Challenges ahead for expanding region

BOLSTERED by vast infrastructure projects, a growing population and a highly efficient, interdependent and maturing economic profile, the future of the Pilbara seems secure.

Existing and future vulnerabilities, however, have the potential to destabilise the region, and impact upon state and national security.

Threat assessment

The region’s population, iron ore, hydrocarbon and critical infrastructure will become increasingly vital, and accordingly at risk during the next decade.

By 2020, the Pilbara’s population is expected to reach 62,000, primarily concentrated in the newly developed ‘Karratha City’ and ‘Port City’ (Port Hedland). The demographic transition from the current widely dispersed population of 45,000, to the Pilbara Cities vision of highly concentrated regional communities, leaves the populace more exposed to potential hazards and threats.

In addition to the residential population, the expansion of the resources sector will increase the number of transient fly-in, fly-out workers drawing services from the Pilbara cities and satellite towns. In the event of a catastrophic incident, this additional transient population will increase the pressure on already strained critical services and amenities.

Current expansion in the iron ore industry is projected to continue.

Projected expansion of the offshore hydrocarbon industry with the Gorgon, Pluto and Wheatstone projects, along with the complementary onshore facilities, such as the Ashburton North Industrial Estate, will bolster the regional profile.

The continued development of the Pilbara will depend upon the effective functioning of critical infrastructure and supply management networks, to provide regional employment, sustain private profits and continue economic diversification. The region’s growing role as an area of strategic importance is accompanied by an increased sense of vulnerability to existing, as well as emerging threats.

The forecast rise of the Pilbara makes its especially vulnerable to human, industrial and ecological challenges. The development of a successful risk management strategy is reliant upon understanding the potential magnitude of challenges to regional security.

Human

While the conventional threat to Australia remains negligible, non-conventional threats may exploit susceptibilities. These threats may range from terrorist organisations to disenfranchised individuals/groups, cyber warfare, industrial espionage, organised crime, pandemics, natural and industrial disasters.

The human security threat is likely to be autonomous, with their connection to an ideological maxim vague or not existent. Estimative intelligence from national and international experience suggests that non-state threats will be well versed in technology and will comprise of homegrown disenfranchised groups or individuals.

Whilst Islamic terrorism has been a dominant theme during the past decade, and will continue to feature in Australia’s national security discourse, lone wolf or sociopathic actors, such as disgruntled employees cannot be discounted as a threat.

The Pilbara is vulnerable to economic targeting, which is a cornerstone of terrorist modus operandi and an attractive option for other human acts of violence. The projected expansion in the resource sector, with its subsequent infrastructure projects, will elevate the Pilbara’s existing economic profile.

The region’s growing export profile presents an attractive target for those seeking to achieve maximum economic impact through the disruption or cessation of projects. Economic targeting generates maximum impact, instigating global increases to commodity values, logistical and operational costs.

Targeting of the Pilbara’s commodity base, particularly, the emerging hydrocarbon sector, would cause disproportionate damage due to the low input/high consequence nature of energy sector terrorism. The threat to offshore facilities remains remote due to geographic barriers.

The risk of terrorist and other criminal networks exploiting the vulnerabilities inherent within critical and logistical infrastructure will continue to increase as the regional economy expands over the next decade. Attacks targeting maritime and port facilities remain a distinct possibility. Maritime terrorism could target existing congestion in the ports of Dampier and Port Hedland, creating a bottleneck and stopping exports for an extended period of time.

Pipeline infrastructure connecting offshore gas to onshore infrastructure will also be highly vulnerable.

To alleviate projected deficits in employment the resources sector will invest in greater remote computer access centres for product extraction and management. Initiatives such as Rio Tinto’s ‘Mining for the Future’ will streamline mine, plant, rail, port and utility management from Perth. Despite addressing projected productivity shortages, reliance upon computerised project management will simultaneously serve to increase vulnerability to cyber exploitation from individuals, terrorist, criminal, and potentially state actors and competitors.

Low-level threats may emanate from disaffected employees and potentially criminal entities motivated by the potential to cause economic damage or disruption in business, rather than inflicting causalities. These parties are likely to be involved in intellectual theft, vandalism, product, value or equipment tampering.

Industrial

The Pilbara’s exposure to industrial accidents will increase as its economic and infrastructure activity expands over the course of the next decade. Such incidents have the potential to disrupt projects and stakeholder revenue, and will also carry myriad regional, state and national consequences.

The volatile nature of hydrocarbons highlights the highly consequential nature of offshore hydrocarbon projects, demonstrated by the Deepwater Horizon, Piper Alpha and Alexander Kielland catastrophes. The National Offshore Petroleum Safety Authority’s chartered mission “to independently and professionally regulate offshore health and safety” requires careful negotiation on the balance of constraining industry and protecting workers, while mitigating death, suffering, pollution and disruption to the local, state and national economy.

The supply management chain of the iron ore industry will remain susceptible to industrial accidents. Serious incidents involving rail and port facilities could delay and disrupt projects throughout the region. Protracted issues in logistics that result in a failure to meet contractual commitments would prove economically disastrous for both the region and beyond.

Ecological

Environmental issues pose a formidable challenge to the resource industry. The Pilbara’s ecology is categorised by long dry spells, punctuated by severe cyclonic activity. This provides a considerable challenge for risk management when combined with the vague predictions of climate change forecasting. Depressed first quarter profits from the mining giants due to torrential rain highlight the ecological challenges of the region.

Adverse ecological activity can also exacerbate existing vulnerabilities, causing industrial accidents. Natural disasters do not preclude businesses of their environmental responsibility. Cyclonic activity may cause flooding, which can release contaminants from mining operations or damage critical infrastructure, in turn causing environmental damage.

Conclusion

Regional complacency and current deficiencies in risk-management policy are inconsistent with the Pilbara Cities vision. Realisation of the scheme is dependent on proactive and dynamic strategies to mitigate threats and challenges.

Over the coming decade, regional, state and federal stakeholders must engage in constructive dialogue to ensure that the region is able to withstand potential challenges and fulfil its projected economic and geostrategic capacity.

• Liam McHugh is a strategic analyst with Future Directions International. This is an edited version of a recent paper on northern Australia and energy security.