report - Oceans Beyond Piracy

THE ECONOMIC COST OF SOMALI PIRACY, 2012
Combined Task
Force
CTF 151 is a multi-naval task force established in January 2009. It conducts
operations under a mission-based mandate of the Combined Maritime Forces
(CMF). Its goal is geared toward deterrence, disruption and suppression of piracy
off of the coast of Somalia and the Gulf of Aden. The CTF headquarters is located
in Bahrain.
Administrative Costs 2012: ~5.7
million, 14 contributing nations include:
Australia • Bahrain • Pakistan
Republic of Korea • Singapore •
Turkey United Kingdom • United States
All told, the total administrative cost of the “big three” naval missions was around $22.8 million in 2012. Yet the
administrative costs of these missions pale in comparison to their overall cost. For example, according to a senior
military representative who wished to remain anonymous, the EU NAVFOR operation costs its member states
close to $1.96 billion a year, 40 of which $11.4 million were common administrative costs. 41 The reason for this
discrepancy is that the operational costs of these missions are allocated using the principle that “costs lie where
they fall.” For example, the fuel and personnel costs of a Danish warship operating as part of NATO Operation
Ocean Shield would be borne by the government of Denmark alone, despite the fact that the Danish asset in
question is being used as part of an international operation. Thus only the administrative costs described above
are shared costs. For that reason, the vast majority of costs incurred by militaries are due to the deployment and
operation of surface and support vessels.
B. Cost of Naval Vessel Deployment
In addition to the administrative costs described above, deployment of surface vessels and manned surveillance
aircraft comes with significant costs. To determine the cost of naval vessel deployment, we considered vessel
fuel costs and daily operating costs. We attempted to estimate these costs from publicly available information
utilizing the most conservative numbers. For example, we counted the lowest possible number of vessels
deployed on a daily basis, even though it is extremely likely that the actual average was considerably higher.
Additionally, we do not consider additional costs associated with the transits from the Indian Ocean to the
asset’s country of origin and vice-versa.
To estimate the cost associated with fuel consumption, we converted fuel use into common units of
measurement and simply multiplied daily fuel consumption by fuel price. We were unable to calculate each
vessel’s fuel consumption specifically because exact information was not available. Rather, we used publicly
available information on certain classes of vehicles and used those statistics as proxies for all vehicles in a given
class. 42
Vessel Type
Average Number
Deployed
Average Pre-Tax Fuel Price
(per gallon)
Adjusted* Daily Fuel
Consumption (gallons/day)
Total Annual Fuel
Cost
Frigate 8 $3.97 21,641* $206,191,189
Destroyer 7 $3.97 49,091* $409,271,667
Auxilary 2 $3.97 12,360* $29,441,520
Patrol/Reconnaissance Aircraft 6 $3.97 6,335** $45,269,910
Helicopter 4 $3.97 190*** $905,160
TOTAL 27 89,617 $691,079,446
*24 hours/day, 300 days/year **5 hours/day, 300 days/year ***4 hours/day, 300 days/year
To calculate daily operating costs, we began with an estimate – informed by discussions with individuals with
intimate knowledge of naval operations – that the monthly operating cost of a frigate is $1,564,400 with an
average of 230 sailors on board. From that calculation, we assumed that the operating cost of a vessel was
roughly proportionate to the number of seafarers aboard and concluded that the total operating cost for all naval
assets in 2012 was $335,865,600. 43
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15
a project of One Earth Future Foundation