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Smalley on the Energy Stump

Oil Terror

Three workers at a major Saudi refinery in Yanbu used their passes to access the complex and then gun down five Western engineers yesterday. ExxonMobil is a joint-venture partner in this refinery with Saudi Aramco.

(Also this. And from the English-language Arab News. Background on Yanbu.)

Shouting "God is Greatest" the gunmen killed two Americans, two Britons and an Australian working for the Swiss-based ABB Lummus in the Red Sea city, the first attack on an oil facility in the world's largest oil exporter.

There were reports a sixth man was shot near a hotel and his body dragged through the town.

Other Westerners apparently were targeted and killed in the rampage.

Combined with the attack on the Basra oil terminal, this slaughter at Yanbu made the possibility of broader, more devastating attacks on the oil infrastructure in the Middle East more real to many in the industry.

There’s more.

This incident also comes shortly week after heavily armed militants killed seven people, including two Americans working for ChevronTexaco in a river attack in Nigeria. An uprising in Nigeria last year briefly shut down production.

Last year's uprising killed hundreds of people and forced oil companies to temporarily close their two million barrels per day production in the region.

Ten per cent of the production is still closed, although foreign operators including California-based Chevron Texaco had been cautiously returning to looted and destroyed flow stations under the protection of the Nigerian military.

The Daily Star argues that the potential for a disastrous hit on oil infrastructure is higher in the Middle East.

But West Africa, seen by many as the most promising source for major oil, also faces an influx of terrorist organizations.

The best way to defend against this is to reduce our dependency on oil. And while we are the major oil consumer of the planet, China is accelerating its demand as is India. Because China still has something of a blank slate when it comes to individual mobility, it may be in a better position to deploy a hydrogen platform when that becomes more viable. (Very similar to developing countries rapildy deploying a wireless telecommunications infrastructure -- why spend all that money and time putting old technology into the ground?)

It is in all our interests for a global push in that direction. I think this will be very difficult to accomplish at the governmental level -- look at the thrashing that has gone into the Kyoto protocol and any coordinated activity on climate change. We need funding support for basic research, but we need entreprenurial frenzy and heated consumer demand.


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