company can adjust its terrorism insurance coverage based on data-driven analytics, upgrade its security procedures to prevent attacks, work to mitigate potential losses and reduce potential liability in the event an attack. Auditors, many with extensive military experience, assess what a company is doing and what it can do better.

“This is neither an inexpensive nor a simple process,” Gregory explains. A full audit will take weeks of planning and weeks of work, but the results can reduce a company’s risk profile significantly and hopefully, drive down the premiums paid for comprehensive terrorist or business-disruption insurance. Once the audit has been completed and vulnerabilities identified, a client can beef up security, protect its supply chain, guard against business interruption, improve resiliency and protect employees’ health and safety.

“A company has to balance optimal security procedures against what is considered acceptable by its staff, customers and the local community,” Gregory advises. He cites the example that many consumers might object to a full security scan before being allowed to enter a local mall, but they are more likely to regard a similar measure at a nuclear power plant perfectly reasonable.

THE MODERN TERRORIST

Learning how to address the threat posed by the modern breed of leaderless, lone-wolf terrorists effectively remains a learning curve that needs to be scaled. “It is all very decentralized. Such an individual may never come up for air or to the attention of security agencies until they do whatever it is that they plan to do,” Prof. Zekulin says.

For Dr. Paul Joosse, an assistant professor of criminology at the University of Hong Kong, the threat posed by lone wolves pales in comparison to that presented by a well-organized, more capable terrorist group. “The lone wolves are also self-limiting. They are often caught or killed after their attacks.”

Terrorist groups are not waging strategic military campaigns in Western Europe or North America, targeting essential energy infrastructure — at least not yet. “When they attack, they are picking the soft targets that fire people’s imagination and draw on their heartstrings,” he says. “Beheading someone is much more cost-effective in terms of instilling fear and gaining notoriety than trying to destroy an oil or gas plant. I can’t see that being a high-priority target.”

Regardless of whether a self-radicalized individual or an international terror group represents the greater threat, Canada’s oil and gas companies are working closely with federal and provincial agencies to monitor potential risks. There is a lot of security-related discussion back and forth, and companies are certainly aware of world events unfolding on the terror front. The steps they have taken in response and the security protocols they have put in place “are ‘appropriate’ to current terrorism risk levels,” Prof. Zekulin says. “But if somebody really wanted to do something bad, then it would be very difficult to stop them.”

William M. Glenn is a writer in Toronto.

PROTECTING “CRITICAL INFRASTRUCTURE”
The Canadian government recognizes that the risks to the country’s critical infrastructure, including that of the oil and gas sector, are increasingly complex and frequent, according to Mylène Croteau, spokesperson for Public Safety Canada (PSC) in Ottawa. Those risks could be natural or man-made, accidental or intentional, and would include events like the 1998 ice storm, the 9/11 terrorist attacks, the 2003 blackout, the 2003 SARS outbreak, Hurricane Katrina in 2005 and the 2015/16 Islamic State (IS) attacks in Paris and Brussels. Created in 2003, PSC helps coordinate activities among those federal departments and agencies responsible for national security and the safety of Canadians. The responsibility for strengthening the resilience of Canada’s critical infrastructure is shared among federal, provincial and territorial governments, local authorities and the owners and operators of that infrastructure “who bear the primary responsibility for protecting their assets and services,” Croteau explains, adding that the PSC works with its partners to identify threats and vulnerabilities and prepare for all types of disruptions. Public Safety Canada conducts site assessments of critical facilities, including oil refineries, nuclear generating stations, border crossings, stadiums, biotechnology labs and liquefied natural-gas terminals. “We have also established an exercise tool, which helps owners and operators develop and test measures to enhance their resilience against a full range of risks and threats,” Croteau reveals. Under the PSC’s National Strategy for Critical Infrastructure, ten critical infrastructure sector networks have been established, with Natural Resources Canada leading the Energy and Utilities sector network. Each network provides “a standing forum for discussion and information sharing among sector-specific industry stakeholders and governments,” according to Croteau.