URSABLOG: Problems In The Pipeline

The sight of large amounts of methane bubbling up in the Baltic Sea this week was extraordinary to say the least. Thank God there was no shipping in the area. I am not sure if that amount of methane would affect the buoyancy of vessels, but any ship passing could have easily set off an explosion just by being there. The sheer recklessness of the acts – it can only assumed to be sabotage – is almost breath-taking in its callousness.

The reportage of the incident has concentrated on the environment, energy security and defence. Certainly the amount of gas released into the sea, and consequently the atmosphere, was massive, and I saw one comment saying that this was equivalent to 32% of Denmark’s annual greenhouse gas emissions. I can imagine it wasn’t very pleasant for any fish or other marine life in the area either. Methane is a much more virulent greenhouse gas than carbon dioxide, up to ninety times as harmful, and whilst it breaks down quicker in the atmosphere than other gases, it still carries a potent punch for its weight: over a hundred year period it is 25 times more harmful than carbon dioxide. But because it’s invisible, and will disperse into the atmosphere, it doesn’t look too bad. I may be being a bit flippant, but just imagine if it was a crude oil pipeline. Well actually you don’t have to imagine that hard, just remember the Deepwater Horizon disaster.

It’s hard to really quantify how much methane has gone into the atmosphere – water can dissolve some of it, which is then broken down by bacteria – but let’s say it’s around 300,000 cubic metres, a number suggested by some European scientists. This is equivalent to the cargoes carried by two average LNG carriers. Can you imagine the media reaction if two LNG carriers were lost in quick succession? It’s difficult to envisage because it has never happened, but Ever Given would be an amusing sideshow in comparison.

Annual methane emissions are around 570 million tonnes according to the International Energy Agency so this escape is – literally – a drop in the ocean. But remember that methane emissions include those that occur naturally – 3% of all global emissions come from the Sudd wetlands of East Africa – not forgetting that produced in livestock production. It is however still a significant environmental event, and it is also a huge waste of unused energy, which is of course in short supply.

This is another – if fairly dramatic – nail in the coffin of Russian exports of natural gas to Europe, and one that is harder to fix than replacing a spare part in a turbine. The pipes that carry the gas are about 4cm thick and coated in up to 11cm of concrete, making each 12-metre section weigh about 24 tonnes. ?The four leaks were each caused by explosions, at least according to seismic readings recorded by the surrounding countries. Bj?rn Lund, a member of the Swedish seismic network, estimated that more than 100kg of dynamite or TNT would be needed to cause such large readings.

I will not go into who was behind the explosions – it seems a relatively pointless discussion, open to endless conspiracy theories that could never be proven or otherwise – but the fact that they happened at the same time that a new branch of a pipeline connecting Poland with Norway’s major pipeline to continental Europe was opened is surely not entirely coincidental. Europe will now definitely have to live without natural gas pumped under the sea from Russia indefinitely. Now other pipelines could be sabotaged too.

Russia – if it was them – blowing up their own pipelines in international waters, underlines their current geopolitical strategy, and seemingly doubles down on their determination to make this winter as chilling as possible for their western neighbours. Similar acts on other energy infrastructure installations not belonging to Russian companies would be seen as an act of aggression inviting retaliation from the western powers, whether or not they were in international waters. Perhaps this is what they want?

Norway is now the largest supplier of natural gas to Europe, even before the pipelines were tampered with, and have scrambled F-35 fighter jets to fly past oil platforms – a show of strength perhaps, but of little practical use – and are sending torpedo boats and frigates to patrol sensitive areas. It turns out that oil and gas operators in Norwegian and Danish waters of the North Sea have spotted a number of unidentified drones near platforms in recent weeks.

It doesn’t stop there. A British Poseidon maritime surveillance plane, used to track submarines, took off from northern Scotland on Thursday and spent several hours circling the coast off Newcastle on the north-east coast of the UK, an area of significant offshore oil and gas activity, including pipelines of course. In the Mediterranean too, Italy has said its navy would increase measures to protect gas pipelines connecting north Africa to Europe through the Sicilian channel. Khashayar Farmanbar, Swedish energy minister, said that it was “important to stress, this is not just a northern European issue, this is a European issue.”

The problem with hard infrastructure, of any sort, is that it costs a lot, and does not move. This makes it vulnerable to attack – it is easy to find, hard to defend against – and difficult to replace. This is especially true, as recent months have taught us, as far as energy of any sort is concerned. Downstream demand has to be satisfied, but the supply chain can be cut very simply in one place, disrupting the whole system.

One of the lessons of COVID, particularly in container shipping, was that supply chains can adapt very quickly if they have the flexibility of seaborne trade. Bottlenecks did not occur at sea – even arguably with Ever Given – they occurred at the interface between land and sea, or the infrastructure that allowed ships to go through land, in the Suez Canal. In short, it was the hard stuff, the solid infrastructure and the land itself that caused the problems, not the ships.

Environmentally speaking ships are self-contained and remain the most efficient, flexible and ecologically safe way of moving large amounts of commodities and goods around the world. The safety record of all ships carrying liquid hydrocarbons around the world in recent years is beyond reproach compared to hard infrastructure.

In terms of supplying energy security, it is the international markets that have chartered ships so that in a fast-changing environment – both politically and economically – there are no instances of crises, at least yet, as far as supply is concerned.

And although there have been instances in the last few years when ships have been detained and diverted by different state actors – and of course blocked from leaving ports in a state of war, as in the Ukraine – there have been very few instances where ships themselves have been targeted, although some have suffered collateral damage.

Which doesn’t mean it can’t happen. This blog was intended as yet another valedictory article on how shipping makes it possible for us not only to live the lives we lead, but also can quickly adapt when times change. However whilst writing I have felt a distinct chill descend on me as I consider what could happen next. Shipping will fill the gaps when hard infrastructure fails – for whatever reason – but what happens when shipping itself is targeted? When non combatant crews come under attack by forces not only beyond their control, but forces that do not even care about their existence?

The crew change crisis of COVID illustrated starkly enough how national governments treat others when their interests are under threat. How much worse could it get if ships – owned by companies with no connection to either importers or exporters except as service providers, flagged in neutral countries, and crewed by ordinary men and women going to sea to support themselves and their families – how much worse could it get if these ships were caught up in other people’s arguments, other people’s wars. There are still ships stranded in the Ukraine by the way, in case you hadn’t noticed. Ask those owners, those crews for a start.

I fear that this is not just a North European problem, or a Black Sea problem, or even a European one. It is a global one, as recent events around Taiwan show. I hope that shipping is kept out of it, but just as the demand for pipelines is derived from the demand for energy, the demand for many ships is the same. I hope I am not being alarmist, but we are living in very uncertain and unpredictable times. The existential risks for the world, and for shipping, just got that little bit bigger.

Simon Ward

www.ursashipbrokers.gr