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Oil Pirates and the Mystery Ship

Forget Somalia, the world's new epicenter of piracy is on the other side of Africa.

On January 18th, a Greek shipping firm lost radio contact with one of its vessels, a Liberian-flagged, 75,000-ton oil tanker named Kerala, when it was just a few miles off the port of Luanda, Angola. What happened next is still in dispute. But maritime experts think the Kerala's disappearance marks a dangerous new escalation of the oil-driven piracy that has increasingly tormented mariners across the infamous Bight of Benin.

Maritime hijackings off of Somalia and the rest of Africa's eastern coast are in sharp decline. But pirate attacks in West Africa have crept upward, turning the waters around the Gulf of Guinea into one of the centers of global piracy. About one out of every five reported pirate attacks last year took place in the Gulf of Guinea, the International Maritime Bureau reported, but it estimates that only about one-third of West African attacks are actually reported.

The piracy on the western coast of African bears little similarity to piracy off the east coast, however. In short, it's even more aggressive. And oil companies operating in the area, West African countries dependent on energy revenues for their fiscal well-being, and regions that rely on sub-Saharan crude such as Europe and China worry that this new breed of pirates may turn the region into a no-go zone for shippers and operators.

The Kerala's sudden disappearance came just after maritime security firms began warning of a suspicious, 200-ton tugboat prowling the waters off the Angolan coast. The Kerala's owner, Dynacom Tankers Management Ltd., began to suspect it was again a victim of piracy. A Dynacom ship was the last ship successfully taken by Somali pirates; the ship and crew were released after 10 months of captivity in March 2013.

But never before had the criminal gangs that trawl the Gulf of Guinea struck so far south, raising questions about just what had happened to the Kerala. Angolan navy officials said last week they were searching for the vessel, and warned about the threat of piracy to Angola's energy-dependent economy.

Finally, on Sunday, Jan. 26, Dynacom re-established contact with its vessel: It had indeed been hijacked, the company said. One crewmember was hurt, and "a large amount of cargo had been stolen" from the vessel, Dynacom added. International investigators were set to examine the ship, which headed for port in Ghana, to gather forensic evidence to try to use against the suspected pirates.

But the plot thickened. Angolan Navy officials now contend that the Kerala's crew faked the hijacking and headed to Nigerian waters of its own volition. The suspicious tug was just a "replica" of one used in another pirate attack nearby. "It was all faked, there have been no acts of piracy in Angolan waters," Angolan Navy spokesman Capt. Augusto Alfredo told Reuters.  Angolan officials later said the Kerala, which carried 60,000 tons of diesel, was found "empty." (The Atlantic just took a look at the conflicting claims of hoax or hijacking.)

Maritime security experts, however, question the Angolan Navy's version of events. They note with alarm that the incident appears to be a clear extension of the piracy that was once confined to the Gulf of Guinea and waters around the Nigerian Delta. It's a different brand of piracy than that which plagued the waters off Somalia: more violent, and laser-focused on stealing oil and other petroleum products that fetch millions on the local black market.

West African pirates don't usually seize vessels to hold them and their crews for multi-million dollar ransoms. The lack of a lawless coast, such as the one that still prevails across most of Somalia, makes it tough to hide massive oil tankers and their crews for months at a time while ransom negotiations are carried out.

Instead, most Gulf of Guinea piracy is essentially a maritime extension of the onshore oil theft that has plagued Nigeria for years: pirates are after cargos of refined oil products, such as the 60,000 tons of diesel in the hold of the Kerala. Ian Millen, director of intelligence at the British-based Dryad Maritime, told Foreign Policy that pirates took about 13,000 tons of diesel off the Kerala.

"This incident bears all the hallmarks of Nigerian-based refined product cargo theft," Millen added.

Indeed, some experts believe that the uptick in the number and geographical reach of pirate attacks is due in part precisely to the 2009 government amnesty for the Nigerian militants in the Niger Delta who had justified their attacks on oil infrastructure and their widespread theft of crude oil as a political protest. "With the political pretense lost, there is no longer any need for oil thieves to limit themselves to targets in the Delta," a United Nations study said.

Dryad Maritime's Millen says that in most attacks, pirates offload relatively small amounts of refined product onto costal vessels once the hijacked ship is back in Nigerian waters; the Kerala theft amounts to about 4 million gallons. That U.N. report estimates that pirates could net as much $30 million per year from black-market of the stolen oil.

The spotlight on the fate of the Kerala, and West African piracy in general, comes in part because global pirate attacks are at a six-year low, Captain Phillips notwithstanding. Attacks have fallen about 40 percent since the 2011 peak, largely because of a successful campaign against Somali pirates, which has included better industry practices, greater use of armed guards, and a robust international naval presence.

Fighting Gulf of Guinea piracy will likely be harder than the effort that has nearly shut down Somali gangs, paradoxically because countries on the West Coast of Africa are not failed states. Each country in the region can defend its territorial waters. That rules out the kind of extraordinary, U.N.-sanctioned international naval cooperation inside and out of Somali waters that marked the anti-piracy campaign in the Indian Ocean. It also rules out the use of armed guards on board ships, one of the keys to successfully limiting Somali pirates' success rate.

Still, there are some things that can be done. Nigeria's new navy chief has pledged to tackle oil theft and piracy. The European Union, which imports more oil than anyone else from the region, now has its anti-piracy program with regional states up to cruising speed; the idea is to bolster the law-enforcement abilities of regional states with under-resourced coast guards. European navies, such as the Dutch, French, and British, have also carried out training and exercises with some of their counterparts in the region. U.S. ships took part in one training mission for Nigerian commandos last fall. The U.S. Marine Corps also has a rapid-response team based in Spain that could be used to respond to piracy off West Africa.

But two of the biggest customers for sub-Saharan oil, the United States and China, aren't likely to send in their navies in the same way they have in the Indian Ocean, dispatching frigates and forming standing task forces. That's partly because much of West African piracy takes place within territorial waters, not the high seas, as in the Indian Ocean.

China, which is the biggest single importer of sub-Saharan crude, made major steps in its naval operations in 2008 when it sent ships halfway around the world to fight Somali pirates around the Gulf of Aden. That on-going deployment is seen as a crucial proving ground for China's hopes of creating a blue-water navy. But despite China's reliance on crude from the region, especially from Angola, there's little chance of another Chinese anti-piracy task force heading for the Gulf of Guinea, naval experts say. Somali piracy, in other words, may be coming to an end. Angolan piracy may just be getting going.

Yasser al-Zayyat - AFP - Getty

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Recycled

If Obama's energy and trade policies sound familiar, they should.

President Barack Obama's State of the Union address Tuesday lasted for more than an hour and touched on issues ranging from immigration to pre-K childhood education. But when it came to energy and trade, two of the most important issues facing the country, Obama had very little to say.

Obama's energy and climate proposals, for instance, were largely recycled from previous years and contained virtually nothing that was entirely new.

When he addressed the joint session of Congress last year, Obama promised to start tackling climate change by using executive actions to overhaul the power sector and set strict limits on the amount of carbon emissions from electric plants. This year's speech, by contrast, offered very few original ideas for how to shift the country toward the cleaner, greener economy he talked about while running for president in 2008.

Obama instead ran through a long list of the steps federal and state governments, as well as the private sector, have taken over the last five years to cut energy prices and greenhouse gas emissions.

Principally, as the president acknowledged, those gains have come from the nation's ongoing natural gas bonanza, which has made the United States the world's biggest gas producer and led to cleaner-burning electricity and reduced greenhouse gas emissions. Obama said he would try to cut red tape to make it even easier for businesses to invest in manufacturing facilities that use gas for feedstock.

Still, Obama left an array of key details unaddressed. He spoke of the need to make sure that gas production is environmentally responsible, but didn't say what his administration would ultimately do when came to setting standards for natural-gas wells, including potential new limits on methane emissions and stricter rules regulating the chemicals used in hydraulic fracturing.

He called, vaguely, for Congress to renew the tax credits for clean energy sources like solar power that had been in place for years but fallen victim to partisan sniping on Capitol Hill. And he repeated familiar calls to end longstanding tax breaks for oil companies, now worth about $4 billion a year.

Unlike in 2011, though, there were no ambitious calls to generate the majority of U.S. electricity from clean sources of power or put a million electric vehicles on the roads. He reiterated last year's call to use federal revenues from oil production to fund development of advanced vehicle technologies, but the idea hasn't gotten any traction in the past and is unlikely to get some now. Obama's call for new tax credits for biofuels that could one day replace oil will also probably not go anywhere since the biofuels market is already struggling with falling demand for transport fuels and a glut of U.S. oil production.

The president was just as squishy on climate change. He said there was new urgency to combat the issue, but only rehashed measures designed to curb emissions from power plants by setting stricter carbon emissions limits. That push was a centerpiece of last year's State of the Union address and codified in an executive order last fall, so it -- like so much else in the speech -- wasn't a new proposal.

Obama, clearly taking a cautious path politically, also skipped past the fate of the controversial Keystone XL pipeline that would carry crude oil from Canada to the Gulf Coast. While Obama pledged to cut red tape holding up big infrastructure projects, he didn't mention that the project has already been under review for five years.

Obama's trade proposals were also largely a mash-up of the already-done and the never-will-be. The president renewed his call for new trade agreements that he said would create large numbers of jobs, but the few lines he devoted to the subject were a far cry from his 2010 goal of doubling exports over five years. U.S. exports aren't on track to meet that target. Exports have only increased by about a third since that speech and they actually fell from 2012 to 2013. Securing a trade deal that includes fast growing smaller economies could move the U.S. closer to that goal.

With that in mind, Obama called on Congress to agree to give any trade deal an up or down vote by passing "trade promotion authority," which is how past trade deals have avoided getting bogged down with revisions in Congress. Without the green light from Congress, other countries may hesitate to make concessions on the thorny issues that still need to be negotiated.

A bill creating that trade promotion authority was introduced in the Senate earlier this month, but it will face an uphill battle in the House. Michigan Democrat Rep. Sandy Levin, who sits on the powerful Ways and Means Committee, is among an array of powerful lawmakers and automobile executives who have pushed for currency controls to be included in the deal. They argue that the agreement should include some mechanism for going after countries that depress their currencies in order to make exports cheaper in the global marketplace. Many of those provisions are aimed at China, which isn't currently part of the deal, but could join later. 

Trade negotiators have been working on two agreements, one with Europe and one with Asian and Latin American countries. Negotiating over the second one, the Pacific trade deal -- with Australia, Canada, Chile, Japan, Malaysia, and Vietnam -- is further along and the administration was pushing to finish it by the end of 2013. That deadline was missed and a new one hasn't been established, but if it doesn't happen in the first half of 2014, it could be snagged by mid-term elections, as lawmakers worry that supporting a trade deal will open them up to criticism back home. The upshot is that Obama may get the trade powers he wants just when it would be too difficult for him to actually use them.

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