Maritime Security: Federal Efforts Needed to Address Challenges in Preventing and Responding to Terrorist Attacks on Energy Commodity Tankers
Released: 2008-01-09T00:00:00

Letter

Background

Many Stakeholders Are Involved in Securing the Maritime Energy Supply Chain

Numerous international and domestic organizations play a role in the security of maritime energy commodities. The list of stakeholders outside the United States is quite diverse. They include international organizations, governments of nations where tankers load or where tankers are registered, and owners and operators of tankers or facilities (see table 1).

On the domestic side, the U.S. Coast Guard is the lead federal agency and is responsible for a wide array of maritime safety and security activities. Other U.S. government agencies support the Coast Guard’s maritime security mission by addressing a wide range of issues that affect the flow of cargo and people into the United States. State and local governments and the private sector also have responsibilities to secure domestic ports. Table 2 lists key federal agencies and other stakeholders on the domestic side, together with examples of the kinds of maritime security activities performed.

All of these international and domestic stakeholders help to ensure the safety and security of a global supply chain that brings energy commodities to the United States. This supply chain spans the globe and reaches many regions of the world. Each day, the United States imports many different energy commodities from overseas suppliers in Africa, Europe, the Middle East, and North and South America. Excluding Canada, which supplies petroleum and natural gas to the United States via pipeline, the vast majority of these varied imports arrive by tanker.

Tankers Transport Energy Commodities around the World

The various types of energy commodities require different handling methods, and as a result, various kinds of tankers have been built to accommodate them. An LNG carrier is designed for transporting LNG at minus 260 degrees Fahrenheit, when gas liquefies and shrinks drastically in volume. The cargo is transported in special tanks insulated to minimize evaporation. LNG carriers are up to 1,000 feet long and have a draft (depth below the water line) of 40 feet when fully loaded. The global LNG fleet is expected to double from 200 in 2006 to over 400 by 2010. According to industry reports, the existing fleet has completed more than 33,000 voyages without a substantial spill. Oil tankers are more numerous and vary greatly in size. Tankers transporting crude oil from the Middle East generally consist of Very Large Crude Carriers, which typically carry more than 2 million barrels of oil per voyage. These ships are over 1,000 feet long, nearly 200 feet wide, and have a draft of over 65 feet. Figure 1 shows a typical Very Large Crude Carrier. These ships are too big for most U.S. ports and must transfer their loads to smaller tankers (a process called lightering) or unload at an offshore terminal. At present, the United States has only one such offshore terminal—the Louisiana Offshore Oil Port (LOOP). Most tankers transporting cargos from the Caribbean and South America, by contrast, are smaller than Very Large Crude Carriers and can enter U.S. ports directly.

There are generally two enforcement systems aimed at ensuring that these vessels are in compliance with applicable regulations, laws, and conventions: flag state control and port state control. The flag state is the country in which the vessel is registered. Flag state control can extend anywhere in the world where the vessel operates. For example, a flag state’s requirements set the standards for the operation and maintenance of all vessels flying that flag. If the flag state is a contracting government to the SOLAS Convention, these standards are required to be at least as stringent as those included in the ISPS Code. The port state is the country where the port is located. Port state control is the process by which a nation exercises its authority over foreign-flagged vessels operating in waters subject to its jurisdiction. It is intended to ensure that vessels comply with all domestic requirements for ensuring safety of the port, environment, and personnel. Thus, when a foreign-flagged oil tanker enters a U.S. port, the U.S. port state control program, administered by the U.S. Coast Guard, becomes the primary means of marine safety enforcement. For example, the Oil Pollution Act of 1990 requires that all tankers built after 1994 coming to the United States must have double hulls—that is, a two-layered hull to help prevent spills resulting from a collision or grounding (see fig. 2).

Energy Commodities Originate in a Variety of Locations

According to the Energy Information Administration, the United States consumes more than 20 million barrels of petroleum every day. Of that amount, over 65 percent comes from foreign sources. The top suppliers of crude oil and petroleum products to the United States in 2005 were Canada, Mexico, Saudi Arabia, Venezuela, and Nigeria—each supplying over 1 million barrels of petroleum per day (see fig. 3). Iraq, Algeria, Angola, Russia, and the United Kingdom are also major energy suppliers with daily imports to the United States of up to 500,000 barrels per day. These top 10 energy suppliers accounted for approximately 75 percent of all U.S. petroleum imports in 2005. All petroleum imports to the United States from those countries arrive on tankers, except those from Canada.

Imports are a growing portion of the natural gas supply in the United States. With consumption of natural gas growing faster than domestic production, imports of natural gas will almost certainly continue to rise, according to the Energy Information Administration. Today, Canada is the primary supplier of natural gas to the United States and all of natural gas imports from Canada are carried by pipeline. Approximately 3 percent of all natural gas imports to the United States is LNG. Trinidad and Tobago is the single largest supplier of LNG to the United States, supplying 70 percent of all LNG imported into this country (see fig. 4). Other LNG suppliers in 2005 included Algeria, Egypt, Malaysia, Nigeria, Qatar, and Oman.

Key Domestic Ports Handle Vast Majority of Energy Imports

The United States imports about 65 percent of its crude oil and petroleum products as well as about 3 percent of its natural gas needs. As shown in figure 5, certain energy commodities are imported into particular regions of the country. Appendix II provides detailed descriptions of U.S. energy commodity imports transported by tanker. For example, in 2004: Ports along the Gulf Coast imported 62 percent of the crude oil imported to the United States.

Ports along the East Coast imported 95 percent of the gasoline and 75 percent of the LNG.

Ports along the West Coast imported 60 percent of all jet fuel.

Characteristics of Maritime Supply Chain Make It Vulnerable to Terrorist Attack

The global maritime environment through which the energy supply chain operates is constrained by physical geography and influenced by regional political dynamics. The physical geography of the continents, for example, forces shipping lanes to pass through certain narrow channels, or chokepoints. There are approximately 200 such locations, but only a handful are of strategic importance for the global energy supply (see fig. 6). A chokepoint by definition tends to be shallow and narrow, resulting in impaired navigation and congestion from other tankers, cargo ships, and other smaller vessels, which can impede the free and efficient flow of goods. Moreover, several key chokepoints are surrounded by more than one sovereign nation, resulting in a complex security environment within a constrained physical space. Managing security in this environment requires significant coordination among these countries to successfully manage the security in these locations. According to the Energy Information Administration, chokepoints are susceptible to pirate attacks and shipping accidents in their narrow channels. In addition, chokepoints can be blocked, mined, or rendered inaccessible by foreign naval forces, with potentially devastating consequences for the flow of oil and goods around the world and into the United States.

The Straits of Hormuz and Malacca are two critical maritime shipping chokepoints that tankers pass through regularly. The Strait of Hormuz, which connects the oil fields of the Persian Gulf with the Gulf of Oman and the Indian Ocean, is the most important chokepoint in the world in terms of the global energy supply, with about 20 percent of the world oil supply, including 17 percent of U.S. petroleum imports passing through it. Tankers with oil from the Persian Gulf must navigate through this chokepoint in order to access the principal international shipping lanes toward the United States. Another chokepoint, the Strait of Malacca, links the Andaman Sea and the Indian Ocean (and oil coming from the Middle East) with the South China Sea and the Pacific Ocean (and major consuming markets in Asia). The Strait of Malacca is located among Malaysia, Indonesia, and Singapore and about 600 vessels pass through it each day. Piracy and political instability in the region, especially in Indonesia, are issues of concern for shipping operations in the strait. The Energy Information Administration identified other important maritime chokepoints, including the Bab el-Mandab passage from the Arabian Sea, the Panama Canal connecting the Pacific and Atlantic Oceans, the Suez Canal connecting the Red Sea to the Mediterranean Sea, and the Bosporus Straits linking the Black Sea to the Mediterranean Sea.

Besides facing vulnerabilities while in transit, vessels can be vulnerable while moored at facilities where they are receiving or unloading their cargoes, and the energy-related infrastructure located in ports can also be vulnerable to attack. Vessels transiting into and out of ports and their attendant infrastructure can be vulnerable in a number of ways. During transit into and out of port, these vessels travel slowly, which increases their exposure. Tankers follow timetables that are easy to track in advance and they follow a fixed set of maritime routes. Once tankers arrive in this country, they must wait offshore for pilots to navigate the ship channels into many of the nation’s ports.

Since the terrorist attacks of September 11, increased national attention has been focused on the potential vulnerability of the nation’s 361 major seaports to terrorist attack. According to the National Strategy for Maritime Security, the infrastructure and systems that span the maritime domain have increasingly become both targets of and potential conveyances for dangerous and illicit activities. GAO has previously reported that ports are vulnerable because they are sprawling, interwoven with complex transportation networks, close to crowded metropolitan areas, and easily accessible. Ports and their maritime approaches, including waterways and coastal areas, facilitate freedom of movement and the flow of goods while allowing people, cargo, and vessels to transit with relative anonymity. Some energy terminals are located in open seas where they are accessible by water or air, while others are located in metropolitan areas, along key shipping channels, or near pristine environmental sanctuaries where they may be accessible by water, air, or land.

Addressing Tanker Security Vulnerabilities Involves Setting Risks in the Context of Other Security and Nonsecurity Priorities

In the wake of the terrorist attacks of September 11, 2001, there was widespread acknowledgement that numerous and substantial gaps existed in homeland security. There is also widespread acknowledgment, however, that resources for closing these gaps are limited and must compete with other national priorities. It is improbable that any security framework can successfully anticipate and thwart every type of potential terrorist threat that highly motivated, well-skilled, and adequately funded terrorist groups could perpetrate. While security efforts clearly matter, various groups like the 9/11 Commission have emphasized that total security cannot be bought no matter how much is spent on it. In short, the nation cannot afford to protect everything against all threats, even within the relatively narrow context of tanker security. Choices are clearly involved—including decisions about the relative vulnerability posed by attacks on energy commodity tankers as compared with attacks in other forms, such as air safety or security in crowded urban centers.

In this context, risk management has become a widely endorsed strategy for helping policymakers make decisions about allocating finite resources in such circumstances. It emphasizes the importance of assigning available resources to address the greatest risks, along with selecting those strategies that make the most efficient and effective use of resources. Risk management has received widespread support from Congress, the President, and the Secretary of Homeland Security as a tool that can help set priorities and inform decisions about mitigating risks.

Energy Commodity Shipments Face Varied Threats, and a Successful Attack Could Have Substantial Consequences

Even though intelligence sources have reported that there are currently no specific credible threats to energy tankers in U.S. waters or their attendant facilities on U.S. soil, attacks overseas show that tankers face several major types of threats, and if a threat were to be successfully carried out domestically, it could have serious consequences. Overseas, terrorists have demonstrated the ability to carry out at least three types of threats. First, and of greatest concern, according to officials we spoke with, is a suicide attack against a tanker or attendant facility. Second is a standoff missile attack using a rocket or some other weapon launched from a distance. Third is an armed assault by terrorists or armed bands while a tanker is moored or in transit. There are additional types of threats, including internal crew conspiracies and collisions with a vessel piloted by terrorists. While attacks have so far occurred only overseas, two Coast Guard admirals testified before Congress that malicious maritime incursions into U.S. waters, such as immigrant or drug smuggling, occur regularly. If an attack on a commodity tanker were successful in U.S. waters or while docked at a U.S. unloading facility, substantial public safety, environmental, and economic consequences could result. Public safety and environmental consequences of an attack vary by commodity. For instance, LNG and LPG are highly combustible and pose a risk to public safety of fire or—in a more unlikely scenario in which they are in a confined space—explosion. The environmental impact, however, of LNG and LPG spills would be minimal since they dissipate in a short period of time. Crude oil and heavy petroleum products remain in the environment after they are spilled and must be removed, potentially causing significant environmental damage. Potential economic consequences of an attack include psychological market responses as well as significant delays and possible shortages if major transit routes, key facilities, or ports are closed.

No Credible Specific Threat of Attack at U.S. Ports to Date, but Events Overseas Indicate Reasons for Concern

According to U.S. government intelligence sources, there have been no specific credible terrorist threats to tankers in U.S. waters or their unloading facilities on U.S. soil in the wake of the September 11 attacks. Nonetheless, several events overseas and intelligence reports indicate ongoing concern about the potential for an attack against tankers or energy facilities.

Heightened security threat levels in response to potential threats. The Coast Guard has raised the Maritime Security (MARSEC) level from Level 1 to Level 2 on several occasions in response to nonspecific threats based on intelligence or other warnings to the maritime sector. In the past, the Coast Guard has raised the MARSEC level due to general threats.

Other intelligence indicating ports are targets under consideration. Security officials in the U.S. government are concerned about the possibility of a terrorist attack in a U.S. port in the future. For example, captured terrorist training manuals cite seaports as targets and instruct trainees to use covert means to obtain surveillance information for use in attack planning. Terrorist leaders have also stated their intent to attack infrastructure targets within the United States, including seaports, in an effort to cause physical and economic damage, and inflict mass casualties.

Continued policy priority for port security. Four years after passage of the Maritime Transportation Security Act of 2002, Congress remained sufficiently concerned about maritime security to again increase security efforts under the Security and Accountability Act for Every (SAFE) Port Act of 2006. This law (1) required the Department of Homeland Security to conduct terrorist watch list checks of newly hired port employees, (2) provided authority for risk-based funding through security grants to harden U.S. ports against terrorist attacks and enhance capabilities to respond to attacks and resume operations, and (3) required the Department of Homeland Security to develop protocols for resuming trade after a transportation security incident.

Officials Are Concerned about Three Primary Types of Threats

Our discussions with officials of various agencies and our review of reports and other published documentation indicate that the following three types of attacks on tankers or attendant facilities are considered to be the most likely.

Suicide Attacks

In the maritime domain, suicide attacks have been carried out using a small, explosive-laden boat or vehicle that the attacker rams into a tanker or energy facility. The intent of such an attack is maximum damage to human or physical targets without concern for the life of the attacker. Previous attack history underscores terrorist intentions and capability to use small boat attacks. Moreover, intelligence experts say that the suicide boat attack uses a proven, simple strategy that has caused significant loss of life and significant damage to commercial and military vessels.

Several suicide attacks have been carried out against tankers and energy infrastructure in the Persian Gulf region. They have taken place in restricted waterways where a ship’s ability to maneuver or engage the attackers is hampered or when a ship has stopped or moored. For example: In April 2004 terrorists attacked the Al-Basrah and Khawr Al’Amaya offshore oil terminals in Iraq using vessels packed with explosives. Several oil tankers were either docked at or in the vicinity of the offshore terminals during the attack. Even though the speedboats detonated prematurely and missed striking the oil tankers and the offshore terminals, another small craft near the Khawr Al’Amaya terminal exploded when coalition forces attempted to intercept it, killing two U.S. Navy sailors and a U.S. Coast Guardsman. According to a recent study on maritime terrorism, the coordinated attack appears to have been part of an overall terrorist strategy to destabilize Iraq, and both terminals were shut down for 2 days, resulting in lost revenue of nearly $40 million.

Another suicide attack occurred in October 2002 when terrorists rammed the French supertanker Limburg as it slowed for a pilot to approach the Ash Shihr Terminal off the coast of Yemen. (See fig. 7.) The resulting explosion breached the Limburg’s double hull and ignited stored oil on board the vessel. An estimated 90,000 barrels of oil were spilled, 1 crewman was killed, and 17 were injured.

In addition to maritime suicide attacks, terrorists have also targeted energy facilities on land. In February 2006, for example, terrorists attempted to drive vehicles packed with explosives through the gates of a major oil-processing facility in Saudi Arabia’s eastern province. Al Qaeda claimed responsibility for the attack, which killed two Saudi guards and represented the first direct assault on a Saudi oil production facility.

A second type of threat against tankers and attendant maritime infrastructure is a standoff missile attack using a rocket, mortar, or rocket- propelled grenade launched from a sufficient distance to evade defensive fire. Standoff missile attacks have been aimed at military ships in ports in the Persian Gulf, but these kinds of attacks also represent a serious type of threat against tankers. Terrorists launched such an attack using Katyusha rockets in 2005, narrowly missing two U.S. naval ships moored at a Jordanian port. Compared to suicide attacks, standoff attacks are easier to execute, but are less likely to be as effective, according to intelligence experts. The range, size, and accuracy of explosive projectiles used in such an attack could vary considerably.

Armed Assaults

Armed assaults, particularly at critical shipping chokepoints, represent a third major type of threat to tankers along the energy supply chain, according to the International Maritime Bureau. These attacks on tankers and energy infrastructure have taken place where maritime security is lacking and they have been carried out in most cases by pirates seeking to gain control of the ship for financial gain, including petty theft and kidnapping of crew for ransom. Pirate attacks against tankers and cargo ships have taken place in numerous locations, including off the coast of Somalia, in the Gulf of Guinea and Persian Gulf, and along the Strait of Malacca. According to officials at the International Maritime Bureau, oil tankers account for about one-quarter of all pirate attacks. Pirate groups armed with automatic weapons have seized tankers in the Strait of Malacca and off the coast of Somalia. For example, in March 2006 pirates armed with automatic weapons hijacked a tanker off the coast of Somalia and demanded ransom payments for the release of the ship and its crew. Also, attacks on offshore oil facilities have become commonplace in Nigeria, where local rebel groups claim to be fighting the Nigerian government over control of oil revenue. While no attacks on international oil tankers off the coast of Nigeria have occurred to date, militant groups in the area have threatened to escalate the conflict by attacking ships.

Other Types of Threats Are Considered Less Likely

There are other types of threats besides the three above, but assessments we reviewed and officials we met with indicated these other scenarios were less likely to occur. Two examples cited were the following: Crew conspiracies. Coast Guard intelligence reports suggest a hypothetical possibility that crew members (or persons posing as crew members) could conspire to commandeer a tanker with the intent of using the vessel as a weapon or disrupting maritime commerce. Vessel operators and industry groups do not consider this to be a serious threat, especially given the technical complexity of modern gas carriers and large oil tankers and the extensive vetting process for crew on these kinds of vessels. Crew conspiracy could also result in situations where oil tankers or gas carriers could be used to transport terrorists. Intelligence officials estimate that the number of overall stowaways on all vessels entering U.S. ports was expected to average 30 per month in 2005. There have been cases of stowaways with suspected terrorist connections on board U.S.-bound vessels since 2000.

Collisions. One scenario related to armed assaults involves pirates or terrorists hijacking a large ship and ramming it into a tanker, an energy facility, or critical infrastructure such as a bridge. Although such scenarios require gaining control of a ship, terrorists’ successful takeover of aircraft in the September 11 attacks demonstrate that such plans could be feasible. To date, there have been no known cases of terrorists intentionally using a vessel as a weapon, but there have been some close calls in pirate-prone areas. Security experts point to an example in 2003 in which a group of pirates gained control of the chemical tanker Dewi Madrim in the Strait of Malacca. Once at the tanker’s helm, the pirates altered the ship’s speed, disabled communications, and steered the ship for over 1 hour before escaping with equipment and technical documents.

Intelligence Reviews Indicate Threats Are Likely to Persist

Reports we reviewed and assessments we received indicate that the threat of seaborne terrorist attack on maritime energy tankers and infrastructure is likely to persist. The information we reviewed and discussions we had with agency officials indicate the greatest degree of concern remains overseas. For example, in October 2006 it was reported that there were threats against Saudi Arabia’s Ras Tanura oil terminal, which is the world’s biggest offshore oil facility, as well as a refinery in Bahrain. As part of its mission in the area, the U.S. Navy, together with coalition forces, continues to patrol areas containing critical maritime energy infrastructure to ensure their security, and works with regional navies in the Persian Gulf to improve their ability to enforce maritime security. In addition, Coast Guard maritime threat assessments we reviewed consider the threat of terrorists attacking vessels outside U.S. territorial waters to be significant. According to these reports, future maritime terrorist attacks are most likely to occur in the Persian Gulf, Red Sea, Mediterranean Sea, and Southeast Asia.

Domestically, intelligence reports and other assessments continue to disclose incidents that demonstrate the need for continued concern about potential terrorist threats. For example, two Coast Guard admirals testified that the nation is subject to an estimated four malicious maritime incursions around the country each week. These incursions represent opportunities to infiltrate homeland security and could cause widespread human, economic, and environmental damage in our nation’s maritime points of entry. Most of these incursions to date have involved vessels bringing illegal immigrants, drugs, or other contraband into the country.

Possible Consequences of an Attack Include Public Safety, Environmental, and Economic Impacts

A successful attack on an energy commodity tanker could have substantial public safety, environmental, and economic consequences. Public safety and environmental consequences vary by commodity. LNG and LPG are highly combustible and pose a risk to public safety of fire and explosions, but their environmental impact would be minimal since they dissipate in a short period of time. Crude oil and heavy petroleum products do not dissipate quickly and must be removed from the water, posing a greater environmental than public safety risk. Economic consequences of an attack could be substantial, not so much because of the loss of a tanker or its cargo, but because of the greater shock to the economy, particularly if major transit routes, key facilities, or ports are closed. Price spikes that reflect fears or expectations about the price and supply of energy commodities could also be significant.

Public Safety and Environmental Consequences Vary by Commodity

LNG and LPG spills pose primarily a public safety hazard to structures and people because of the potential for fires and explosions. These gaseous energy commodities are transported as liquids either by cooling or by pressurizing the gas. If spilled, they will return to their gaseous state, causing vapor to form above the spill. It is these vapors that will burn. Further, the vapors will drift away from the site of the spill if not immediately ignited by a source such as an open flame or strong static charge. Once ignited, the fire will travel back through the vapors toward the initial spill site and, if fuel remains, continue to burn near the tanker.

One of the key elements of how a fire will affect the public is the amount of heat that is radiated away from the fire. The amount of heat radiated away from a fire is related to how smoky the fire burns—fires with a great deal of smoke radiate much less heat because the dark smoke absorbs the radiation. LNG and LPG vapor fires burn very cleanly, with little smoke, and thus emit more heat than light petroleum product or crude oil fires.

Besides the danger of fire, there is also a danger of explosions if LNG or LPG vapors are ignited in a confined area, such as under a dock. If the attack on a tanker occurred in a congested port area, an explosion could damage infrastructure or harm people located nearby. In addition to potential explosions of confined vapors, a particular type of explosion— called a boiling-liquid-expanding-vapor explosion—can occur on tankers that carry pressurized cargoes, such as some LPG tankers. In these tankers, the individual tanks carrying the LPG may rupture violently if they are compromised by heat or explosion. Since LNG is not transported in pressurized tanks, this type of explosion is not likely to occur.

Finally, people who come in contact with spilled refrigerated liquefied gases could be burned due to the cryogenic (freeze) nature of the liquid. LNG and LPG are both transported internationally in refrigerated tankers that keep the gas so cold that it retains a liquid form. A spill of either LNG or LPG could expose people close to the spill to the cold liquid and cause cryogenic burns or frostbite. This is not likely to affect the public, but could affect the crew on the tanker or other people located close to the tanker.

LNG and LPG spills pose little threat to the environment because they almost entirely vaporize in a matter of minutes or hours and disperse into the atmosphere. If an LNG or LPG spill were ignited, there could be localized impacts on wildlife near the fire, but few other environmental effects.

Spills of light petroleum products, such as gasoline, diesel, and jet fuel, can have both public safety and environmental consequences. Light petroleum products produce flammable vapors when they are spilled. These vapors can be ignited and could result in large, damaging fires. Further, the vapors could drift away from the site of the spill if not immediately ignited by a source such as an open flame or strong static charge. Once ignited, the fire will travel back through the vapors toward the initial spill site and, if fuel remains, continue to burn near the tanker. Besides the danger of fire, there is also a danger of explosions if light petroleum product vapors are ignited in a confined area, such as under a dock. If the attack on a tanker occurred in a congested port area, an explosion could damage infrastructure or harm people located nearby.

Spills of light petroleum products have varying environmental impacts, depending on conditions. Light petroleum products evaporate—almost all of the spill can evaporate in a few hours or up to a day. Consequently, light petroleum products generally do not persist in the environment for long unless the spill is churned by significant wave action. In that case, such products can mix with water and will linger in the environment for much longer periods of time. A 1996 spill highlighted the damage that can occur when a light distillate oil is spilled in heavy wave conditions, resulting in much of the oil mixing with water rather than evaporating. In this case, a tank barge carrying home heating oil was grounded in the middle of a storm near Point Judith, Rhode Island, spilling approximately 20,000 barrels of heating oil. An estimated 80 percent of the release was mixed into the water, with only about 12 percent evaporating and about 10 percent staying on the surface of the water. The spill affected animals and plants living on the sea bed, with an estimated mortality of 9 million lobsters, 19.4 million clams, 7.6 million rock and hermit crabs, and 4.2 million fish. The oil spill resulted in a fishing closure for about 250 square miles in Block Island Sound for a period of 5 months.

Spills of crude oil and heavy petroleum products could result in significant environmental consequences. Since these types of spills do not readily evaporate, they can linger in the environment. Environmental cleanup of crude oil and heavy petroleum product spills can take several years and in some cases cost billions of dollars. According to ExxonMobil, the company spent $2.2 billion on the Exxon Valdez cleanup. Crude oil and heavy petroleum products can mix with water, particularly in the presence of waves, causing small drops of water to be trapped inside the spilled oil. This is called an emulsion and can hamper cleanup by making the spilled oil difficult to skim off the water. This will greatly increase the volume of the spill, since the water trapped within the oil also has to be removed. In addition, residual oils are sometimes more dense than water, allowing them to sink and contaminate bottom sediments. Finally, crude oil and heavy petroleum products can coat birds and marine mammals, both smothering the organisms and exposing them to them to hypothermia as their feathers and fur lose the ability to insulate.

While crude oil and heavy petroleum products evaporate, they produce few flammable vapors. For instance, less than half of a crude oil spill and 10 percent of heavy petroleum product spills will evaporate into vapors that could burn or explode. While fire always raises concerns about public safety, the smaller volume of vapors available to burn would result in small fires that are less likely to endanger the public.

Blockage of Key Transit Routes, Key Facilities, or Ports Could Cost Billions

Although the Exxon Valdez accident demonstrates that even one spill can create substantial environmental cost, an attack that affects only a single tanker is unlikely to have significant consequences on the overall economy, other than a relative short-term market price increase. One tanker carries a small percentage of the total daily demand for a commodity. As mentioned above, Very Large Crude Carriers typically carry more than 2 million barrels of oil per voyage, which is about 10 percent of U.S. daily oil consumption. In most cases, the relatively small volume in an individual tanker could be replaced with other imports or from domestic storage. Two examples show the relatively small effect on supply if the broader supply network is not substantially affected: The approximately 240,000 barrels of oil released into Prince William Sound by the Exxon Valdez represented about 20 minutes of total U.S. oil consumption in 1989. The spill’s actual disruption was somewhat greater: According to the Department of Energy, the incident actually resulted in an oil supply disruption of 13 million barrels of oil over 13 days, because the spill restricted tanker transport in Prince William Sound and the volume of oil piped from the Alaskan North Slope also had to be reduced. Still, even this 13 million barrel disruption represented only about 18 hours of total national consumption.

More recently, an approximately 6,300-barrel oil spill in November 2004 significantly reduced tanker traffic on a stretch of the Delaware River for more than a week. As a result, a nearby refinery had to reduce production of refined products because of reduced crude oil availability. The oil spill also threatened to contaminate the water intake system of a nuclear power plant along the river, which was temporarily shut down. Despite these reductions in energy supply, gasoline prices actually dropped in the days after the oil spill.

The loss of a tanker carrying crude oil or heavy petroleum commodities will pose additional economic costs for ship replacement and environmental cleanup. Tankers can cost about $150 million, and the lost cargo could cost over $100 million dollars more. The Delaware River oil spill cleanup cost about $175 million over the course of 1 year. As the $2.2 billion Exxon Valdez spill cleanup illustrates, a larger spill or a spill in a more sensitive ecological zone could cost much more.

A much more significant impact could occur if an attack on a tanker resulted in the closure of a port, damage to a key facility, or long interruption of a key transit route. A successful attack while a tanker was docked, for example, could result in damage to a key facility. Even if a port were not closed altogether, the Coast Guard could increase the MARSEC level at one or more ports or industries to MARSEC 3—the highest level. The Coast Guard noted in the Federal Register that MARSEC Level 3 will involve significant restriction of maritime operations that could result in the temporary closure of individual facilities, ports, and waterways, in either a region or the entire nation. Depending on the nature of the specific threat, this highest level of maritime security may have a considerable impact on the stakeholders in the affected ports or maritime areas. The ability to estimate the costs to business and government for even a short period at MARSEC Level 3 is difficult to do with any level of accuracy or analytical confidence due to the infinite range of threats and scenarios that could trigger MARSEC Level 3. The Coast Guard also noted that the length and the duration of the increased security level to MARSEC Level 3 will be entirely dependent on the scope of transportation security incidents or disasters that have already occurred. The Coast Guard expects MARSEC Level 3 to increase the direct costs to businesses attributable to increased personnel or modified operations, and it also expects indirect costs to society of the ‘‘ripple effects’’ associated with sustained port closures would greatly outweigh the direct costs to individual businesses.

The scale of these effects can perhaps be seen in several hypothetical examples, both international and domestic.

Strait of Hormuz. Each day, tankers transport 20 percent of global daily oil consumption—about 17 million barrels of oil—through the Strait of Hormuz, the narrow waterway that connects the Persian Gulf with the Arabian Sea. While there are some limited alternatives for exporting oil from the Persian Gulf without going through the strait, these alternatives could not make entirely for the amount of oil lost by closure of the strait. While the United States and other oil-importing countries have reserves of crude oil that they could use to mitigate the loss of supply from the Persian Gulf, oil could not be withdrawn fast enough to entirely make up the lost volumes. For example, while the U.S. Strategic Petroleum Reserve has 688 million barrels of oil, the send-out capacity of the reserves is only 4.4 million barrels per day. Other countries face similar constraints. Additionally, if closure of Hormuz lasted for an extended period of time, strategic reserves could run out or become so low as to be unable to mitigate any additional petroleum supply disruptions.

Northeast United States. An attack on a key port in the northeastern United States, such as Boston, could result in energy commodity shortages or price spikes. For instance, the LNG facility near Boston (in Everett, Massachusetts), is the only facility importing liquefied natural gas in the Northeast. LNG is very important to the Northeast during heating season because natural gas movement into the Northeast is constrained during the winter because existing pipelines to New England are fully utilized. A report prepared by the Power Planning Committee of the New England Governor’s Conference, Inc., concluded that if LNG from the Everett facility and satellite operations elsewhere in the region is not available on a peak winter day, the region could have insufficient gas supply to meet the needs of all customers for space heating and some key electric generators. An attack that damages the Everett LNG facility during a cold winter could result in natural gas shortages or price spikes.

LOOP. A loss of import capacity at the LOOP could increase the price of crude oil and refined products. LOOP is a key energy facility—a terminal in the Gulf of Mexico that, according to DOE, accounts for more than 10 percent of total U.S. crude oil imports. LOOP and its storage terminals are connected to more than 50 percent of the refining capacity in the United States. LOOP is also the only facility in the United States that can receive tankers of the ultra-large and very large types. Counteracting the impact of losing LOOP could involve release of oil from the U.S. Strategic Petroleum Reserve and lightering in other U.S. ports.

While we did not find any studies on the economic consequences of closures to energy facilities at ports, other broader reviews of port closures identified possible loses in the billions of dollars. One study of the 2002 West Coast port shutdown, a 11-day closure of all West Coast ports due to a labor dispute, developed estimates (based on models) for the costs of the shutdown based on the losses in income by U.S. workers, consumers, and producers based on trade flow, ability to ship goods, and the inclination of consumers and industries to substitute for other, available goods. The study found that for a shutdown lasting 4 weeks (which was longer than the actual 11-day shutdown) total loses to the U.S. economy would be about $4.7 billion, with industrial consumers bearing the majority of that burden.

Other studies have attempted to model the economic impact of terrorist attacks on ports. For example, one study examined the potential effects of a 15-day port closure at Los Angeles-Long Beach due to a radiological bomb. It concluded that such a closure would result in regional impacts of $138 million in lost economic output and 1,258 person-years of lost employment. The study also analyzed the potential effects of a simultaneous attack on key bridges in the port area. The study assumed such an attack would cause a longer port closure and limited truck access to the port for 120 days, and under that scenario, it estimated the national economic impact at $34 billion and 212,000 person-years of employment lost. This analysis did not consider the potential mitigating effects of other modes of transportation for moving goods out of the port (i.e., using rail instead of trucks), or potential trade diversion to other ports during the crisis.

Economic Consequences from the Psychological Market Reaction to an Attack Could Be Severe

Finally, psychological ramifications of an attack could affect prices and supply. Researchers have noted that psychological market reactions to the consequences of an event may cause individuals and firms to change their decision-making processes, potentially causing consequences to ripple outward from the incident itself. If the incident affects key facilities, indirect effects could be magnified and also include businesses that are unable to operate both in the port and elsewhere if they are dependent on goods that move through the port. There is also the potential for unemployment of indirectly affected businesses.

The movement of gasoline prices after the Exxon Valdez spill is an illustration. Although the actual disruption in supply was relatively small, the oil spill sent shock waves through oil markets, particularly those most dependent on oil from the Alaskan North Slope along the West Coast. In the first week after the oil spill, spot market prices of unleaded regular gasoline increased $0.50 from $0.68 per gallon to $1.18 per gallon, a 74 percent increase due to fears of an extended closure of oil from the Alaskan North Slope. In the following weeks, however, prices began to decrease, hitting $0.99 on April 7 (2 weeks after the spill) and $0.82 on April 14 (3 weeks after the spill). Thus as markets realized that the supply shortage would be short lived, prices dropped sharply. The Department of Energy concluded in its analysis of the incident that the temporary loss of Alaskan North Slope supplies resulted in a perception of tight oil markets rather than a significant change in fundamental supply and demand factors.

Although Stakeholders Are Taking Protective Measures, Implementation Challenges Pose Difficulty Both Abroad and at Home

Many efforts are under way, both internationally and domestically, to protect energy commodity tankers and their attendant facilities, but significant challenges to the success of these efforts may limit the effectiveness of these actions. These challenges are evident in protecting the loading and transit of tanker shipments. In these settings, a broad range of international stakeholders is involved, including IMO, foreign governments, vessel and facility operators, and U.S. government agencies. To help protect the international maritime supply chain, signatory governments are responsible for implementing the requirements of IMO’s ISPS Code into law, many facility and vessel operators have taken steps to implement ISPS Code requirements, various industry organizations have reported security conditions in ports around the world to better inform their members, and the U.S. Coast Guard and Navy have also established their presence overseas. Challenges are evident, however, when examining how this framework has been implemented to date. Our limited reviews at foreign facilities showed wide disparity in the quality and extent of security. The Coast Guard is limited in the degree to which it can bring about improvements abroad when security is substandard, in part because its activities are limited by conditions set by host nations. The Navy takes actions that help to prevent attacks on tankers in transit, but is limited in the areas where it can patrol. In U.S. ports and waterways, a wide array of stakeholders is taking steps to protect arriving vessels, but challenges persist here as well. Key participants include the Coast Guard, CBP, and local law enforcement agencies. In some locations, however, the Coast Guard has had difficulty meeting its own self-imposed requirements for security activity. The completion of new LNG facilities planned for a number of ports could further exacerbate the Coast Guard’s ability to meet current requirements with its current resources.

In Spite of the Widespread Adoption of the ISPS Code, the Primary Challenge Overseas Involves Overcoming Disparities in Security at Different Locations

The ISPS Code lays out the international regime for securing port facilities and commercial vessels. Signatory governments of port and flag states are responsible for ensuring compliance with the ISPS Code at port facilities and vessels under their jurisdiction. Port states enter the compliance status of their facilities directly into an IMO database. While the ISPS Code was adopted under the auspices of IMO, IMO officials told us they have no way of knowing if a country’s port facilities are truly in compliance. IMO merely reports information submitted by member governments and does not verify its accuracy. Additionally, there is no other internationally recognized mechanism for third party review to verify actual compliance at port facilities. Without third party compliance review, it is extremely difficult to determine if ports are secure against terrorism.

Within some countries, the actual security measures can vary greatly from port facility to port facility, as indicated both by our own visits to foreign facilities and our discussions with agency and shipping officials. For example, In one country we visited, we observed varying degrees of implementation of measures to control access at different port facilities. One facility we visited had security cameras, fences, guards checking perimeter security, and identification checks for access control. Here, we were challenged by guards regularly as we passed through gates, even though facility officials were escorting us. At another facility, however, someone came to the guard station only when our escort signaled for him to come over, and fences were collapsed in some places and had holes in others.

Vessel operators we met with also described differences in security at different ports where they load. These operators said they use many sources of intelligence to determine their security stance when entering a port. Some operators said they can call on the knowledge of their own intelligence sources in port states, including contacts with intelligence agencies. Members of Intertanko, an international industry organization, can access its database of port security conditions, a database made up of reports from vessel operators that experience these conditions when they stop at various ports. In this database, operators reported that some ports security conditions are substantially worse than would be expected for an ISPS Code- compliant facility. In such cases, they reported taking steps that went beyond ISPS requirements, such as keeping ships at security postures beyond those called for by the port state’s declared security level.

The United States is attempting to deal with facility security lapses and inconsistent security conditions in some overseas ports with overseas efforts of its own. Because of congressional concern over the effectiveness of antiterrorism measures in place at foreign ports, the Coast Guard has implemented the International Port Security Program, which was designed in part to assess and help improve the security at foreign ports. This program reviews port states’ implementation of port facility security measures using established security standards, particularly the ISPS Code. According to the Coast Guard, the ISPS Code is the benchmark against which the effectiveness of a country’s anti-terrorism measures will be assessed. The program also reviews the country’s implementation of ship security provisions of the ISPS Code to help decide what actions to take in reviewing that country’s vessels when they call in U.S. ports. Visits are conducted by Coast Guard personnel operating out of the Netherlands, Japan, Singapore, and the United States. According to program guidance, the Coast Guard officers making these visits are to exchange information with officials of the host country, visit port facilities, and share best practices.

The Coast Guard faces a number of challenges, however, in operating this program. The locations to be visited are negotiated with the host country; thus the Coast Guard team making the visit could be precluded from seeing locations that were not in compliance. Coast Guard officials said International Port Security Program officers typically make up to three visits to a country, each lasting about a week. Their assessments are thus based on conditions observed when their visits occur. We are currently conducting a separate review of the Coast Guard’s international programs, and the report we issue will include a more complete review of the effectiveness of its International Port Security Program.

U.S. Military Presence Overseas Aimed at Helping Deter Maritime Terrorist Attacks

In certain locations, the Navy and Coast Guard have also taken more direct action to protect oil terminals—most notably in Iraq. The Navy has set security zones (zones where unauthorized vessels will be fired upon) around Iraqi oil terminals and stationed warships and patrol boats around the terminals (see fig. 8). The Navy has also stationed security personnel on the terminal platforms.

An additional protective measure taken overseas is the effort of State Department (State) officials to help ensure that terrorists cannot gain entry to the United States by working as seafarers on tankers or other vessels. State Department regulations eliminated crew list visas and required all crew members seeking to enter the United States to apply for individual crew visas. These visas are usually presented at U.S. ports of entry, but they can only be obtained abroad. Applicants must make appointments with State Department officials located at embassies and consulates and be interviewed. They must submit background information, fingerprints, and sufficient documentation to show they are employed by a shipping company. This information is then checked against a State Department database that contains records provided by numerous agencies and includes information on persons with visa refusals, immigration violations, criminal histories, and terrorism concerns. We reported in September 2005 steps State has taken since September 11, 2001, to improve the visa process as an antiterrorism tool as well as some of the additional actions that we believed State could take to further strengthen the process. According to the State Department, it has corrective actions under way that it believes will address the recommendations.

While Vessels Are in Transit, the Primary Challenge Involves Patrolling the Vast Distances Involved

Many countries help to protect energy commodity tankers by patrolling the sea transit routes. For example, Combined Task Force 150, which as of December 2006 included navies of the United States, Canada, France, Germany, Italy, Pakistan, and the United Kingdom, conducted operations in the Arabian Sea, Gulf of Oman, Gulf of Aden, Indian Ocean, and Red Sea to secure the waterways and prevent piracy and terrorism (see fig. 9). Naval and coast guard forces of Indonesia, Malaysia, and Singapore patrol the Strait of Malacca, a major choke point in the shipment of energy commodities. Improvements in security in the strait led to its removal from a list of areas in which Lloyds vessel insurers could raise premiums due to severe security risks. To protect their ships in areas of known danger, tanker operators said they are also modifying their normal practices. For example, tanker operators told us that they have directed their vessels to travel much further off the shore of Somalia than they would ordinarily. Near Somalia, the International Maritime Bureau recommended in 2005 that commercial vessels stay 200 miles away from the coast, and the U.S. Maritime Administration and Coast Guard issued similar guidance for U.S.-flagged vessels. In piracy-prone waters, such as the Strait of Malacca, actions include sailing with all lights on, using extra lookouts, and equipping crews with fire hoses to prevent or repel boarders.

While these actions have had some success in securing transit routes, the vast areas to be patrolled and the small number of ships available present the military forces of the world with great challenges in protecting the sea lanes. For example, a multinational task force of military vessels that patrols the Arabian Sea, Gulf of Oman, Gulf of Aden, and northwestern Indian Ocean is made up of about 15 ships. The navies of regional countries also patrol near their shores, but in areas such as the Horn of Africa this multinational task force is the only major presence. Because tankers travel so frequently and so few naval ships are available to be on station, naval protection cannot be offered for all those who travel in these waters.

Besides patrolling the waters, tracking the movement of tankers is another way to monitor them. A recently passed IMO requirement calls for most commercial vessels, including tankers, to begin transmitting identification and location information on or before December 31, 2008, to SOLAS contracting governments under certain specified circumstances. This will allow the vessels to be tracked over the course of their voyages. Under this requirement, information on the ship’s identity, location, date, and time of the position will be made available to the ship’s flag state, the ship’s destination port state, and any coastal state within 1,000 miles of the ship’s route. For ships approaching the United States, an extensive tracking program is already in place. The Coast Guard currently tracks ships as they approach the U.S. coastline and is developing programs for longer- range tracking.

In U.S. Waterways and Ports, the Primary Challenge Involves Coping with Limited Resources and a Growing Security Workload

Domestically, many agencies and other stakeholders have taken steps to develop and implement plans for helping ensure the security of maritime energy commodity shipments. The Coast Guard’s primary challenge is utilizing its limited resources to meet its security workload. Since the terrorist attacks of September 11, 2001, Coast Guard field units have seen a substantial increase in their security workload. Coast Guard field units at some ports have not always been able to meet their maritime security activity requirements. Moreover, the Coast Guard’s resource demands are expected to grow as more facilities for importing LNG come on line, increasing the number of shipments requiring Coast Guard protection.

The efforts to provide security over energy commodity shipments arriving at U.S. waterways and port facilities involve a wide range of federal and local agencies as well as owners and operators of the facilities that receive the shipments. Much of the framework for port security is contained in MTSA. DHS, which is the main agency responsible for homeland security responsibilities contained in MTSA, has assigned most of the responsibilities to the Coast Guard. To carry out this responsibility, as well as the nation’s port state oversight of foreign-flagged vessels, the Coast Guard’s efforts range from boarding ships and escorting those shipments of greatest concern to patrolling port waters and overseeing the security actions undertaken by vessel and facility operators. CBP has the lead role in ensuring that only authorized persons onboard tankers come ashore when calling on U.S. ports and that no contraband is smuggled into the United States using the tankers. MTSA requires regular vulnerability assessments of port facilities, and facility owners and operators are required to develop and update regularly a plan for meeting basic security requirements. Facility security plans and updates to them are to be reviewed and approved by DHS.

Security Requirements Vary by Commodity

Particularly for the Coast Guard, the security activities vary greatly depending on the type of energy commodity being carried by tankers. Two energy commodities, LNG and LPG, are on the list of what the Coast Guard has traditionally called Certain Dangerous Cargo (CDC). Coast Guard guidance requires its field units to take certain actions to protect LNG and LPG tankers in key port areas, which include high-population areas or areas with critical infrastructure, such as bridges or refineries. Beyond protecting LNG and LPG shipments in these key port areas, Coast Guard field units are required to implement security activities commensurate with the extent of critical infrastructure, extent of high- profile vessel traffic transiting through key port areas, and availability of support of non-Coast Guard entities, such as state and local law enforcement agencies. According to senior Coast Guard field officials with LNG security responsibilities, LNG tanker transits have received the greatest attention of the two, due in large part to the much greater size of LNG tankers, the amount of hazardous cargo they are carrying, and the public perception of the danger of LNG shipments. Many of these security measures are now being implemented at existing LNG ports around the country. The security measures address two phases of LNG operations, including (1) the transit of an underway tanker through a port and (2) the period when a tanker is moored at a receiving terminal.

Coast Guard security activity requirements are less stringent for oil tankers or tankers carrying many other petroleum-based products, such as gasoline or crude oil, because they are not identified in the CDC list of hazardous marine cargo as posing the greatest human safety risks. However, field units do have discretion to take additional actions to protect oil tankers and associated waterside loading facilities that are determined to pose security concerns.

State and Local Law Enforcement Agencies Play a Major Role in the Protection of Tankers and Facilities

At many ports we visited or contacted, Coast Guard field units are receiving assistance from state and local law enforcement agencies for help in conducting port security operations. These partnerships with state and local law enforcement agencies have been encouraged by Coast Guard headquarters. Coast Guard officials said the support has been particularly valuable in protecting LNG carriers. For example, field units at two of the four ports with onshore LNG importing facilities reported using regular escort support from state or local law enforcement agencies.

In addition to state and local law enforcement agencies, facility operators play a significant role in protecting against terrorist threats. For those key energy ports we visited, the Coast Guard reported that the waterfront energy facilities in those ports were taking actions to comply with the requirements the Coast Guard established pursuant to MTSA. Of the 19 domestic waterside petroleum facilities we visited, all were reported by the Coast Guard to be in compliance with MTSA regulations. Examples of steps taken include key-card access systems, closed-circuit television cameras and sensors along fencing, hardened perimeter fencing, and reinforced gates at most access control points. Facility operators told us they conduct regular security drills involving emergency and terrorism scenarios and they regularly share pertinent security information with other participants of the Area Maritime Security Committees. In some cases we observed steps that go beyond MTSA requirements, such as using radio frequency identification cards that can track the location of all persons on facility property.

The Coast Guard Faces Challenges Meeting Internal Security Guidance

Coast Guard records show that its field units in several of the energy- related ports we reviewed have been unable to accomplish many of the port security responsibilities called for in Coast Guard guidance. According to the data we obtained and our discussions with field unit officials, resource shortfalls were the primary reasons for not meeting these responsibilities.

The Coast Guard’s Near-Term Efforts to Align Requirements with Field Unit Capacity Have Limitations

We have noted in earlier work that the Coast Guard is ahead of many agencies in the degree to which it has developed a sound framework for managing its workload on the basis of risk. When carried out effectively, risk management offers a way to make informed decisions about how best to use limited resources. In the Coast Guard’s case, its actions involve a balancing act both in deciding how best to meet its various security and nonsecurity missions agencywide, but also in weighing the pros and cons of investing additional resources in energy commodity tanker protection versus the wider range of other port activities that require protection. The Coast Guard uses the requirements laid out in its guidance to establish a port-specific security approach in which the workload varies based on such factors as the proximity of population centers to the port area, the extent of critical infrastructure at the port, the extent of high-profile vessel traffic transiting through key port areas, and the availability of support from other entities.

Given that the resource levels of some field units have limited their ability to achieve Coast Guard security standards, the Coast Guard has attempted to realign its security requirements to more closely match available resource levels. Coast Guard headquarters officials meet on an annual basis to review new risk assessments and current Coast Guard capacity to mitigate risk. The Coast Guard also receives recommendations from field unit commanders for introducing tactical efficiencies into security requirements. Over the past several years, the Coast Guard has revised its operational security guidance in two main ways: Revising the standards for the amount of activity required for conducting some security activities. In August 2006 the Coast Guard substantially reduced the types of CDC-carrying vessels that must be escorted. The Coast Guard developed a subset list of the CDC commodities—called Especially Hazardous Cargo—it determined as posing the greatest safety and security risks. This list included both LNG and LPG, meaning that the activities required to protect them remain unchanged. However, for CDC commodities not included on the Especially Hazardous Cargo list, such as vinyl chloride, escort requirements were eliminated during normal threat conditions— MARSEC I. In all, requirements were reduced for about 20 different CDC commodities carried in bulk. The August 2006 list of Especially Hazardous Cargo consisted of seven hazardous liquid gas or liquid commodities: acrylonitrile, ammonium nitrate, ammonium nitrate/fuel oil, anhydrous ammonia, chlorine, LNG, and LPG.

Providing greater operational flexibility for Area Commanders when resource constraints may limit the ability to meet requirements. The Coast Guard has introduced new tactical options that Area Commanders may utilize, in some cases, to accomplish resource intensive security activities.

The Coast Guard’s methodology used to develop the Especially Hazardous Cargo has two substantial shortcomings, however. Our specific concerns are as follows: Lack of thoroughness. To identify the highest risk CDC commodities, senior Coast Guard headquarters officials told us they reviewed available consequence analysis assessments that had been conducted by the Coast Guard’s Special Technical Assessment Program and also reviewed a 2004 consequence analysis of LNG by Sandia National Laboratories. They said they also incorporated the views of persons with expertise in CDC commodities, including Coast Guard field officials. However, the Coast Guard did not perform consequence assessments on many CDC commodities by the time it created the Especially Hazardous Cargo list, and as of January 1, 2007, it still had not done so.

No systematic comparative analysis was conducted to identify and prioritize the highest-consequence commodities. Coast Guard headquarters officials acknowledged they did not conduct a relative risk assessment of the CDC commodities. Rather, officials told us they relied on the collective best judgment of Coast Guard experts from field units and headquarters that had significant experience dealing with various transportable energy and chemical commodities. By conducting a relative risk analysis of all CDC commodities, the Coast Guard would have had available more definitive input for determining which CDC vessels posed the greatest risks necessitating additional mitigation measures, which in this case would be an escort.

The Coast Guard is taking action to address the methodological limitations we note. Shortly after the Coast Guard released the Especially Hazardous Cargo list, we shared our concerns with Coast Guard officials. The Coast Guard has since begun efforts to broaden its studies of potential consequences to include a wide range of hazardous commodities. It contracted with the American Bureau of Shipping to perform a comparative analysis of the consequences of an attack on vessels carrying all commodities on the CDC list, including LNG and LPG. The product of this analysis is to be a ranking of the relative consequences of each of the CDC commodities. This study is scheduled to be completed in spring 2007. Coast Guard headquarters officials told us that following this analysis, and subject to available funding and other considerations, they may consider adding other commodities to the comparative analysis, such as gasoline and jet fuel.

Going beyond the consequence analyses of hazardous commodities, the Coast Guard has also developed a tool to compare the overall relative risk scores of different terrorist attacks at the nation’s ports. Field units are developing risk scenarios for potential targets at their ports and possible attack types that could be used against those targets. Using the Maritime Security Risk Assessment Model, the units are to analyze the different risk scenarios in relation to three key elements of risk: reported threat of different types of attack, vulnerability of the targets (incorporating different protective actions taken by security stakeholders), and consequences of a successful attack (including human health, economic, and environmental). Each risk scenario is to receive a score. These risk scores are to be comparable within and between ports so that they can be used in risk management decisions both locally and nationally.

Additional LNG Facilities Set to Come On Line Will Likely Pose Additional Challenges for Meeting Mission Requirements

In the longer term, plans for adding additional LNG facilities may require the Coast Guard to reassess its workload yet again. Currently the Coast Guard is faced with providing security for vessels arriving at four domestic onshore LNG import facilities, but the number of LNG tankers bringing shipments to these facilities will increase considerably because of expansions that are planned or under way. In addition, industry analysts expect approximately 12 more LNG facilities will be built over the next decade (see fig. 12). Consequently, Coast Guard field units will likely be required to significantly expand their security workloads to conduct new LNG security missions.

Recognizing this coming increase in demand on security resources at LNG ports, Coast Guard field units have been planning strategies to help meet this demand. We found evidence that, in their planning efforts, Coast Guard field units and affected locations are seeking assistance from a wide range of stakeholders and sources. In particular, stakeholders mentioned the following: Manpower from state and local law enforcement. Several field units plan to rely on state and local agencies to conduct a considerable share of the new LNG workloads. While state and local law enforcement agencies have generally agreed to participate in LNG security operations, such support was largely contingent upon their receiving funding to cover their own resource gaps. According to the Coast Guard, at some ports, law enforcement agencies required funding to cover new capital investments, such as additional patrol boats, as well as operational costs such as funding for additional manpower or fuel for the new boats.

Financial help from facility operators. At some of the proposed LNG ports we reviewed, facility operators were also planning to contribute considerable financial resources to help fund new LNG security operations. In doing so, these companies planned to fund both operational and capital enhancement costs for state and local law enforcement agencies that had agreed in concept to support Coast Guard LNG security missions. At two ports where the Coast Guard had approved security arrangements for new LNG facilities, state and local law enforcement agencies had already developed, or were planning to develop, a cost-sharing agreement with the facilities. For example, at one port, a potential LNG facility operator made a commitment to fund most of the capital enhancements and operational costs of the state and local law enforcement agencies involved, including two patrol boats for state agencies, two tugboats, and communications equipment. Facility operators told us they were motivated to provide resources because they understood that doing so was essential to ensuring final approval of the LNG facilities. Some facility operators also told us that the Energy Policy Act of 2005 required them to develop resource cost- sharing agreements to offset state and local government resources used specifically for the new LNG facilities.

Financial help through federal grants. State and local law enforcement agencies also reported that they were relying, in part, on federal grants to obtain additional resources. Of the 15 state and local law enforcement agencies we contacted, 9 agencies reported applying for Port Security Grants or Urban Area Security Initiative grants. Law enforcement agency officials told us they planned to fund capital enhancements with this grant funding. Among those items officials planned to fund with their grants were new patrol boats, construction of a new boathouse and piers, helicopters, and security cameras to be placed along an LNG transit route.

While port security grants and resource sharing agreements are expected to address at least part of the resource needs of the Coast Guard’s law enforcement partners, the Coast Guard is likely to require additional resources to fulfill its own new security responsibilities. To date, however, field units have made little progress in obtaining additional resources. Additionally, because federal law prohibits the Coast Guard from receiving resources for its own use from private sector companies, the Coast Guard cannot use resource-sharing partnerships to help fill its own resource needs. Consequently, Coast Guard headquarters officials told us they recognize that despite the efforts of Captains of the Port to develop local solutions to new security demands, some field units will continue to lack the resources necessary to meet their increasing LNG security workloads.

Coast Guard headquarters officials told us they were considering two general options to provide field units with the necessary resources to carry out their new LNG security workloads. These two options are as follows: Redistribute resources to units with new LNG activity. Coast Guard officials told us they are considering shifting resources from ports with surplus resources to ports with new or expanded LNG facilities. Coast Guard headquarters officials told us, however, that they have not yet determined which ports would, or even could, provide these excess resources. Coast Guard’s Atlantic area—where most of the new LNG activity is expected—has ordered districts and field units to report any excess resource capacity. Guided by risk management, Coast Guard headquarters may redistribute any available excess capacity to ports with new LNG security workloads. The earliest that the Coast Guard could reprogram assets from within the Atlantic Area is fiscal year 2009.

Request new resources via budget proposals. Coast Guard officials also reported that they may request additional funding through the annual budget process to support the acquisition of additional boats and personnel to conduct vessel escorts and infrastructure patrols and the training of additional personnel.

As of January 1, 2007, Coast Guard headquarters officials told us they had not yet developed a plan—or blueprint—for how to proceed with these two options for addressing new LNG security resource demands. The decisions about how to proceed may involve difficult choices, because shifting resources to this growing need could involve trimming resources now tasked to other homeland security duties or traditional non-homeland security missions, and because seeking more resources involves asking Coast Guard decision makers to weigh important, but competing, priorities. A national plan that identifies the Coast Guard’s nationwide LNG resource needs and identifies milestones and funding needs for meeting those needs can help the Coast Guard manage its limited resources and communicate resource needs to Congress. It is important to complete this plan and address in it key elements and issues so that it is both comprehensive and useful to decision makers who must make difficult policy and budget choices.

Stakeholders Have Developed Spill and Terrorism Response Plans but Face Several Challenges in Integrating Them

To mitigate the consequences of a terrorist attack on a tanker carrying energy commodities, the United States has multiple plans that address actions to be taken at the national, port, facility, and vessel levels. To translate these plans into effective response actions, stakeholders could face at least three main challenges. First, if an attack were to occur, the stakeholders would need to integrate current, separate plans for the two types of responses necessary for mitigating the consequences of an attack—spill and terrorism responses. Second, port-level plans to mitigate the potentially substantial economic consequences of an attack, such as plans that set priorities for the movement of vessels after a port reopens, could be useful. Third, stakeholders may need to obtain resources to ensure that they can carry out the plans. At the port level, this challenge may extend to response equipment, training, and communications equipment. To date, federal grants for port security have been directed mostly to prevention rather than response, but now DHS is moving toward a more comprehensive risk-based decision-making process for allocating grant funds. At the time of our review, DHS did not have performance measures for determining how to allocate resources to ensure ports can effectively respond to an energy commodities spill caused by terrorism.

Planning for Spill Response Is Largely Separate from Planning for Terrorism Response

The planning framework for responding to spills and terrorism incidents is extensive, involving multiple federal plans and memorandums of understanding, port-specific plans, as well as plans for individual facilities and vessels. As figure 13 shows, at the national level these plans are carried out under the general framework of the National Response Plan (NRP) but are developed into two separate lines of effort—one for spill response, the other for terrorism response.

The NRP designates the Coast Guard as the primary agency for spill response on water and the FBI as the primary agency for terrorism response, and it calls on the two agencies to coordinate their responses if the terrorist attack involves energy commodities. For this type of incident, FBI officials stated, crime scene investigation and preservation would take place at the same time as the environmental response activities that would be initiated to contain the likely spill. In this situation, the NRP notes that spill responders will provide assistance, investigative support, and intelligence analysis for oil and hazardous materials response in coordination with the law enforcement and criminal investigation activities of the FBI.

As the figure shows, beneath the NRP, spill responses are coordinated by the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), while terrorism responses are coordinated by the Terrorism Incident Law Enforcement and Investigation Annex. Also at the federal level, various other federal plans and agreements, such as the National Incident Management System (NIMS), the Marine Operational Threat Response Plan (MOTR), and interagency memorandums of agreement also help guide the response. The spill and terrorism responses continue into port-level planning, where the key guidance for spill responses is found in a port’s Area Contingency Plan (ACP) and the key guidance for terrorism responses is found in the port’s Area Maritime Security Plan (AMSP). Table 3 provides a brief description of the various plans and agreements found in figure 13.

At the federal level, in addition to the plans and agreements governing spill and terrorism responses in table 3, other guidance and requirements related to economic recovery include the following: The Maritime Infrastructure Recovery Plan (MIRP)—a supporting plan for the National Strategy for Maritime Security—contains procedures for managing the economic consequences and recovery of maritime infrastructure after a transportation security incident, such as a terrorist attack. The MIRP provides strategic-level guidance for national, regional, and local decisionmakers to set priorities for restoring the flow of domestic cargo. The plan recommends that the Captain of the Port consider key shipping channels and waterways for homeland security; military traffic; and commercial operations; key landside transportation infrastructure, such as tunnels and bridges; and other infrastructure key to maintaining continuity of operations in the port.

The SAFE Port Act of 2006 requires the Secretary of Homeland Security to develop protocols for the resumption of trade after a transportation security incident, such as a terrorist attack. The protocols must include a plan to redeploy resources and personnel as necessary to reestablish the flow of trade, and appropriate factors for establishing prioritization of vessels and cargo that are critical for response and recovery, including factors related to public health, national security, and economic need.

At the port level, under the Oil Pollution Act of 1990 and the Maritime Transportation Security Act of 2002, the Captain of the Port is to establish both spill and terrorism response plans. In doing so, the Captain of the Port must identify local public and private port stakeholders who will develop and revise separate plans for marine spills of oil and hazardous materials (ACP) and for terrorism response (AMSP). Both plans call for coordinated implementation with other plans, such as the response and security plans developed by specific facilities or vessels. Local stakeholders are organized into two separate groups: an area committee for spill response (Area Committee), which develops the ACP, and an area committee for terrorism response (Area Maritime Security Committee), which develops the AMSP—both committees are chaired by the Captain of the Port. Some stakeholders, such as port authorities, fire departments, and facilities in the port, may be part of both committees, while others may be part of only one committee. For example, oil spill response organizations are likely to be involved only with spill response planning.

If an energy commodity tanker was attacked while moving through a U.S. port or while docked, a range of response activities would need to occur to address the consequences. Figure 14 illustrates how incident response would potentially take place following an attack and a subsequent spill.

As figure 14 shows, incident response includes three separate but overlapping activities, as reported by port stakeholders: Initial incident response for public safety and establishment of the incident command site. Because energy commodity tankers carry flammable and/or hazardous materials, the first responders are likely to be area fire and police departments; receiving facility personnel may also respond. The first concern is always public safety, and therefore the fire department would begin rescuing victims and addressing the probable fire. Law enforcement agencies would secure the perimeter of the scene to prevent potential follow-on attacks as well as to prevent the public from moving too close to the attack location—both to protect the public and to maintain the crime scene for subsequent investigation. Initial responders would also establish a multi-agency incident command site near the location of the vessel, where all responding agencies with jurisdictional responsibilities for spill and terrorism response would congregate to manage the operations.

Crime scene preservation and investigation, and initial spill response activities. As public safety operations continue, law enforcement agencies would determine whether terrorism had caused the spill, and if so, would conduct an investigation at the same time that life safety operations are continuing and spill response operations are beginning. Investigations would involve crime scene and perimeter control, determining if additional devices may be present and disposing of them, and apprehending suspects. Spill operations would initially involve the laying of a containment boom to protect the surrounding environment from contamination caused by the spill. Law enforcement and spill response organizations will need to coordinate their activities because actions to mitigate environmental consequences can potentially damage crime scene evidence.

Spill and port recovery activities. Once the resulting spill is contained, incident commanders would determine their next steps, depending on conditions. Spill recovery may include intentionally burning contained oil, allowing the commodity to evaporate, using chemicals to disperse the spill, or using mechanical recovery to skim the oil out of the water. If a terrorist attack had occurred, the crime scene investigation would have to be conducted before the port could be fully restored for cargo and passenger ships.

According to FBI officials, the FBI would work with the Coast Guard to get access to the incident site as soon as possible to obtain all crime scene evidence possible, without interfering with the response.

These complex activities would be carried out by many different federal, state, and local agencies. Figure 15 illustrates one possible scenario for spill and terrorism response actions and shows some of the agencies that might carry out these actions.

Federal Agencies and Local Ports Could Face Challenges in Integrating Spill and Terrorism Response Plans, Planning for Economic Response, and Obtaining Needed Resources

In the event of a terrorist attack on an energy commodity tanker, federal agencies and port communities could face challenges in integrating their spill and terrorism response plans. Ports could face two additional challenges: planning for economic response activities and obtaining the necessary resources to respond to a terrorist attack on an energy commodity tanker.

Federal Agencies and Ports Could Face Challenges in Integrating Spill and Terrorism Response Plans

As we have noted in prior reports, a fundamental goal of emergency preparation and response is the ability to respond to emergency incidents of any size or cause with well-planned, well-coordinated, and effective efforts that reduce the loss of life and property and set the stage for recovery. In our September 2006 report on the preparation for and response to Hurricane Katrina, we stated that fundamental to effective preparation and response are (1) clearly defined, clearly communicated, and clearly understood legal authorities, responsibilities, and roles at the federal, state, and local level, and (2) identification and development of the capabilities needed to mount a well-coordinated, effective response to reduce the loss of life and property and set the stage for recovery. Providing these fundamentals requires effective planning and coordination, including detailed operational plans, and robust training and exercises in which needed capabilities are realistically tested, assessed, and problems identified and addressed. With regard to potential attacks on energy commodity tankers in U.S. ports, the ports could face challenges if roles and responsibilities have not been clearly defined, communicated, and understood and if needed capabilities have not been fully identified and appropriately tested. The National Preparedness Goal uses 15 scenarios to identify 37 capabilities and the associated critical tasks needed to respond to incidents of national significance—those that go beyond the state and local levels and require a coordinated federal response. However, the scenarios used to identify these capabilities do not specifically encompass the capabilities needed for responding to attacks on oil, gas, or other tankers in American ports.

The NRP calls upon the Coast Guard and the FBI to coordinate their response in the event of a terrorist attack on an oil or hazardous materials tanker. However, the agencies cannot be assured that their joint response, concurrently implementing the numerous existing plans, will be effective unless they have developed a detailed operational plan that integrates their spill and terrorism responses and have tested these responses in joint exercises. According to headquarters and field office Coast Guard and FBI officials, coordination would be managed through the use of the unified command structure in the National Incident Management System and the other general coordination mechanisms in the NRP and the MOTR. However, the unified command structure and the NRP are generally not specific in explaining how they will be made operational following an attack. As we have recently reported, the implementation of the NRP following Hurricane Katrina identified concerns with coordination within and between federal government entities using the plan. We recommended the development of detailed operational plans for the NRP and its annexes.

In addition to having operational plans, agencies should conduct joint exercises that simulate an attack and the agencies’ responses. Without such exercises, it would be questionable whether joint Coast Guard and FBI activities would proceed as planned. Simulation exercises help determine the strengths and weaknesses of various plans and the ability of multiple agencies or communities to respond to an emergency incident. According to DHS’s Homeland Security Exercise and Evaluation Program, well-designed and executed exercises are the most effective means of (1) testing and validating policies, plans, procedures, training, equipment, and interagency agreements; (2) clarifying and training personnel in roles and responsibilities; (3) improving interagency coordination and communications; (4) identifying gaps in resources; (5) improving individual performance; and (6) identifying opportunities for improvement.

The value of joint simulation exercises in uncovering problems has been demonstrated in the results of the largest national, state, and local interagency terrorism response exercise ever conducted. This exercise— called TOPOFF 3—was conducted in April 2005 and included explosions and hazardous materials releases in multiple locations around the nation (none of which were on the water). According to the Coast Guard after- action report for one of the sites, the FBI (1) never fully integrated into and accepted the unified command called for under NIMS, (2) did not appropriately staff the incident command post with its representatives, (3) maintained distinctions between hazardous materials release response and terrorism investigation actions, and (4) kept management of the investigation separate from the incident management overseen by the unified command. According to the after-action report, “concurrent management of both the investigation and all other response functions would have increased the effectiveness and efficiency of the response effort.” The report also recommended the continuation of multiagency training and exercises to test interagency coordination efforts.

The need for joint spill and terrorism response exercises has been discussed, but exercises have not been conducted, at the national level. Specifically, planning discussions for the 2004 Spill of National Significance (SONS) exercise identified the need to clarify how the FBI fits into spill response activities when the possibility of terrorism is present, but the exercise did not test integrating the FBI’s and other agencies’ response. However, both Coast Guard guidance and the Department of Justice’s Inspector General have supported the need to combine spill and terrorism response exercises. Specifically: Coast Guard guidance recommends combining terrorism response exercises with other exercises, such as spill response. OPA 90 and MTSA implementing regulations require similar schedules for exercises of spill and terrorism response plans, and the integration of these exercises could improve response performance and complete required multiple response exercise mandates at one time, according to Coast Guard officials.

The Department of Justice’s Inspector General in 2006 called for more joint exercises between the Coast Guard and the FBI in high-risk ports to, among other things, resolve potential role and incident command conflicts in the event of a maritime terrorism incident. The Inspector General’s report emphasized the interaction of Coast Guard and FBI security units, but these recommendations are equally applicable for integrated exercises to respond to a spill caused by a terrorist attack. Once public safety is addressed, the Coast Guard and FBI have different priorities for their jurisdictional responsibilities—spill containment and cleanup and crime scene preservation and investigation, respectively. At the time of our review, FBI officials told us they knew of no upcoming joint planned exercises. FBI headquarters officials have not issued guidance to field office agents on integrating spill and terrorism responses activities within a single exercise.

Coast Guard officials told us that the MOTR is intended to delineate Coast Guard and FBI roles in responding to an attack. FBI headquarters officials told us that their participation in several MOTR conference calls demonstrated that coordination among MOTR agencies is effective. These telephone discussions may improve overall coordination, but exercises for joint spill and terrorism responses should be conducted as often as appropriate.

At the port level, effectively integrating spill and terrorism emergency responses requires all plans to operate in unison—the port spill response plan (ACP) and the port terrorism response plan (AMSP), as well as facility and vessel response plans. As figure 13 shows, there is no direct operational link between the ACP and the AMSP.

Without a direct link, spill responders may not have the information they need to respond to a spill caused by a terrorist attack. While the AMSP has served as the terrorism response plan for ports since July 2004, it contains sensitive security information and is therefore only available to those individuals who are considered to have a “need to know.” As a result, nonsecurity personnel, such oil spill cleanup responders, may not have access to these plans during an emergency. For example, only 3 of the 13 ports we visited had ACPs that addressed terrorism response within the spill plan by incorporating terrorism incident annexes or other plans. Consequently, the ACPs may need to have explicit sections for responding to terrorism.

The general lack of integration in the plans carries over to the separate spill and terrorism response communities at the port level. As previously discussed, individual members on these committees may not know all the members of the other committee, but a terrorist attack on a tanker would require them to respond simultaneously. We identified only a few examples of joint committee meetings that enabled members to interact. For example, Coast Guard officials told us that, since September 11, 2001, the Captain of the Port at one location has facilitated meetings between spill response providers and local offices of emergency management and federal and local law enforcement agencies in order to improve response coordination among all entities. They stated that if the spill and terrorism response communities were formally joined, response integration and efficiency would improve. In addition, at another location, Coast Guard officials noted, the local area training and exercise workgroup contains members of both the spill and terrorism response committees in order to consolidate training and exercises. Finally, in an attempt to improve communication, the FBI established Maritime Liaison Agents (MLA) at the ports so that all stakeholders would know the local agent in the event of an incident. At some ports we visited the spill responders knew who the FBI agent was and at other ports they said they did not.

USCG guidance states that local port operators, municipalities, and public safety agencies are expected to provide and maintain adequate disaster response capabilities in their ports, with capability requirements likely to vary from port to port depending on size, commodities received, environmental considerations, relation to population, etc. Recognizing the variability of capability requirements, the USCG has developed Critical Success Factors (CSF) for spill response that drive a “Best Possible Response”—that is, a set of general goals to achieve when conducting a comprehensive and effective response. Six particular CSF are to be considered when developing ACPs, including (1) no public or responder injuries, illness or deaths; (2) sensitive areas protected; (3) resource damage minimized; (4) infrastructure damage minimized; (5) economic impact minimized; and (6) highly coordinated law enforcement and emergency management operations. Joint exercises can maximize the ability of a given port to carry out a “best response” in the event of an attack on a tanker. However, we recognize that numerous scenarios could be exercised in any given port; consequently, joint spill and terrorism response exercises may not be the most urgent for a port that receives limited quantities of energy commodities. Figure 16 shows firefighters preparing for a potential marine response during a training exercise.

Two developments—one a project at an individual port, the other a new requirement added by Congress—may help bring about more integrated responses. Specifically: At one port, we found a potential leading practice for integrating a marine terrorism response. The port’s Marine Terrorism Response (MTR) project was launched to develop and validate a multiagency response system and national model plan to help mobilize local, state, and federal resources for marine terrorism incidents. The MTR’s goals include increasing preparedness, identifying gaps in emergency response capabilities, and planning for timely restoration of trade. The project generated a response plan and a field guide for how to integrate responses for a range of issues, such as public safety, response coordination, recovery, and crime scene management. Stakeholders plan to incorporate existing response plans, such as the ACP, as annexes to the MTR. According to the FBI official involved with the MTR planning process, the MTR serves as an effective linkage between the spill and terrorism response sections of the National Response Plan.

Under the SAFE Port Act of 2006, DHS must develop interagency operational centers by fall 2009 for port security at all high-priority ports. The Coast Guard and the FBI are among the agencies that will be represented at these operational centers, as will other public and private sector stakeholders who would be adversely affected by a terrorist attack. These centers may also include stakeholders who would be involved in a joint spill and terrorism response. Integration may be improved through the daily interaction of all these stakeholders. In April 2006 testimony before the House Homeland Security Committee, DHS’s Deputy Secretary stated that physically connecting the various agencies involved is important, and the Port of New York and New Jersey’s Manager of Port Security voiced support for the development of joint operation centers in key U.S. ports.

Port Plans to Mitigate Economic Consequences Could Be Useful

The economic consequences of a terrorist attack on a tanker could be significant, particularly if one or more ports are closed. Currently, guidance in the Maritime Infrastructure Recovery Plan suggests that ports develop priorities for bringing vessels into port after a closure. Additionally, AMSPs must include a section on crisis management and recovery to ensure the continuity of port operations. At the time of our review, there was no national-level guidance for use by local ports. We identified some ports that, on their own initiative, were incorporating economic recovery considerations into their port-level plans, which could benefit other ports seeking to develop their own plans for mitigating the economic consequences of an attack.

The SAFE Port Act requires the Secretary of Homeland Security to develop protocols for how maritime trade will be reestablished after a terrorist attack. These protocols must include appropriate factors—related to public health, national security, and economic need—that can be used to set priorities for vessels and cargo entering the port after a closure. While the act does not expressly require the development of port-level plans for facilitating the resumption of trade after an incident, DHS could consider developing guidance for ports to use to develop plans for mitigating economic consequences.

Ports Could Face Challenges in Securing Resources to Carry Out Their Response Plans

Ports could face challenges in marshaling resources to improve port response capabilities, including obtaining or sharing needed marine firefighting equipment and training, other training, and interoperable communication systems that allow emergency responders to talk to each other to effectively coordinate their efforts.

Marine Firefighting Equipment and Training

The ports we visited varied considerably in their ability to combat marine fires. Some ports had large fireboats that are designed to deal with fires on tankers, as well as firefighters trained to conduct shipboard firefighting operations. In contrast, other energy commodity ports relied on land- based firefighting companies; these companies told us that they did not have the training and/or the equipment to fight marine fires. See figure 17 for two examples of marine firefighting response.

While some local ports may not be well equipped to handle marine fires, companies operating tankers are required to provide for marine firefighting and salvage capabilities under the Oil Pollution Act of 1990. However, we identified several limitations associated with these requirements: Timeliness of response not spelled out. OPA 90 does not specify how soon after an event either marine firefighting or salvage must occur. Under a Coast Guard rule proposed in 2002, and not yet issued as final, contracted marine firefighting resources generally would have to be provided within 8 hours after notification of an event, while salvage operations generally would have to begin within 16 hours. Even if this rule were in force, it might not be timely enough to prevent the vessel from sinking.

Extent of planning for salvage varies widely. Salvage is important for marine firefighting because a ship may sink from an attack, may be deliberately sunk to control the resulting fire, or may be accidentally sunk by the firefighters because they are not familiar with ship stability issues inherent in the marine firefighting environment. In addition to the OPA 90 requirement, the SAFE Port Act of 2006 requires the development of salvage response plans to supplement Area Maritime Security Plans. While all ACPs for the ports we visited contain sections on salvage, we found that the plans varied widely in detailing salvage responses. A 2003 National Transportation Safety Board workshop identified potential shortfalls in local salvage planning and/or capabilities as an issue that needed to be addressed. One reason for capability shortfalls identified was that locally available salvage resources may sometimes be lacking.

If ports lack marine firefighting or salvage capabilities, we identified the following other avenues for obtaining resources to enhance these capabilities. However, these avenues carry limitations, mainly related to the speed with which they could be deployed on site.

Mutual aid agreements. Some port community members have mutual aid agreements in place to provide assistance in emergencies. These agreements can be industry-to-industry, municipal-to-municipal, industry-to-municipal, or municipal-to-industry. However, these agreements can have inherent delays in response time if needed resources are located some distance away or require considerable time for redeployment. For example, one refinery noted, in its site emergency manual section for ship fire procedures, that there is a need to evaluate whether refinery responders need to call the local fire department and request fireboat assistance because of a 45-minute delay in subsequent arrival of this resource. If the refinery needs to call for additional assistance from a nearby fire department’s fireboats, the delay could be several hours, according to state fire officials.

National Oil Spill Response Resource Inventory. Each Coast Guard Captain of the Port has emergency contracting authority to obtain needed resources. The National Strike Force’s Response Resource Inventory lists public and private organizations that can provide these needed spill response resources. The Coast Guard is to review these organizations’ resources at least every 3 years to keep an up-to-date resource list. Again, in some cases delay in getting these needed resources to the incident location would occur.

In addition to the differences in the availability of marine firefighting equipment, we found that access to marine firefighting training, which is highly specialized and different from land-based firefighting, can be limited because of distance from a training center or lack of resources. While a range of locations provide firefighter response training for energy commodity fires in the marine environment, these facilities are limited and are sometimes not located near a firefighting response organization that is seeking this training. Some local emergency responders told us they have not received shipboard firefighting training, which is even more specialized than general marine firefighting, and many of the responders we contacted identified the need for additional training. At one port we visited, fire department officials stated that the firefighters had not received this training but would board a burning vessel. See figure 18 for an example of firefighters training to combat an aviation fuel fire.

We also found differences in training for federally established procedures outlining coordination—known as the incident command system (ICS)— for responding to any incident, including terrorism. Some emergency responders identified a lack of experience and training on this system as a potential concern for effectively coordinating and leading a response to an attack. The Coast Guard and fire departments are familiar with ICS because they were using it before September 11, 2001, but law enforcement does not have equivalent experience with it. At the ports we visited, the local Coast Guard and firefighting responders identified themselves as generally compliant with ICS training requirements. Although the FBI would have jurisdictional responsibility for leading the multiagency response to a terrorist attack on a tanker, FBI personnel did not have to comply with ICS training requirements until December 31, 2006.

Interoperable Communications

At the ports we visited, officials identified the lack of fully interoperable communications as an ongoing issue, as did many of the after-action reports we reviewed. Spill and terrorism responders may have difficulty coordinating their emergency response if their communications systems are not interoperable—that is, one agency’s equipment may not be able to communicate with another’s. For example, according to local emergency planners, during one port exercise in 2006 the responders used their cell phones because of interoperability problems. This workaround may be adequate during an exercise, an FBI official noted, but responders may not be able to rely on the cell phone communications network during an actual event. While interoperability is a problem for emergency responders throughout the nation, responders in the marine environment face additional challenges. These include the need for additional equipment on or near ships so that radio signals can get through to the ship’s hold, as well as marine band radios for operating on water.

Response organizations have some options to work around the problem of interoperability. For example, the FBI can use a range of equipment to coordinate the signals of all the various responding agencies’ communications equipment, but it takes some time to make this equipment operational because the equipment has to be brought to the site, and each responding organization has to provide a radio to the same location for the workaround system to function. The Coast Guard also has communications equipment for interoperability stored in locations around the nation, but again, there would be a delay in getting this equipment to the site of an incident.

DHS Grants May Become More Accessible for Response and Recovery Projects, but Funding Decisions Require Better Application of Performance Measures

For ports that may be facing resource shortfalls, finding ways to pay for improvements and enhancements is an issue. One potential funding source is DHS’s Port Security Grant Program. In the past, most DHS grants awarded to ports were for terrorism prevention and detection projects (such as fences, cameras, and security systems), rather than for response and recovery projects, according to DHS officials. For some states that contain ports we visited, officials who oversee grant resource distribution also told us that only a limited number of post-incident response project applications, such as marine firefighting assets or shipboard firefighter training, have received grant funding.

This emphasis on prevention and detection is changing. Recent changes in the grant program are more likely to result in consideration of response and recovery projects, according to DHS officials. They told us that the DHS Port Security Grant Program is undergoing a fundamental shift from a facility security focus to a more comprehensive approach to managing risk within ports. The Office of Grants and Training, within the Preparedness Directorate, is working with the Coast Guard to develop an integrated, risk-based decision-making process for allocating grant funds for each port area. This shift in strategy recognizes that port security entails not only prevention and detection activities but also response and recovery capabilities. Plans for fiscal year 2007 grant guidance will place more emphasis on post-incident response projects, according to DHS officials. The SAFE Port Act of 2006 likewise emphasizes a risk-based approach for port security grants.

To make effective judgments about such projects, performance measures are needed to quantitatively determine the spill and terrorism resources that should be available. Such measures help decide the extent to which a given resource is needed to effectively conduct a response within a given time period. At the time of our review, DHS was surveying available emergency response capabilities within a given port, according to officials from DHS’s Office of Infrastructure Protection.

In September 2006, the New York City Fire Department Chief of Counterterrorism and Emergency Preparedness questioned whether the nation is prepared for an emergency and called for performance measures that emphasized (1) capability (What can we do?), (2) capacity (How much can we do?), (3) proficiency (How well can we perform?), and (4) deployment (How quickly can we deploy capabilities?). As we have previously reported, in the absence of comparable standards for emergency responder performance, it is difficult to assess whether grant resources will be directed effectively to reduce risk. Without such performance measures, the federal government would not be able to conduct an analysis, based on reducing overall risk, that could be used to set priorities for acquiring needed response resources. Performance measures are critical for setting priorities to effectively allocate federal funds.

The Captain of the Port may assist local authorities in reviewing the adequacy of the port’s overall marine firefighting and salvage capability. Such qualitative reviews assess a range of factors related to the nature of operations within the port. However, these assessments cannot set priorities for addressing these shortfalls because they do not have quantitative performance measures that would provide a way to compare one shortfall against another to determine such priorities. Other related assessments face the same priority-setting issues. A recent qualitative advisory report for siting a potential future LNG facility illustrates this problem. The assessment identified the need to send firefighters to specialized fire schools on an annual basis to become trained in fighting LNG fires, as well as to provide local firefighters with additional training on hazardous materials and confined space rescue. The assessment also identified a range of equipment procurement needs, including additional fireboats capable of mitigating a large LNG spill on water as well as dry chemicals and foam caches for extinguishing any resulting fire. While all these shortfalls may need to be addressed, the assessments do not provide a road map for setting federal funding priorities.

Conclusions

The ship-based supply chain for energy commodities remains threatened and vulnerable, and appropriate security throughout the chain is essential to ensure safe and efficient delivery. The threats are especially strong internationally, where the United States faces limitations in ensuring that facilities in foreign ports are meeting security standards and in protecting shipments in international waters. Domestically, the nexus for strengthening security efforts rests with the U.S. Coast Guard, which has primary responsibility for security actions in U.S. ports and waterways. Despite considerable efforts to protect ports and the energy traffic in them, the level of protection is not where the Coast Guard believes it should be. At some ports Coast Guard units are not meeting their own levels of required security activities. Growing demand for Coast Guard resources requires that the Coast Guard take action on several fronts. In adjusting security standards to take into account its limited resources, the Coast Guard needs to assure itself and other stakeholders that its adjustments are based on a careful assessment of risk. This process has begun with the Coast Guard’s ongoing assessment of risks associated with all CDC commodities, and since this assessment is already under way, we do not see a need to make a recommendation in this case. The results of that study, and of any comparative analysis that includes hazardous materials not on the CDC list, will be important in a careful and dispassionate analysis for ensuring that available resources are deployed in such a way that commodities receive protection commensurate with the relative risks involved. This is especially important with the expected growth in LNG imports. Similarly, we believe that the results of the risk analyses stemming from use of the Maritime Security Risk Assessment Model will be important in determining how field units can best make use of security resources at their ports. With the ability to compare different targets and different levels of protection offered by security stakeholders, the model should allow the Coast Guard to take a more complete accounting for the various risks at U.S. ports. These two efforts are vital inputs that are needed to ensure an accurate reflection of security risks to tankers and the ports that receive them.

Local Coast Guard units have been active in preparing for the coming growth in LNG shipments, engaging with local law enforcement agencies as a means to augment Coast Guard resources. The assistance the Coast Guard already receives from state and local law enforcement is vital for many units as they try to meet security activity requirements with limited resources. Coast Guard headquarters, however, needs to do more to help these local efforts. More specifically, it needs to begin centralized planning for how to address resource shortfalls across many locations. As LNG facilities continue to multiply, the resulting increase in workload will affect some Coast Guard units but not others, necessitating a centralized response as well as a port-specific one. It is important for the Coast Guard to begin this centralized planning soon, when attention can also be paid to assessing the options for partnering with state or local law enforcement agencies to ensure appropriate security. This broader planning is important for ensuring a proper distribution of resources to best meet the Coast Guard’s diverse responsibilities.

In the event of a successful attack on an energy commodity tanker, ports would need to provide an effective, integrated response to protect public safety and the environment, conduct a terrorism investigation, and restore operations in a timely manner. Consequently, clearly defined and understood roles and responsibilities for all stakeholders who would need to respond are needed to ensure an effective response. Operational plans for the response, among the various levels of government involved, should be explicitly linked. As we have reported previously, it is essential that these roles and responsibilities be clearly communicated and understood. Furthermore, while we recognize that ports may have exercise priorities other than responding to a terrorist attack on a tanker, we believe that combined spill and terrorism response exercises should be considered and pursued in ports that are considered to be at risk. In addition, national- level guidance has generally suggested that ports plan for mitigating the economic consequences of an attack. In implementing the post-incident recovery portions of the SAFE Port Act, DHS has an opportunity to provide specific guidance for how ports could plan for lessening potentially significant economic consequences, particularly if an attack results in a port closure. Finally, DHS has just begun to focus more on providing funding for response resources through the Port Security Grant program. However, DHS cannot be assured that it will appropriately target funding to the projects that most reduce overall risk because it has not developed quantitative performance measures. These measures would allow DHS to set priorities for funding on the basis of reducing overall risk. To make effective judgments about such projects, performance measures are needed to quantitatively determine the spill and terrorism resources that should be available.

Recommendations for Executive Action

We recommend that the Secretary of Homeland Security direct the Commandant of the Coast Guard to take the following actions: Develop a national resource allocation plan that will balance the need to meet new LNG security responsibilities with other existing security responsibilities and other Coast Guard missions. This plan needs to encompass goals and objectives, timelines, impacts on other missions, roles of private sector operators, and use of existing state and local agency capacity.

Develop national-level guidance that ports can use to plan for helping to mitigate economic consequences, particularly in the case of port closures.

We also recommend that the Secretary of Homeland Security direct the Commandant of the Coast Guard and that the Attorney General direct the Director of the Federal Bureau of Investigation to work together to take the following two actions: At the national level, help ensure that a detailed operational plan has been developed that integrates the different spill and terrorism response sections of the National Response Plan.

At the local level, help ensure that spill and terrorism response activities are integrated for the best possible response by maximizing the integration of spill and terrorism response planning and exercises at ports that receive energy commodities where attacks on tankers pose a significant threat.

We recommend that the Secretary of Homeland Security work with federal, state, and local stakeholders to develop explicit performance measures for emergency response capabilities and use them in risk-based analyses to set priorities for acquiring needed response resources.

Agency Comments

We provided a draft of this report to the Departments of Defense, State, Justice, and Homeland Security, including the Coast Guard, for their review and comment. These departments provided formal written comments, except for the Department of State, which provided oral comments. The Department of Defense, in its written comments, concurred with our recommendations. The Departments of Justice, through the FBI, and Homeland Security generally concurred with our recommendations and provided specific comments on the recommendations that are detailed below.

Regarding our recommendation that the Coast Guard develop a national resource allocation plan that takes into account new LNG security responsibilities along with its other mission demands, DHS generally concurred. It stated, however, that while it agrees with the need to address resource demands based on forecasted increases in LNG imports, it also stated that LNG was one of many Certain Dangerous Cargoes that add risk to the maritime environment, and the Coast Guard would address the risk from CDCs as a whole. We agree that there are other dangerous cargoes and it is logical for the Coast Guard to review them holistically in targeting its resources to where the risks are greatest. On the basis of its comments, the Coast Guard plans to examine the risk caused by dangerous commodities, and to take a number of steps to allocate resources. We will monitor the Coast Guard’s actions to see if these actions, collectively or in combination with a plan, allow it to optimally allocate its limited resource to meet growing security requirements along with its various other mission needs. Such a plan is important to ensure the best distribution of resources to meet the Coast Guard’s diverse responsibilities.

Regarding our recommendation to develop national-level guidance to help ports plan how to mitigate economic consequences, particularly in the case of port closures, DHS generally concurred. It stated that its experience from Hurricane Katrina showed that disruptions to the maritime transportation system can have significant economic impacts and that these impacts need to be considered during recovery actions. It also stated that the Coast Guard, in partnership with CBP, is currently engaged in a broad effort to improve maritime recovery planning. While information on this effort was not provided to us during our review, according to its comment, the Coast Guard seems to recognize the problem and is taking action to address the basis of our concern.

Regarding our recommendation to develop a detailed national operational plan that integrates spill and terrorism sections of the National Response Plan, both DHS and FBI generally concurred. They both stated, however, that the NRP itself already serves as the basis for integrating such response planning, and the FBI did not concur with the need to develop a separate operational plan. As we have noted in prior reports, effective planning and coordination require the development of detailed operational plans for response. While the NRP serves as a strategy-level doctrinal document, it is not an operational plan. We remain concerned that an intentional attack on an energy commodity tanker in a U.S. port may not be met by the best possible response without such a plan to direct the specific circumstance when both the spill and terrorism response sections of the NRP must be integrated and implemented simultaneously. Without a detailed operational plan for this situation, effective and efficient law enforcement investigation and environmental consequence mitigation may be hindered. As we have recently reported, the implementation of the NRP following Hurricane Katrina identified concerns with coordination within and between federal government entities using the NRP. Further, the October 2005 draft version of the MOTR called for DHS and DOJ to develop specific, detailed supporting operational plans for their responsibilities, in close consultation with other departments and agencies. However, this requirement was dropped from the October 2006 final version of the MOTR. As a result, no detailed operational plans exist for the situation described in the response section of this report. We believe our recommendation will help fill the guidance gap between doctrine and port-level operations.

Regarding our recommendation to maximize terrorism and spill response planning and exercises at the local level for the best possible response, DHS generally concurred and FBI concurred. DHS said that while these efforts must be coordinated they need not be an amalgamation. It stated that there are opportunities for this coordination at the local committees that are responsible for planning terrorism and spill response and because the Coast Guard serves as chair for both committees, coordination already occurs. In its comments FBI listed exercises that combined terrorism and spill response. It also stated that local Maritime Liaison Agents were specifically directed to engage agency partners to ensure integration of FBI response. While these actions are beneficial for increased integration, there is no direct link between the actual local terrorism plan and spill response plan. Also, because terrorism response plans have distribution limited to those who need to know, many nonsecurity stakeholders— particularly in the spill response community—would not have access to these plans in an emergency, allowing for the possibility for these stakeholders to take actions that may hinder terrorism response.

Regarding our recommendation that the Secretary of Homeland Security work with federal, state, and local stakeholders to develop explicit performance measures for emergency response capabilities, DHS responded that it was taking the recommendation under advisement and was exploring approaches to address our recommendation. We will follow up with DHS later to get its formal position on this recommendation.

All of the respondents provided technical comments that we incorporated into the report as appropriate. Written comments from DHS are reproduced in appendix V, written comments from FBI are reproduced in appendix VI, and written comments from the Department of Defense are reproduced in appendix VII.

As arranged with your office, unless you publicly announce its contents earlier, we plan on no further distribution of this report until 30 days after its issue date. At that time we will send copies of this report to the Secretary of Homeland Security, the Commandant of the U.S. Coast Guard, and the Attorney General. We will also make copies available to others at no charge at GAO’s Web site at http://www.gao.gov.

This report was prepared by two teams within GAO, each of which concentrated on particular aspects of the assignment. If you or your staffs have any questions regarding (1) the types of threats to tankers carrying energy commodities and (2) the measures being taken to protect tankers and the challenges federal agencies face in making these actions effective, please call Stephen L. Caldwell at (202) 512-9610, or caldwells@gao.gov. For questions regarding (1) the potential consequences of a successful attack on tankers or energy infrastructure or (2) the plans in place and the potential challenges in responding to an attack, please call Mark Gaffigan at (202) 512-3841, or gaffiganm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix IX.

Appendix I: Objective, Scope, and Methodology

The objectives of this report were to (1) determine the types of terrorist threats to tankers carrying energy commodities and the potential consequences of a successful attack; (2) describe what measures are being taken both internationally and domestically to protect these tankers, and what challenges, if any, federal agencies face in making these actions effective; and (3) if a terrorist attack succeeds despite these protective measures, describe what plans are in place to respond and discuss the potential challenges federal agencies may face in responding to a future attack.

To determine the types of terrorist threats to tankers carrying energy commodities, we conducted interviews with maritime intelligence officials from the U.S. Coast Guard and Navy at the National Maritime Intelligence Center. We also met with Coast Guard and Customs and Border Protection officials at headquarters and in the field responsible for port and vessel security to determine their views about maritime terrorism related to energy tankers and infrastructure. During site visits to domestic ports, we also interviewed operators of petroleum waterside facilities and tankers to determine their understanding of the threat environment. We also met with shipping and vessel management companies to discuss their views of the threats they face at foreign loading ports and while in transit to the United States. To gain an international perspective on threats to tankers and loading facilities, we conducted interviews with officials from international maritime organizations, international shipping and petroleum trade associations, vessel operators, vessel insurers, and private security and risk management organizations. We also reviewed classified intelligence documents, including port threat assessments, and government directives related to maritime security.

Continuing with our first objective to describe the potential public safety, environmental, and economic consequences of a successful terrorist attack on a waterside energy facility or tanker, we met with officials from the Department of Energy, the Environmental Protection Agency, the U.S. Maritime Administration, the Coast Guard, and the Federal Energy Regulatory Commission. In addition, we conducted a panel study with academic and industry experts to specifically determine the consequences of an attack on a liquefied natural gas (LNG) tanker. We also visited major petroleum, LNG, and liquefied petroleum gas terminals to discuss possible consequences of attacks at these locations. We also analyzed import data from U.S. government sources for petroleum and other energy commodities into the United States and the ports receiving the imports. Finally, we reviewed published information, such as studies and scholarly articles, to determine the environmental and public health and safety consequences of a terrorist attack to a petroleum waterside facility or tanker.

To describe measures that are being taken to protect these tankers, and what challenges, if any, federal agencies face in making these actions effective, we interviewed a variety of foreign and domestic government officials and private industry representatives. To determine the actions taken in foreign nations, we visited four countries. The selection criteria for our overseas site visits were the amount of energy commodities exported to the United States and the opportunity to learn about maritime anti-terrorism best practices. At the countries we visited we conducted interviews with government officials responsible for maritime security activities and petroleum waterside facility and tanker operators. We also obtained information from the Coast Guard, international maritime organizations, tanker operators, vessel management companies, and insurers to understand port and vessel security practices and procedures overseas and while tankers are in transit to the United States.

To determine the actions taken domestically, we met with officials in the Departments of Homeland Security, Defense, State, Energy, Transportation, and Justice; private sector facility and vessel operators; and state and local officials dealing with homeland security, emergency response, and law enforcement.

We also conducted site visits to a nonprobability sample of petroleum and liquefied gas import and export facilities in the United States. During our site visits we observed security practices and conducted interviews with representatives of federal agencies that oversee the security of the energy facilities, as well as facility security officers and relevant local and state law enforcement officials. The information obtained from these site visits cannot be generalized to all petroleum and liquefied gas import and export facilities nationwide.

We also reviewed government and industry documents and data sources relevant to domestic actions taken by agencies and companies to prevent terrorist attacks. To establish criteria for evaluating the Coast Guard’s ability to mitigate the risk of maritime terrorism, we obtained 9 months of Operation Neptune Shield (ONS) Scorecard security performance data— the Coast Guard’s performance measurement tool for tracking performance in meeting security activities at the nations most strategically important ports—from select Coast Guard field units covering the months of November 2005 through July 2006. We chose to review scorecard data for ports that the U.S. Maritime Administration identified as being top ports for receiving energy commodity tankers. We calculated the ONS 9- month average of both the monthly activity requirement attainment percentages and share of workload conducted by other government agencies. In conducting this work, we met with Coast Guard headquarters personnel on several occasions to further our understanding. We also asked Coast Guard officials responsible for the scorecard data what steps they took to ensure the reliability of the data and determined that they were sufficiently accurate for our purposes.

To describe what plans are in place for responding to a terrorist attack, should one occur despite protective measures, and discuss the challenges federal agencies may face in responding, we conducted interviews with officials from the Departments of Homeland Security and Justice; the Environmental Protection Agency; as well as officials representing port authorities, state and local offices of public safety and emergency management, oil and gas facilities, and first responders, including police and fire departments. These interviews were conducted to identify spill, terrorism, and economic response plans and priorities; mechanisms for response coordination; access to resources; training availability; types of exercises conducted; potential communications challenges; performance metrics; and information-sharing systems. During our site visits, we observed port operations and the working relationships between some government and private stakeholders. To assess the integration of national and local spill and terrorism response plans, we gathered and reviewed identified plans. Finally, we interviewed emergency response officials and reviewed after-action reports to identify best practices and lessons learned as a result of emergency response exercises and incidents.

We conducted our work from April 2005 to February 2007 in accordance with generally accepted government auditing standards.

Appendix II: Selected Energy Commodities Transported by Tanker into United States

Crude Oil

Crude oil is used to produce a wide array of petroleum products, including gasoline, diesel and jet fuels, heating oil, lubricants, asphalt, plastics, and many other products used for their energy or chemical content.

Crude oils range from very light (high in gasoline) to very heavy (high in residual oils). Sour crude is high in sulfur content. Sweet crude is low in sulfur and therefore often more valuable than other kinds.

Gasoline

A complex mixture of relatively volatile hydrocarbons with or without small quantities of additives, blended to form a fuel suitable for use in spark-ignition engines.

Motor gasoline includes conventional gasoline; all types of oxygenated gasoline, including gasohol; and reformulated gasoline, but excludes aviation gasoline.

Jet Fuel

A refined petroleum product used in jet aircraft engines.

Kerosene-type jet fuel is used for commercial and military turbojet and turboprop aircraft engines.

Naphtha-type jet fuel is used primarily for military turbojet and turboprop aircraft engines because it has a lower freeze point than other aviation fuels and meets engine requirements at high altitudes and speeds.

A natural gas that has been cooled to minus 260 degrees Fahrenheit to a liquid state so that it can be transported.

Consists almost entirely of methane (85-95 percent) along with small concentrations of ethane, propane, butane, and trace amounts of nitrogen.

Mainly used as fuel for electricity generation, home heating, industrial manufacturing, and, to a lesser extent, motor vehicles.

Group of hydrocarbons, such as propane and butane, derived mainly as a byproduct of oilfield production and crude oil refining processes.

The vast majority of LPG traded internationally consists of propane and butane cargo.

LPG has a variety of agricultural, household, petrochemical, and, to a lesser extent, vehicle fuel applications.

Appendix III: Recent High-Profile Terrorism Incidents against Tankers and Energy Infrastructure

Shell Gas Facility, Nigeria

Nigerian militants attacked an energy facility and abducted foreign oil workers in the oil-rich Niger delta. The Movement for the Emancipation of the Niger Delta is responsible for a wave of militant attacks in Nigeria.

Two cars packed with explosives tried to attack a major oil processing facility in Saudi Arabia’s eastern province. Al Qaeda suicide attackers were killed along with two Saudi guards.

Closely timed suicide boat attacks on northern Persian Gulf oil terminals in Iraq left two Navy sailors and one Coast Guardsman dead and five others injured.

The Free Aceh Movement claimed responsibility for hijacking the M/V Penrider, a fully laden tanker shipping fuel oil in Southeast Asia. Three hostages were eventually released following a ransom payment.

Ten pirates boarded tanker from a speedboat. Pirates took the helm, altered the speed, disabled ship’s radio, and steered the vessel for an hour. Pirates left with cash and abducted captain and first officer.

Small boat filled with explosives rammed the side of the French-flagged oil tanker Limburg as it was approaching the Ash Shihr Terminal several miles off the coast of Yemen. The suicide attack killed one crew member and 90,000 barrels of oil spilled.

Appendix IV: Assessing and Managing Risks Using a Risk Management Approach

Risk management is a systematic approach for analyzing risk and deciding how best to address it. Because resources are limited and cannot eliminate all risks, careful choices need to be made in deciding which actions yield the greatest benefit. Figure 19 depicts a risk management framework that is our synthesis of government requirements and prevailing best practices previously reported. To be effective, this process must be repeated when threats or conditions change to incorporate any new information to adjust and revise the assessments and actions.

Setting strategic goals, objectives, and constraints is a key first step in implementing a risk management approach and helps to ensure that management decisions are focused on achieving a strategic purpose. These decisions should take place in the context of an agency’s strategic plan that includes goals and objectives that are clear, concise, and measurable.

Risk assessment, a critical step in the approach, helps decision makers identify and evaluate potential risks so that countermeasures can be designed and implemented to prevent or mitigate the effects of risk. Risk assessment is a qualitative and/or quantitative determination of the likelihood of an adverse event occurring and the severity, or impact, of its consequences. Risk assessment in a homeland security application often involves assessing three key elements—threat, criticality, and vulnerability: A threat assessment identifies and evaluates potential threats on the basis of factors such as capabilities, intentions, and past activities.

A criticality or consequence assessment evaluates and prioritizes assets and functions in terms of specific criteria, such as their importance to public safety and the economy, as a basis for identifying which structures or processes are relatively more important to protect from attack.

A vulnerability assessment identifies weaknesses that may be exploited by identified threats and suggests options to address those weaknesses.

Information from these three assessments contributes to an overall risk assessment that characterizes risks on a scale such as high, medium, or low and provides input for evaluating alternatives and management prioritization of security initiatives.

The next two steps involve deciding what mitigation measures to adopt. Alternatives evaluation considers what actions may be needed to address identified risks, the associated costs of taking these actions, and any resulting benefits. This information is provided to agency management to aid in completing the next step—selecting alternative actions best suited to the unique needs of the organization.

The final step in the approach involves implementing the selected actions and evaluating the extent to which they mitigate risk. This involves developing criteria for monitoring the performance of these actions and follow-up to ensure that these actions are effective and reflect evolving risk.

Risk management has received widespread support from Congress, the President, and the Secretary of Homeland Security as a tool that can help set priorities and inform decisions about mitigating risks.

Appendix V: Comments from the Department of Homeland Security

Appendix VI: Comments from the Federal Bureau of Investigation

Appendix VII: Comments from the Department of Defense

Appendix VIII: GAO Contacts and Staff Acknowledgments

GAO Contacts

Staff Acknowledgments

In addition to the contacts named above, Jonathan Bachman, Jason Berman, Steven Calvo, Jonathan Carver, Frances Cook, Frank Chase Cook, Amy Higgins, David Lysy, Jean McSween, Erica Miles, Jobenia Odum, Josh Ormond, Janice Poling, Franklin Rusco, Peter Singer, Carol Shulman, Stan Stenerson, Barbara Timmerman, James Turkett, JimWells, and Margaret Wrightson made key contributions to this report.

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