Pirates may seem like an issue of the past, but in some parts of the world, they’re still a very real threat to ships, especially those carrying valuable cargo like oil and gas. Because oil tankers are traditionally older, larger ships, they don’t have the speed like the smaller speedboats of the pirates do. They also don’t often carry weapons, whereas pirates will board ships with machetes and guns, then incapacitate the crew so they can have easy access to the oil. Not only does the piracy of tankers harm the oil and gas industry, it harms the lives of those who work on these ships and also the people and environment around where the ships travel.
The biggest hotspot of pirate attacks against oil tankers occurs in the South China Sea. Many tankers travel in this area, shipping oil amongst the hundreds of islands. Due to the high density of waterways and islands, pirates have taken advantage of these conditions. Sophisticated organizations have been established and grown much longer, so they can plan elaborate attacks, often multiple times in a week, against oil tankers, taking millions of dollars over a few attacks.
It’s possible that the pirates began as simple fishermen in the area who were driven by desperation to make some quick money. Unfortunately, highjacking these oil ships is incredibly lucrative, so a huge organized crime system has developed around it, pushing more and more people to turn to piracy in exchange for the rewards it offers.
The South China Sea also isn’t the only location where oil tankers are targeted. In the waters around Africa and even the Red Sea, pirates attack tankers and make off with the oil barrels, usually boarding the ship, typing up or killing the crew, then transporting the barrels onto another boat. The media has pulled back on reporting these incidents of piracy, but experts warn that it continues at a high rate and transporters should not become complacent and let their guards down.
Various issues exist with this oil tanker piracy, including the monetary loss of the oil stolen. Along the Somali coast, hundreds of attacks occur, which cost the oil and gas industry upwards of $1 billion. There’s also the threat to human life, primarily that of the crew, who are often held at gunpoint once the pirates board their ships and then left to drift around in the ocean after their communications are destroyed – if they’re lucky. Some crews are simply killed. There’s also the threat of the ship crashing into land or another boat if no one is left to safely navigate it. A possibility of a spill exists as well, if inexperienced pirates are transporting large amounts of oil, or leaving oil on an abandoned ship.
Despite having its roots in US energy production dating back to the early 1900s, fracking has long been looked at as an unconventional and perhaps temporary means of producing natural gas and oil within the United States.
I’ve written in the past on TonyVanetik.com about how fracking was conceived and how the process actually plays out, disspelling some of the fears around the process of collecting oil and gas within the United States. For at least 65 years, it has been used in a commercial capacity, helping to reduce the United States’ dependence on foreign oils and spur on the surge in domestic energy production. While the process does present environmental concerns when done at enormously high volumes, fracking has allowed for tremendous increases in US energy, revolutionizing the energy industry as a whole.
Fracking has reduced the cost of energy production hugely across the nation–the so called fracking revolution has caused gas prices to drop by about 47% according to Brookings. Fracking wells as a whole produced the good majority of US natural gas across the nation–two third according to the Energy Information Association.
In short, the fracking boom has hugely influenced the US economy and energy production. Few people will debate the large-scale economic benefits of increasing nationwide fracking, environmental concerns aside. But how does fracking affect local economies?
Even in scenarios in which the national economy is bouncing back or doing well at large, there are always struggling local economies. Without a booming populous or a bustling business center, some small cities and towns struggle to keep themselves afloat. Fracking, though, in areas in which shale is a valuable resource, can be the answer.
According to two Duke energy experts who studied the matter, fracking’s local benefits are enormous and unparalleled. The local government in Weld County, home to the largest shale deposit in Colorado, has brought in $110 million in property tax revenue since the shale boom. This money, combined with severance tax allocations from the government has allowed Weld County to put millions back into the school system, strengthen the police and local businesses, and rebuild roads within the county.
Weld County isn’t an exception either, similar benefits in local economies have been recognized almost universally where fracking is found. With the continued pressure to strive for energy independence within the United States, fracking is likely here to stay, much to the benefit of the economy at both the micro and macro levels.