Most days, writing about energy issues is less interesting than watching paint dry, as a mind-numbing procession of barrels per day, investment infrastructure costs and bilateral memos of understanding make one wish that their current topics was Britney Spears.
But every now and again, a news item illuminates the landscape like a star shell fired over a midnight battlefield.
Such an event occurred late last week when Vice Admiral Mark Harnitchek stated on 27 June that logistical supplies for U.S. and NATO International Security Assistance Forces in Afghanistan costs three times as much as routes through Pakistan.
Harnitchek told a group of defense reporters that transporting a container from the United States to Afghanistan now costs about $20,000.
Why the price “surge?”
Because on 26 November 2011 a NATO aerial assault on two Pakistani border posts in Mohmand Agency in Pakistan's turbulent NorthWest Frontier Province killed 24 Pakistani soldiers on Pakistani soil.
Islamabad promptly sealed its border with Afghanistan to NATO supplies after the allied strikes and demanded both an apology and increased fees for transit.
Pakistan initially let U.S./ISAF/NATO shipments transit from Karachi to the Afghan border for free, but in 2010 began charging $250 per container.
According to Nesar Ahmad Nasery, the deputy head of Pakistan’s Torkham Customs, around 1,000 trucks crossed into Afghanistan on a daily basis, nearly 300 of which were NATO contractors carrying NATO supplies in sealed containers, with each oil tanker having a capacity of 13,000-15,000 gallons.
Anticipating trouble with Islamabad, beginning in February 2009 the U.S. military shifted its logistics operations to a the Northern Distribution Network (NDN), a 3,212 mile-long railway link, running from Latvia's Riga Baltic port through Russia and Kazakhstan terminating in Uzbekistan's Termez on the Afghan border.
And fuel is an integral part of the logistics chain - the Marines based in Afghanistan alone consume 800,000 gallons a day of fuel. In October 2010 Admiral Michael Mullen, the Chairman of the Joint Chiefs of Staff, said that fossil fuels are the number one import into Afghanistan, with U.S. soldiers using up 300,000 barrels of oil per day.
Now supplies, after being offloaded in Uzbekistan’s southern city of Termez, are shunted onto trucks and sent into Afghanistan via the old Soviet-built tunnel at Salang Pass, a mile and a half-long. A tunnel built to handle 1,000 vehicles a day for the Soviet Afghan incursion is now attempting to pass 10,000 vehicles daily, alternating northbound and southbound truck traffic every other day. Salang Pass maintenance director, Afghan Lt. Gen. Mohammad Rajab, said simply, “It’s only a matter of time until there’s a catastrophe. One hundred percent certain, there will be a disaster, and when there is, it’s not a disaster for Afghanistan alone, but for the whole international community that uses this road.”
Pakistan demanded both an apology and that the cost of trucks and containers to Afghanistan will now increase to $5,000 apiece, an increase that Arizona Republican Senator John McCain, a leader of the Senate Armed Services Committee, has labelled “extortion.” McCain fulminated, "We can't look at aid (to Pakistan) in that light. It's now becoming a matter of principle."
In a “Joint Statement by Departments of State and Defense,” “Secretaries Clinton and Panetta have been closely monitoring reports of the cross-border incident in Pakistan today. Both offer their deepest condolences for the loss of life and support fully NATO’s intention to investigate immediately.”
Well, on 3 July Pakistan got roughly half of what it wanted. In a posting on the U.S. State Department website, a “Statement by Secretary Clinton on her Call With Pakistani Foreign Minister Khar” reported, “This morning, I spoke by telephone with Pakistani Foreign Minister Hina Rabbani Khar. I once again reiterated our deepest regrets for the tragic incident in Salala last November. I offered our sincere condolences to the families of the Pakistani soldiers who lost their lives. Foreign Minister Khar and I acknowledged the mistakes that resulted in the loss of Pakistani military lives. We are sorry for the losses suffered by the Pakistani military. We are committed to working closely with Pakistan and Afghanistan to prevent this from ever happening again.”
Clinton continued, “In addition, I am pleased that Foreign Minister Khar has informed me that the ground supply lines (GLOC) into Afghanistan are opening. Pakistan will continue not to charge any transit fee in the larger interest of peace and security in Afghanistan and the region.”
And the transit fees? The Pakistani press is reporting that “Islamabad is looking to more than double the (previous) payments, which could earn the country up to $1 million a day.”
Oh, and that “The United States is also understood to have guaranteed payment of at least $1.1 billion should the borders reopen, as compensation for fighting militants.”
So, how much did the Pakistani shutdown cost the U.S.? Only a mere additional $100 million a month for increased NDN transit fees, according to Panetta, or roughly $700 million.
Hardly surprising that in the “Department of Defense FY 2013 Overseas Contingency Operations (OCO) Request,” Harnitchek said of resupplying Afghanistan, "This is the logistics challenge of our generation."
Thank goodness American taxpayers are so understanding.
By. John C.K. Daly of Oilprice.com