Presentation at the OCEEA-ATU Expert Meeting, OSCE, Vienna, 17 July 2008

1. Heiko Borchert
A Comprehensive Approach
for Interagency Cooperation on
Energy Infrastructure Security
Protecting Critical Energy Infrastructure
from Terrorist Attack
OCEEA-ATU Expert Meeting
Vienna, 17 July 2008
Dr. Heiko Borchert & Co. Consulting & Research Bruchmattstrasse 12 CH-6003 Lucerne T +41 41 312 07 40 F +41 41 312 07 44 www.borchert.ch
IPA Network International Public Affairs Krausnickstrasse 1 D-10115 Berlin T +49 30 27 57 28 3 F +49 30 27 57 28 59 www.ipa-international.org

2. EIS: A Complex Framework
Competition and Liberalization
Power and Monopoly
Producer Countries Transit Countries Consumer Countries
Chokepoints
Physical Infrastructure Consumption
Industry
ICT
Production
Explo- Trans- Storage Distri- Power
Refinement
ration port Refinement bution Generation
Storage
Human
Factors
Consumption
Organization Households
Common Market Focus
Downstream Control
Upstream Control
Comprehensive Approach for Energy Infrastructure Security, OCEEA-ATU Meeting, Vienna, 17 July 2008 Page 2

3. 5 Key Problems
Asymmetric Government control of resources: 85-90 %
Supply Chain Government control of production: 74 % (Gas), 78 % (Oil)
Network Insufficient trans-border capacities
Management Current network capacities vs. increasing use of
renewables
Complex Interdependencies between energy infrastructure and
Vulnerabilities other critical infrastructure sectors (in particular ICT)
Deregulation vs. security
Deliberate attacks on energy infrastructures
Underinvestment Energy infrastructure investments needs are much bigger
than disposable funds (EU-27: €1.79 trillion until 2030)
Crowding-out effect between different energy
infrastructure investment categories (LNG)
Regulatory Lack of common safety and security standards along
Deficits global energy supply chain
No international regulation authority
Power shift to the benefit of producing countries
Comprehensive Approach for Energy Infrastructure Security, OCEEA-ATU Meeting, Vienna, 17 July 2008 Page 3

4. Comprehensive Approach: Dimensions
Role of National
Oil/Gas Companies
Incentives for Regulatory
Investments Framework
Role of
Community Outside Investors Level
Relationships Playing Field
Local Community Governance
Capacity-Building Economy Capabilities
Sustainable Society
Distribution Reciprocity
of Income from and Politics
Extractive Develop- Transparency
Resources
ment Comprehensive
Interagency Security
Use of Sector Reform
Renewables
Approach
Standards
Environ- Safety
Impact of Armed and
Climate Change ment and
Security Forces
on Infrastructure Security
Science Role of
Conflicting Uses Private
of Soil
and Securing
Transport and Actors
Technology Chokepoints
CO2 Abatement vs.
Opposition against Detection Surveillance Security and
Infrastructure Human
Situational Awareness Rights
Energy Modeling &
ICT Security Efficiency Simulation
Material Science
Comprehensive Approach for Energy Infrastructure Security, OCEEA-ATU Meeting, Vienna, 17 July 2008 Page 4

5. Safety and Security Standards
Challenges
Lack of common EI safety and security standards along
the supply chain
Diverging regulatory approaches
Deregulation can further security risks
Suggestions for Best Practice Workshops
EI safety and security standards for the global energy supply chain
(OSCE, IEF, G8 PPP Forum, Companies)
Methods to identify and assess critical EI and interdependencies
between CI sectors (OSCE, EU, NATO, G8 PPP Forum, Companies)
Identifying, classifying, and assessing EI risks (OSCE, IEF, NATO, EU,
G8 PPP Forum, Companies)
EI resilience (OSCE, IEF, EU, G8 PPP Forum, Companies, Associations)
SCADA safety and security (OSCE, IEF, NATO, EU, G8 PPP Forum,
Companies, Associations)
Comprehensive Approach for Energy Infrastructure Security, OCEEA-ATU Meeting, Vienna, 17 July 2008 Page 5

6. Security Sector Reform
Challenges
There is a need to adapt the SSR paradigm with regard to the
Rationale for limited defense and security spending
Separation of security and defense forces
Scope of existing capacity-building programs
Suggestions
Build awareness for the need to invest in security and defense
capabilities to advance energy infrastructure security (OSCE, NATO, EU,
AU, GCC)
Transparency-building on dual-use spending and capabilities for EIS
and other security/defense tasks (OSCE, NATO, EU, AU, GCC)
Focus SSR more strongly on dual-use capabilities and interagency
interaction (OSCE, NATO, EU, UN, NGOs)
Take account of specific demands of hydrocarbon sector when setting
up judicial/administrative reforms (OSCE, EU, CoE, UN, EITI, NGOs)
Comprehensive Approach for Energy Infrastructure Security, OCEEA-ATU Meeting, Vienna, 17 July 2008 Page 6

7. Community Relationship Management
Challenges
If people benefit from infrastructure projects they
will take care of them
Understand local ownership as the “first line of defense”
Suggestions
Workshop on the role of community-building and EI promotion in
national/international development policies (OSCE, UN, EU, IFI)
Workshop on how to create off-springs from (energy) infrastructure
projects for local communities (OSCE, EU, IFI, UN, Companies, NGOs)
Workshop on risks and opportunities of infrastructure collocation (OSCE,
EU, IFI, UN, Companies, NGOs)
Advance the idea of integrated community-based security based on
shared responsibilities between local communities, energy companies,
private security forces, government agencies and security/defense forces
(OSCE, EU, NATO, NGOs, AU, GCC, Companies)
Comprehensive Approach for Energy Infrastructure Security, OCEEA-ATU Meeting, Vienna, 17 July 2008 Page 7

8. Role of Private Security Contractors
Challenges
PSC are a matter of fact in the energy sector
“Image problems” obstruct a sober analysis of their role
Suggestions
Awareness-building workshop on the role of PSC in the energy sector
(OSCE, NATO, EU, PSC, Companies, NGO)
Sharing best practice with regard to setting-up security agreements
(OSCE, NATO, EU, PSC, Companies, NGO)
Integrate private security training for local security forces into international
SSR programs (OSCE, NATO, EU, PSC, Companies, NGO)
Create level-playing field between local security forces and private security
contractors (OSCE, NATO, EU, PSC, Companies, NGO)
Comprehensive Approach for Energy Infrastructure Security, OCEEA-ATU Meeting, Vienna, 17 July 2008 Page 8

9. Conclusions
1. Worldwide dependence on energy infrastructures is growing, thus making
the safety and security a key policy challenge
OSCE countries are among the key actors affected by this trend
2. In today’s international environment there is a serious need for
transparency and confidence-building with regard to energy
infrastructure security
This plays into the hands of the OSCE
3. A successful comprehensive approach to energy infrastructure security
very much depends on coordination between national and international
levels and public and private actors
Could the OSCE serve as a coordination platform?
4. The logic of global energy supply chains should lead to more joint regional
security initiatives along key infrastructure corridors
Could the OSCE serve as a facilitator in Central Asia, the
Caucasus, the Black Sea region, and in the Mediterranean region?
Comprehensive Approach for Energy Infrastructure Security, OCEEA-ATU Meeting, Vienna, 17 July 2008 Page 9