GCIS INTELLIGENCE BRIEFING: Coordinated Terrorist Attacks on Global Energy Infrastructure: Modeling the Risks

ISSUED BY: GCIS Communications Command Center

SOURCE: The Heritage Foundation

22March2011 9:00amEST

GCIS INTELLIGENCE UPDATE: The 2010 Heritage Energy Game demonstrated that there are significant vulnerabilities in the domestic and international energy network. Coordinated attacks by terrorists and other violent nonstate actors could cause a massive drop in oil production and price spikes that would seriously harm the U.S. and the global economies. The reality may be even harsher: wide, prolonged instability in the Middle East may threaten Saudi Arabian and other Persian Gulf oil production, including spare capacity. Careful implementation of select policies could limit the economic damage, but implementation of misguided policies could easily make such a crisis even worse. The United States and its allies would need to exercise decisive and effective leadership to deal with the crisis, but this requires the U.S. to develop an assertive international energy policy, preferably before such a crisis.

In June 2010, The Heritage Foundation conducted a simulation exercise to assess the strategic and economic impact of a major energy supply disruption caused by coordinated terrorist attacks on key nodes in the global energy infrastructure. The exercise built on two prior games conducted in 2006 and 2008[1] and included two iterations.

The purpose of the exercise was to examine the international and domestic responses to the crisis, examine the principal actors’ interactions, and simulate the effects on world oil supply, demand, and prices. Analysts at The Heritage Foundation’s Kathryn and Shelby Cullom Davis Institute for International Studies developed the simulation exercise to assess the long-term and short-term policy implications of the oil disruptions. Analysts in Heritage’s Center for Data Analysis measured the effects of these disruptions on the U.S. economy and the international oil price. Under the business-as-usual (baseline) scenario:

• Petroleum prices jump from $75 per barrel to $250 per barrel and eventually fall back to $125 per barrel after two years;
• Gasoline prices jump to $8 per gallon and remain above $4 per gallon throughout the first year;
• Gross domestic product (GDP) losses exceed $300 billion per year for both years of the crisis;
• Employment drops by more than 1.3 million the first year and drops an additional 1.1 million in the second year for a total two-year drop of 2.4 million.

(read full report)

"GCIS INTELLIGENCE UPDATE" is an intelligence briefing presented by Griffith Colson Intelligence Service, and provided to the public for informative purposes only. All subject matter is credited to it's source of origin, and is not intended to represent original content authored by GCIS, it's partners or affiliates. All opinions presented are those of the author, and not necessarily those of GCIS or it's partners.

GCIS INTELLIGENCE BRIEFING: Obama Weighs Tapping Strategic Petroleum Reserve to Counter Oil Price Spike

ISSUED BY: GCIS Communications Command Center

SOURCE: Fox News

07March2011 7:00amEST

GCIS INTELLIGENCE UPDATE: The Obama administration is considering releasing oil from the Strategic Petroleum Reserve to help Americans facing a spike in oil prices as a result of unrest in the Middle East, Obama Chief of Staff William Daley said Sunday.

The administration is considering all options when it comes to preventing the U.S. economy from backsliding as a result of recent increases in oil prices.

"The issue of the reserves is one we're considering. It is something that only is done -- and has been done in very rare occasions. There's a bunch of factors that have to be looked at. And it is just not the price," Daley said on NBC's "Meet the Press."

"I think there is no one who doubts that the uncertainty in the Middle East right now has caused these tremendous increases in the last number of weeks. ... All matters have to be on the table when you ... see the difficulty coming out of this economic crisis we're in and the fragility of it," he added.

Oil prices have skyrocketed in recent weeks, climbing to nearly $105 per barrel on Friday from about $90 one month ago. That puts the price of a gallon of gas at a national average of $3.50, according to AAA. (read full report)

"GCIS INTELLIGENCE UPDATE" is an intelligence briefing presented by Griffith Colson Intelligence Service, and provided to the public for informative purposes only. All subject matter is credited to it's source of origin, and is not intended to represent original content authored by GCIS, it's partners or affiliates. All opinions presented are those of the author, and not necessarily those of GCIS or it's partners.

GCIS INTELLIGENCE BRIEFING: Middle East oil war spreads. First demos in Saudi Arabia, Iraq refinery blasted

ISSUED BY: GCIS Communications Command Center

SOURCE: DEBKAfile

26February2011 12:04pmEST

GCIS INTELLIGENCE UPDATE: Iraq's biggest oil refinery at Baiji, 180 kilometers north of Baghdad, was blown up early Saturday, Feb. 26, by an Al Qaeda cell activated by the Iranian Revolutionary Guards Al Qods Brigades, DEBKAfile's Middle East sources report. Tehran is using the Middle East turbulence to generate fuel shortages in Iraq and boost oil prices worldwide.

Thursday night, Feb. 24, saw the first signs of unrest in Saudi Arabia with demonstrations by young people demanding reforms of the kingdom's system of government and by Shiites living and working in the kingdom's oil-rich eastern regions. They demonstrated at Awwamiya in Qatif in solidarity with the protests in Libya and Bahrain. They also demanded the release of detainees rounded up by Saudi security authorities among the two million Shiites living and working in the main oil centers of Saudi Arabia to nip potential unrest in the bud.

Friday, in the Red Sea town of Jeddah in the west, a group calling itself "Jeddah Youth for Change staged a demonstration.

The slightest sign of unrest in Saudi Arabia, the world's biggest oil exporter, is bound to affect the price of oil. Iran is the biggest beneficiary of soaring prices. Day after day, as Arab capitals are beset by popular turbulence, Tehran is watching the damage caused its economy by international sanctions shrinking. (read full report)

"GCIS INTELLIGENCE UPDATE" is an intelligence briefing presented by Griffith Colson Intelligence Service, and provided to the public for informative purposes only. All subject matter is credited to it's source of origin, and is not intended to represent original content authored by GCIS, it's partners or affiliates. All opinions presented are those of the author, and not necessarily those of GCIS or it's partners.