C-LEVEL Maritime Risks Weekly News Summary: Feb. 12

In the U.S., the looming risk of the Pentagon having to take an almost 10-percent “haircut” on its budget for the next 10 years has prompted the U.S. Department of Defense to cancel the return of a second carrier to the Persian Gulf and Arabian Sea, as well as to defer the fuelling of another nuclear carrier. The decision, which has come about amidst rising uncertainty in Washington as politicians face off over the federal debt and spending limits, will likely have consequences on the U.S.’s ability to honor its commitments on anti-piracy measures off the Horn of Africa.

It has come as a particular shock just how quickly the fiscal roof seems to be caving in on the U.S. Navy.

Many of the assets used to repress Somali piracy were often “borrowed” from the warships already amassed around the Strait of Hormuz and meant to support operations in Iraq and Afghanistan, as well as remain on standby for support of any action in Iran. So, the question is whether operations in Somalia suffer due to budget constraints – not to mention what happens if the U.S. reduces its combat role in Afghanistan. In effect, many of the assets the U.S. Navy commits to anti-piracy are doing “double duty” and not funded specifically for the mission off Somalia.

If politicians come to an agreement to avoid sequestration (across-the-board budget cuts, which would reduce the Department of Defense’s budget by the nearly 10 percent), then the Pentagon will have enough money so that it will be able to send that second carrier back to steam in the waters near Iran, as well as get the other carrier refueled so she can provide the necessary margin needed to operate simultaneously in multiple hot-spots.

Or, if they don’t, the Pentagon says that hundreds of millions of dollars can be saved by keeping the second carrier in Norfolk, Virginia, and that it would take only two weeks to get to the Persian Gulf in case of any number of potential emergencies. In addition, deferring the refueling of the nuclear carrier could save over $3 billion.

So, budget realities are finally setting in for the U.S. Navy, which very well could have consequences on the region and on piracy in Somalia, which has dropped close to 60 percent from its peak.

Similarly, fiscal restraints forced Greece to pull its ship from the E.U. Navfor mission because of the Eurozone meltdown. It was also the case for the U.K., as the Royal Navy frigate it had contributed to full-time anti-piracy in the Horn of Africa was reassigned to split time between the Horn and Southeast Asia.

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Michael G. Frodl, Esq. is founder and head of Washington, DC-based C- LEVEL Maritime Risks consultancy. The group has special expertise in Gulf of Aden / Indian Ocean piracy and the threat it poses to the energy supplies of the Far East, as well as both Gulf of Guinea and SE Asia piracies. The group's specialty is trends analysis & long range forecasting. Michael has provided advice on emerging risks, including environmental, energy, climate, cyber & terrorism to global reinsurers and members of the national security community in Washington, DC for over 15 years. He's also been quoted extensively in specialty publications serving the luxury yacht market out of London. He can be reached directly at mgfrodl@tidalwave.net.

The above text was adapted from the C-LEVEL Maritime Risks weekly newsletter. Find out more at http://c-level.us.com/page.htm.