Monday, April 16, 2007

Lessons from Nigeria on US Copper Thefts

Energy Intelligence Note: 16 April, 2007

A month ago I reported on the escalation of infrastructure disruption in Nigeria for The Oil Drum. The key trend that I identified was the shift from measured, politically-motivated attacks under the leadership of MEND (a negative feedback loop) to the financially motivated attacks carried out by a patchwork of profit-driven youth gangs (a positive feedback loop). As part of my conclusion—and probably the part that was taken least seriously—I noted that there is great potential for this same kind of profit-driven infrastructure attack within the US. Increasingly, it appears that this is exactly what is happening with the rising occurrence of copper theft from US utilities. How are these two situations similar, and what lessons from Nigeria are applicable to US infrastructure security?

In the past year, 7 people have been electrocuted while attempting to steal copper from active power lines within the US. In Chandler, Arizona alone, police have reported over 200 calls reported to copper theft, and the local Salt River Project, a water utility, suffered up to $400,000 in damage to their system from theft of copper “backflow-preventer” valves in their water pipes. Just last week, thieves broke in to an electrical substation in Calhoun, Georgia and stole copper components, resulting in a power outage to 1500 people. With the price of copper on the rise—currently over $3 per pound—the rate of copper theft from utilities is likely to continue increasing. Is this similar in any way to the disruption to the oil infrastructure in Nigeria, and what lessons can we learn from that situation?

In Nigeria, politically motivated attacks were previously controlled by two factors. First, they were a means to a political end, and the government could reign in these attacks by offer political concessions. Second, the political organization behind the attacks, MEND, had a vested interest in maintaining the long-term viability of Nigeria’s oil exporting capacity, creating a self-imposed limitation on their attacks. The shift to decentralized, profit-motivated youth gangs has removed these two limiting factors, and the problem is spiraling out of control. Similarly, US copper thefts are neither limited by political concerns nor an awareness of actors’ vested interest in the viability of US utility grids. Finally, just as Nigerian violence creates a positive feedback loop that increases the price of oil, further incentivising profit-oriented attacks in Nigeria, the spate of US copper thefts is a potential positive feedback loop. If authorities attempt to crack down on copper thefts by instituting new controls over the sale of scrap copper, they will increase the cost of legitimate scrap copper sales and drive up the black market price of scrap copper, increasing the incentive to copper thieves.

What lessons can we learn from the infrastructure attacks in Nigeria? While the comparison provides no obvious solutions to the problem of copper thefts, it does provide insight into certain aggravating factors. Nigerian youth in the Delta region are particularly vulnerable to the lure of profit-motivated attacks because of the dire economic situation there. Likewise, while further increases in copper price will drive copper thefts, a recession or other economic factors such as inflation will similarly increase the return on investment for copper thieves. As with the situation in Nigeria, as utilities upgrade facility security in response to copper theft, utility personnel risk becoming the most accessible target—either as a means of gaining access to copper stores, or when they are caught in the crossfire as copper thieves escalate their tactics and violence in response to greater security. Finally, as the return on investment for copper thefts increases, it is also likely that issue-oriented groups such as the Earth Liberation Front will choose copper theft as a way to simultaneously finance their operations and inflict damage on specific industrial utilities or consumers.


dryki said...

At least here in US, the culture has not broken down enough. When people's homes go dark - and energy is still being sent over the grid to richer customers in another state - then I could easily see Mom taking out the chainsaw to take down the grid. Ditto for natural gas or water.

Seems to me people need to see the ripoff and inequity before they turn to the warlords. Nigeria went through the phase with Ken Saro-Wiwa. Avenues for peaceful change and all that.

The target probably would not be environmental directly, but Commerce Clause/NAFTA/CAFTA/GATTS.

I do think it is taken very seriously. It is part of the logic behind RealID - physically dividing and checkpointing everyone in US. That's not about stopping another 9/11, but it is Petraeus' strategy adapted for the Homeland.

Anonymous said...

how about all the copper in pennies. you are welcome to all of it.

JCamasto said...

Copper in pennies - all 2.5% of it...


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