Maritime Commons attended the Area Maritime Security Committee meeting for the members at large to provide you with a wrap-up of what was covered by Coast Guard presenters. Remarks from presenters centered on developing threats and cyber in the maritime domain.
Coast Guard Commandant, Adm. Paul Zukunft spoke on the Coast Guard Cyber Strategy which was just released Tuesday, a Coast Guard presenter provided remarks on developing issues and threats in the maritime domain to include waterway changes, impacts of the Energy Renaissance and the commodities market, transnational terrorists and biological incidents.
For those of you who were unable to attend the Area Maritime Security Committee meeting, Maritime Commons summarized the comments. These remarks are not ‘as delivered’ but provide highlights for your informational purposes.
Delivered by Coast Guard Sector New York
We are assessing growth and change in waterways, such as the completion of the expanded Panama Canal, currently projected to open in January of 2016. Work also continues on the Nicaragua canal which started in late 2014 and is scheduled for completion in 2020. This canal hopes to capture 5 percent of global traffic and will alter global shipping patterns, especially those interacting with east coast ports. The Port of New York and New Jersey has seen record containers throughput this year, and growing pains come with any growth, such as congestion across facilities translating into visible traffic conditions, some of which we have experienced in New York over the past few months.
Growth, weather, contract disputes and a variety of other factors have created challenges for ports across the United States as well, including our neighbors to the north on the St. Lawrence Seaway. New York is seeking to improve infrastructure in, and leading to, the port of Albany to capture some of this commerce, along with greater traffic from the Panama Canal, which will pass through the port of New York and New Jersey.
Energy Renaissance and the commodities market
We’re also monitoring how the energy renaissance is impacting ports and waterways. With about third of the North American shale oil being produced passing through the port of Albany, and interacting with the port of New York and New Jersey, it’s important to monitor domestic production. With global oil prices falling, we may see reductions in the amount of product transiting the New York and New Jersey area. Right now, producers pumping from different extraction methods in different regions of the world have varying break-even prices. North American shale drillers operate with a break-even price around $65 a barrel. As of June 9, 2015, the global oil price was about $59.90 a barrel; if domestic producers aren’t able to make a profit, they’re going to produce less.
The take away from this is that changes in the commodities market will impact maritime traffic. For every very-large-crude-carrier that we do not utilize to import oil from a foreign destination, we may be exchanging that for 30 to 100 smaller barges to domestically transport our own oil.
With increased waterway traffic, we increase the potential for maritime causalities that have the potential to disrupt our system.
Since June of 2014, we’ve seen an increase in threats to the United States from transnational terrorists, here in the NY area.
Transnational terrorists now have a physical presence across the globe and across several areas of maritime interest that interact with or affect our ports. One related area of risk is choke points. In February 2015, the Egyptian army detected targeting of merchant vessel traffic in the Suez Canal. Further, in Yemen, on the southern approach to the Suez, fighting continues with rebels on the ground which could affect maritime traffic in the area.
The takeaway for us is that approximately 13 percent of our foreign arrivals transit the Suez Canal daily. So 13 percent of our commerce is at risk at this particular chokepoint. A problem at a maritime chokepoint half a world away can have a direct impact on our ports and economy.
At this point last year, we were just starting to hear about a small Ebola outbreak in West Africa. That outbreak did intensify and became an issue we had to address in our own ports. Thankfully, we did not see a huge footprint of Ebola in the United States, and now we are all better prepared for one of these incidents. Right now, we are hearing about an outbreak of Middle East Respiratory Syndrome in South Korea. Whether it is Ebola, MERS, or some other biological issue, these are the type of problems that have the potential to manifest very quickly. They are something we need to be taking a look at and determining how we would react to this type of threat.
In short, we have a ‘new normal’ with a higher overall threat environment that we are all going to be living with for at least the foreseeable future. Transnational terrorist organizations have increased their outreach, especially on social media, influencing others to join their cause. Continued port growth is going to produce greater risks. Changing patterns of maritime traffic or economic activity will affect our ports. Our risks have changed and increased and they range from biological incidents, cyber attacks, maritime chokepoint attacks or even the change in commodity prices; all of these have real potential to change how we do business.
This blog is not a replacement or substitute for the formal posting of regulations and updates or existing processes for receiving formal feedback of the same. Links provided on this blog will direct the reader to official source documents, such as the Federal Register, Homeport and the Code of Federal Regulations. These documents remain the official source for regulatory information published by the Coast Guard.