Brittle Power- PARTS 1-3 (+Notes) - Natural Capitalism Solutions

Chapter Nine: Oil and Gas 111• bigger terminals with higher unloading rates, “resulting in a concentration ofhighly combustible products and crude supply into a relatively small area.”To this list might be added a recent structural change in the refining business.The 1980–82 slump in oil demand, and the prospect that it will be permanentbecause people are using oil more efficiently, has caused an unprecedentedrate of permanent closure of surplus refineries, 102 mostly relatively smalland dispersed ones near local markets. As a result, reliance on the largest, mostcentralized, most geographically clustered refineries has increased. The survivingrefineries, then, tend to be the largest and newest—precisely those thatembody the trends listed above. A more volatile set of trends is hard to imagine,even in the absence of deliberate attacks to exploit these weaknesses.Nor is refinery sabotage a mere fantasy. Many attacks have occurred inother countries; the world’s largest refinery—at Abadan in Iran—has been a keytarget for Iraqi attack since 1980. Even in the U.S., such incidents are notunknown. In 1970, for example, the “United Socialist Revolutionary Front”caused “millions of dollars” in damage to four units of the Humble refinery inLinden, New Jersey. 103 The national disruption from refinery outages could bemaximized by careful selection of the targets, since U.S. refinery flexibility isunusually low. 104 Flexibility could be improved through overcapacity. In fact,this is currently the case—in March 1982, refinery utilization was at an all-timelow of about sixty-three percent. 105 But the cost of that inadvertent spare capacityis far higher than the industry would ever incur intentionally.In the coming decade, too, as the oil-exporting countries sell more of theiroil as refined products rather than as crude, 106 their market power will increaseand importers’ flexibility will decrease. The remaining crude oil will becomea more powerful bargaining chip as importers strive to find feedstock for theircostly refineries. And of course many new export refineries comparable toAbadan will fatten the list of tempting targets in the Mideast.Natural gas processing plantsNatural gas processing plants, analogous to (though simpler than) oil refineries,are a similar point of weakness. Some have already been sabotaged. TheBlack September group blew up two such plants in Rotterdam in 1971. 107 InMay 1981, fifty heavily armed rightists also took over, and threatened to blowup, a remote Bolivian gas processing plant owned by Occidental PetroleumCompany, but after several days’ negotiations they left for Paraguay. 108Unlike crude oil refining, gas processing is not an absolutely vital step inthe short term, and can be temporarily bypassed. 109 But this cannot be long