The Promise and Perils of Mining Asteroids

Encouraged by new space technologies, a growing fleet of commercial rockets and the vast potential to generate riches, a group of entrepreneurs announced Tuesday that they planned to mine the thousands of near-Earth asteroids in the coming decades.

The new company, Deep Space Industries (DSI), is not the first in the field, nor is it the most well-financed. But with their ambition to become the first asteroid prospectors, and ultimately miners and manufacturers, they are aggressively going after what Mark Sonter, a member of DSI's board of directors, called "the main resource opportunity of the 21st century." (Related: "Asteroid Hunter to Be First Private Deep-Space Mission?")

Prospecting using miniaturized "cubesat" probes the size of a laptop will begin by 2015, company executives announced. They plan to return collections of asteroid samples to Earth not long after.

"Using low cost technologies, and combining the legacy of [the United States'] space program with the innovation of today's young high tech geniuses, we will do things that would have been impossible just a few years ago," said Rick Tumlinson, company chairman and a longtime visionary and organizer in the world of commercial space [not sure what commercial space means].

"We sit in a sea of resources so infinite they're impossible to describe," Tumlinson said.

Added Value

There are some 9,000 asteroids described as "near-Earth," and they contain several classes of resources that entrepreneurs are now eyeing as economically valuable.

Elements such as gold and platinum can be found on some asteroids. But water, silicon, nickel, and iron are the elements expected to become central to a space "economy" should it ever develop.

Water can be "mined" for its hydrogen (a fuel) and oxygen (needed for humans in space), while silicon can be used for solar power systems, and the ubiquitous nickel and iron for potential space manufacturing. (See an interactive on asteroid mining.)

Sonter, an Australian mining consultant and asteroid specialist, said that 700 to 800 near-Earth asteroids are easier to reach and land on than the moon.

DSI's prospecting spacecraft will be called "FireFlies," a reference to the popular science fiction television series of the same name. The FireFlies will hitchhike on rockets carrying up communication satellites or scientific instruments, but they will be designed so that they also have their own propulsion systems. The larger mining spacecraft to follow have been named "DragonFlies."

Efficiencies

It all sounds like science fiction, but CEO David Gump said that the technology is evolving so quickly that a space economy can soon become a reality. Providing resources from beyond Earth to power spacecraft and keep space travelers alive is the logical way to go.

That's because the most expensive and resource-intensive aspect of space travel is pushing through the Earth's atmosphere. Some 90 percent of the weight lifted by a rocket sending a capsule to Mars is fuel. Speaking during a press conference at the Santa Monica Museum of Flying in California, Gump said that Mars exploration would be much cheaper, and more efficient, if some of the fuel could be picked up en route. (Related: "7 Ways You Could Blast Off by 2023.")

Although there is little competition in the asteroid mining field so far, DSI has some large hurdles ahead of it. The first company to announce plans for asteroid mining was Planetary Resources, Inc. in spring 2012—the group is backed by big-name investors such as Google's Larry Page and Eric Schmidt, filmmaker James Cameron, and early Google investor Ram Shriram. DSI is still looking for funding.

Owning Asteroids

While these potential space entrepreneurs are confident they can physically lay claim to resources beyond Earth, there remain untested legal issues.

The United Nations Space Treaty of 1967 expressly forbids ownership of other celestial bodies by governments on Earth. But American administrations have long argued that the same is not true of private companies and potential mining rights.

While an American court has ruled that an individual cannot own an asteroid—as in the case of Gregory Nemitz, who laid claim to 433 Eros as a NASA spacecraft was approaching it in 2001—the question of extraction rights has not been tested.

Moon rocks brought back to Earth during the Apollo program are considered to belong to the United States, and the Russian space agency has sold some moon samples it has returned to Earth-sales seen by some as setting a precedent.

Despite the potential for future legal issues, DSI's Gump said his group recently met with top NASA officials to discuss issues regarding technology and capital, and came away optimistic. "There's a great hunger for the idea of getting space missions done with smaller, cheaper 'cubesat' technology and for increased private sector involvement."

Everyone involved acknowledged the vast challenges and risks ahead, but they see an equally vast potential—both financial and societal.

"Over the decades, we believe these efforts will help expand the civilization of Earth into the cosmos, and change what it means to be a citizen of this planet," Tumlinson said.

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Al Qaeda Commander Killed for the 3rd Time

The second in command of al Qaeda's Yemen affiliate was reportedly killed in an airstrike in Yemen in December, according to a news report by Arabic television network Al Arabiya, the third time the former Guantanamo detainee has been reported dead since 2010.

According to the report, Said al-Shihri died last month after sustaining severe injuries from a joint U.S.-Yemeni airstrike that targeted a convoy in which he was riding. The al Arabiya account, based on information from "family sources," said that the airstrike left al-Shihri in a coma. He allegedly died soon after and was buried in Yemen.

On Tuesday afternoon, hours after the initial report, a Yemeni government official denied having any information regarding the death of al-Shihri, according to Arabic news site al-Bawaba.

No photos of a body have yet surfaced and no mention of his death has appeared on jihadi forums.
This is the third time al-Shihri, the second in command of al Qaeda in the Arabian Peninsula (AQAP), has been reported killed since 2009. In 2010, the Yemeni government claimed it had captured him. In September 2012, Yemeni news sites reported he was killed in an American drone strike.

PHOTOS: Terrorists Who Came Back from the Grave

READ: Gitmo Detainee turned terror commander killed: Reports

Al-Shihri, a "veteran jihadist," traveled to Afghanistan shortly after the Sept. 11, 2001 terror attacks to fight coalition troops, only to be captured weeks later, according to West Point's Combating Terrorism Center. He was sent to the U.S. prison in Guantanamo Bay, Cuba, where he stayed for six years before being released to Saudi Arabia. There, he entered a so-called "jihadi rehab" program that attempted to turn terrorists into art students by getting them to get "negative energy out on paper," as the program's director told ABC News in 2009.

READ: Trading Bombs for Crayons: Terrorists Get 'Art Therapy'

But just months after he supposedly entered the fingerpainting camp, al-Shihri reappeared in Yemen where he was suspected to have been behind a deadly bombing at the U.S. embassy there.

At the time, critics of the "jihadi rehab" program used al-Shihri as evidence that extremists would just go through the motions in order to be freed.

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At second inauguration, Obama relishes the rituals, as well as the smaller moments

The second time seemed to charm him.

The choreography of President Obama’s ceremonial inauguration Monday was nearly identical to that of his swearing-in four years ago: church, motorcade to the Capitol, invocation, oath, address, luncheon, parade, dancing.

This time, however, the man taking the oath of office was an experienced president, not a first-term senator. And Obama seemed determined to relish the rituals and have himself some fun.

In his public remarks, he spoke with conviction. From the Capitol steps, he asserted his intention to bind the nation closer together. He was sober in addressing members of Congress at a luncheon.

But the president also found joy in the smaller moments. He blew kisses as he walked the parade route with his jubilant wife, Michelle, beside him. He bobbed his head and grooved watching a drill group from Iowa pass by and waved the shaka sign to the marching band from his Hawaiian high school alma mater. On the dance floor later, he nuzzled his wife’s hair and crooned in her ear.

There was a majesty and gravity to Monday’s proceedings, but this time, unlike four years ago, Obama knows what his office demands, as well as the limits on its power. His life is not in transition like it was then. He is settled.

He seemed to recognize that the next time the country pauses to inaugurate a president, the Obamas will be moving out of the White House, departing the city by helicopter and heading home. After the ceremony on the Capitol steps, as the president headed inside, he turned back and stopped.

“I want to take a look, one more time,” Obama said. “I’m not going to see this again.”

He stood still and looked out at the panorama of flags waving and people, hundreds of thousands of them, cramming the Mall and chanting his name.

It was as if he wanted to engrave the picture on his mind.

And he seemed to savor such moments throughout the day.

When the Brooklyn Tabernacle Choir sang “The Battle Hymn of the Republic,” he turned and broadly winked at his daughters, Malia, 14, and Sasha, 11.

Myrlie Evers-Williams, a civil rights activist whose husband, Medgar Evers, was assassinated in 1963 in his Mississippi driveway, delivered the invocation. She spoke of being challenged by adversity — “For every mountain, you gave us the strength to climb,” she said — and Obama, his eyes closed in prayer, lifted his shoulders and took a deep breath.

“Amen,” he said at the end of her prayer.

A man behind the president shouted, “Hallelujah!”

When Chief Justice John G. Roberts Jr. delivered the president’s oath at 11:50 a.m., Obama flubbed a word, “the office of president of the United Sta—.” But it didn’t matter. He had recited the official oath correctly a day earlier, on Jan. 20, the inauguration date mandated by the Constitution. (His daughter Sasha already had congratulated him, too: “You didn’t mess up,” she told him in the Blue Room. )

Then, once Sen. Charles E. Schumer (D-N.Y.) introduced him as “the 44th president of the United States,” Obama looked down and smiled. He gathered himself and pushed his chin up, understanding his role in addressing the nation far more clearly than he could have the first time around.

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Japan to ease US, French beef import restrictions

TOKYO: Japan plans to ease restrictions on American and French beef imports imposed due to concerns over mad cow disease, government officials and local media said Tuesday.

Japan, which was once the largest buyer of US beef, halted imports after a case of mad cow disease was detected in an American herd in 2003. It now imports meat only from cattle aged under 20 months.

Tokyo plans to raise the limit to 30 months starting on February 1 if the health ministry's council gives approval, the health, labour and welfare minister Norihisa Tamura told a news conference.

Japan will also apply the same age limit to beef imported from France, which was previously totally banned, Kyodo News quoted unnamed ministry officials as saying.

As for beef from cattle raised in the Netherlands, currently also subject to a total ban, Japan has been in talks with the Dutch government to set the age restriction at up to 12 months in response to its request, Kyodo said.

Beef meeting these relaxed criteria is expected to start arriving in Japan around late February to early March, it added.

-AFP/fl

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Attack at Algeria Gas Plant Heralds New Risks for Energy Development

The siege by Islamic militants at a remote Sahara desert natural gas plant in Algeria this week signaled heightened dangers in the region for international oil companies, at a time when they have been expanding operations in Africa as one of the world's last energy frontiers. (See related story: "Pictures: Four New Offshore Drilling Frontiers.")

As BP, Norway's Statoil, Italy's Eni, and other companies evacuated personnel from Algeria, it was not immediately clear how widely the peril would spread in the wake of the hostage-taking at the sprawling In Amenas gas complex near the Libyan border.

Map by National Geographic

Algeria, the fourth-largest crude oil producer on the continent and a major exporter of natural gas and refined fuels, may not have been viewed as the most hospitable climate for foreign energy companies, but that was due to unfavorable financial terms, bureaucracy, and corruption. The energy facilities themselves appeared to be safe, with multiple layers of security provided both by the companies and by government forces, several experts said. (See related photos: "Oil States: Are They Stable? Why It Matters.")

"It is particularly striking not only because it hasn't happened before, but because it happened in Algeria, one of the stronger states in the region," says Hanan Amin-Salem, a senior manager at the industry consulting firm PFC Energy, who specializes in country risk. She noted that in the long civil war that gripped the country throughout the 1990s, there had never been an attack on Algeria's energy complex. But now, hazard has spread from weak surrounding states, as the assault on In Amenas was carried out in an apparent retaliation for a move by French forces against the Islamists who had taken over Timbuktu and other towns in neighboring Mali. (See related story: "Timbuktu Falls.")

"What you're really seeing is an intensification of the fundamental problem of weak states, and empowerment of heavily armed groups that are really well motivated and want to pursue a set of aims," said Amin-Salem. In PFC Energy's view, she says, risk has increased in Mauritania, Chad, and Niger—indeed, throughout Sahel, the belt that bisects North Africa, separating the Sahara in the north from the tropical forests further south.

On Thursday, the London-based corporate consulting firm Exclusive Analysis, which was recently acquired by the global consultancy IHS, sent an alert to clients warning that oil and gas facilities near the Libyan and Mauritanian borders and in Mauritania's Hodh Ech Chargui province were at "high risk" of attack by jihadis.

"A Hot Place to Drill"

The attack at In Amenas comes at a time of unprecedented growth for the oil industry in Africa. (See related gallery: "Pictures: The Year's Most Overlooked Energy Stories.") Forecasters expect that oil output throughout Africa will double by 2025, says Amy Myers Jaffe, executive director of the energy and sustainability program at the University of California, Davis, who has counted 20 rounds of bidding for new exploration at sites in Africa's six largest oil-producing states.

Oil and natural gas are a large part of the Algerian economy, accounting for 60 percent of government budget revenues, more than a third of GDP and more than 97 percent of its export earnings. But the nation's resources are seen as largely undeveloped, and Algeria has tried to attract new investment. Over the past year, the government has sought to reform the law to boost foreign companies' interests in their investments, although those efforts have foundered.

Technology has been one of the factors driving the opening up of Africa to deeper energy exploration. Offshore and deepwater drilling success in the Gulf of Mexico and Brazil led to prospecting now under way offshore in Ghana, Mozambique, and elsewhere. (See related story: "New Oil—And a Huge Challenge—for Ghana.") Jaffe says the Houston-based company Anadarko Petroleum has sought to transfer its success in "subsalt seismic" exploration technology, surveying reserves hidden beneath the hard salt layer at the bottom of the sea, to the equally challenging seismic exploration beneath the sands of the Sahara in Algeria, where it now has three oil and gas operations.

Africa also is seen as one of the few remaining oil-rich regions of the world where foreign oil companies can obtain production-sharing agreements with governments, contracts that allow them a share of the revenue from the barrels they produce, instead of more limited service contracts for work performed.

"You now have the technology to tap the resources more effectively, and the fiscal terms are going to be more attractive than elsewhere—you put these things together and it's been a hot place to drill," says Jaffe, who doesn't see the energy industry's interest in Africa waning, despite the increased terrorism risk. "What I think will happen in some of these countries is that the companies are going to reveal new securities systems and procedures they have to keep workers safe," she says. "I don't think they will abandon these countries."

This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.

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Inauguration: 7.5 Things You Should Have Seen

A presidential inauguration is a big, long event that lasts all day and into the night–and who has time to really watch it? People have jobs, ones that don’t let you off for a federal holiday.

Everyone (or, at least, some) will be talking about it, which means potential embarrassment for anyone who doesn’t know what happened. Thankfully, ABC employs  news professionals stationed in Washington, D.C., to pay attention to these kinds of things and boil off some of the less noteworthy or interesting stuff, presenting you with short videos of everything that really mattered. Or at least the things a lot of people were talking about.

A full day of paying attention to President Obama’s second Inauguration leads one of those professionals to offer these 7 1/2 things:

1. Beyonce Sang the National Anthem

Boy, howdy! Did she ever? Beyonce has essentially become the Obama’s go-to female performer: She recorded a music video for Michelle Obama’s “Let’s Move” initiative in 2011, and she performed at the president’s last inauguration in 2009. Her velvety, soulful “Star Spangled Banner” is getting good reviews.

2. Kelly Clarkson Also Sang

Kelly Clarkson is not as “in” with the First Couple as Beyonce seems to be, but they let her sing “My Country ‘Tis of Thee,” and she did a pretty good job with it. This was kind of weird, though, because at one point she said she loved Ron Paul, although she later said she would vote for Obama.

3.  Obama Talked About Gay Rights

This may not seem shocking since more than half the country, including President Obama, supports gay marriage. But the president made a point of mentioning gay rights during his speech, equating the struggles of the LGBT community with those of  past civil rights movements, and in doing so made history.

He name-checked Stonewall, the New York City bar that was raided by police in 1969 sparking riots to protest the anti-gay crackdown. And he actually used the word “gay”: “Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law – for if we are truly created equal, then surely the love we commit to one another must be equal as well,” Obama said in his address.

Plenty of inaugural addresses have been chock full of rhetoric about freedom and equality, but in the last four years, the political culture surrounding gay rights has changed significantly, as more states legalized same-sex marriage and as broad swaths of the country got more comfortable with homosexuality in general. Obama’s “evolution” on gay marriage, and now his inaugural address, have helped signify that change.

4. Joe Biden Made Jokes and Shook Hands With People

Could we expect anything less?

Here’s how the Vice President toasting Sen. Chuck Schumer instead of President Obama at the big luncheon:  ”I raise my glass to a man who never, never, never operates out of fear, only operates out of confidence, and a guy–I’m toasting you, Chuck.” Watch it:

And here he is, scurrying around and jovially shaking hands with people along the parade route:

5. Richard Blanco Read a Poem That Was Sort of Whitman-esque, But Not Entirely

Cuban-born Richard Blanco became America’s first openly gay, Latino Inauguration poet. He read a nine-stanza poem entitled “One Today,” which set a kind of unifying American tableau scene.

6. Obama and Michelle Walked Around Outside The Limo

President Obama walked part of the parade route, from the Capitol to the White House, with Michelle. They waved to people. It is not entirely abnormal for a president to do this at an inaugural parade. But they walked quite a ways.

7. John Boehner: ‘Godspeed’

The speaker of the House presented American flags to Obama and Biden, telling them: “To you gentlemen, I say congratulations and Godspeed.”

7 1/2. Sasha and Malia Were There. 

Obama’s daughters, Sasha and Malia, were there. They didn’t really do much, but they did wear coats of different shades of purple that got a lot of  attention on Twitter.

Reports of the daughters looking at smartphones and applying lip gloss highlighted their day. As did this .gif of Sasha yawning.

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After the first black president, who will be second?

President Obama’s historic election in 2008 and his reelection last year proved decisively that race is no longer an insurmountable hurdle to high political office in the United States.

But the current pool of possible candidates suggests that the next black president will not be taking the oath of office anytime soon.

“In the shadow of Barack Obama, there’s not been a lot of growth,” Cornell Belcher, a pollster who was involved in the president’s 2008 campaign, said. “It is really hard for minorities to get elected at the statewide level, and before you start talking about president, frankly, you have to get elected to statewide office.”

The notion of a post-Obama reformation of black politics has not been borne out at the ballot box, as black politicians continue to struggle to win the statewide offices that are the traditional paths to the presidency.

While the election of the first black president marked a significant break from the country’s history of racial prejudice, race still matters: The vast majority of black elected officials are put into office by black voters. Even Obama needed large numbers of black and Latino votes to win, particularly last year, when a majority of whites voters voted for someone else.

Ashley Bell, a former county official in Georgia who switched from the Democratic to the Republican Party with an eye on a future run for statewide office, said that Obama “did convince a lot of young black politicians that they can aspire to crossover offices. We may not live in a post-racial America, but I think we do live in a new era of politics where, on either side of the aisle, everyone knows that a good political candidate is one with crossover appeal, be they white or black or Latino.”

While the country’s changing demographics will favor political leaders of color in the future, the current landscape remains challenging for minority candidates seeking statewide office, particularly governorships and U.S. Senate seats, the typical steppingstones to presidential bids.

Deval L. Patrick (D-Mass.) currently is the nation’s only black governor, and Tim Scott (R-S.C.) is the only black member of the Senate, having recently been appointed to fill a vacancy.

Patrick, 56, is often mentioned as a potential presidential candidate, but he has said he has no plans to run in 2016. No other black politicians’ names have come up on the short list of credible contenders for the next national election.

On the GOP side of the aisle, former secretary of state Condoleezza Rice has been mentioned as a possible candidate but has steadfastly denied any interest. Colin Powell, who preceded Rice as President George W. Bush’s secretary of state, was once a favored GOP prospect, but he also declined to run.

Most recently, Herman Cain, a black Georgia businessman, was briefly a hit among Republican grass-roots activists in the run-up to the primaries, but he dropped his candidacy after a woman revealed a longtime extramarital affair and other women accused him of sexual harassment.

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Japan, US team probes Dreamliner battery maker

TOKYO: Japanese and American safety inspectors were on Monday probing the company that makes batteries for Boeing's Dreamliner after the aircraft's worldwide fleet was grounded over safety fears.

Aviation regulators were focusing on the lithium-ion batteries as the cause of a glitch that forced an All Nippon Airways (ANA) flight into an emergency landing last week.

Despite the investigation shares in GS Yuasa, which manufactures the batteries for the Dreamliner's advanced electronics systems, were up 0.95 percent to 318 yen in afternoon Tokyo trade.

The Japanese firm is just one of many contractors in a complex global chain that led to three years of delays before Boeing delivered its first 787 to ANA in 2011.

"Engineers from the FAA (US Federal Aviation Administration), Boeing and our aviation bureau started a probe this morning that is mainly focusing on GS Yuasa's production line," said Yasuo Ishii, a transport ministry safety official.

"They are checking on whether there have been any issues in the production process. We still don't know what caused the battery problem and so we are looking into all possibilities."

Ishii said the inspection does not mean authorities think GS Yuasa, headquartered in the western city of Kyoto, was to blame for the problems.

Investigators on Friday released a picture showing the blackened remains of the battery in the ANA plane. They are also inspecting the aircraft's black box which contains data from the flight that may help to assess how the battery was affected.

Boeing's cutting-edge new planes suffered a series of glitches earlier this month, prompting a global alert from the FAA that led to the worldwide grounding of all 50 operational 787s.

The risk of fire from overheating power packs emerged as a major concern after pilots were forced to land a domestic ANA flight on January 16 due to smoke apparently linked to the lithium-ion battery.

US investigators probing a fire on a Japan Airlines 787 after it landed in Boston on January 7 ruled out an overcharged battery as the cause, although the power packs were undergoing further tests.

On Monday, ANA said the Dreamliner's grounding forced it to cancel 335 flights up to next Sunday, affecting nearly 48,000 passengers.

Cancellations on domestic routes from January 16 to January 27 amount to 292 flights for 44,074 passengers, while 43 international flights have been cut, affecting 3,778 passengers, the airline said.

Flights affected include those from Tokyo to San Jose, Seattle and Beijing.

ANA also said it would not receive a Dreamliner that was on order due to the grounding, but declined to say if it would cancel any purchases it has made to date.

"We were supposed to receive our 18th plane from Boeing later this month," a company spokesman said.

"But as the suspension continues, it may be difficult for us to receive it as scheduled. So far, we have no plans to review anything related to our 787 contracts," he added.

ANA and its domestic rival JAL are key Dreamliner customers with Japan's two biggest airlines having ordered a combined 111 aircraft so far.

- AFP/al

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IAF chief Browne in Israel to deepen defence ties

JERUSALEM: Amid deepening ties between India and Israel, Chief of Air Staff NAK Browne has held strategic talks with his Israeli counterpart and will meet defence top brass, furthering the ongoing bilateral military cooperation.

"This is a part of routine reciprocal visits between chiefs of various wings of the defence forces of the two countries", a defence source here said.

However, "the visit underlines a very strong strategic relationship between the two countries where cooperation with India would probably rank only second to the United States", the source said.

Browne was India's first defence attache to Israel and is credited with setting up the defence wing at the Indian mission in 1997.

The visit started on Sunday with the presentation of a combined guard of honour at the Kirya (Israel's defence establishment base in Tel Aviv). Browne also met and discussed about ongoing cooperation with his host, Israel Air Force chief Amir Eshel.

The Chief of Air staff, who is also the current chairman of the chiefs of staff committee, is scheduled to call on Israeli defence minister Ehud Barak and Israel defence forces (IDF) chief, Benny Gantz, during his four-day visit.

At present, the two main projects between India and Israel are the upgrade of all its unmanned aerial vehicles (UAVs) with the three services and the medium range-surface to air missile system being co-developed by the DRDO and Israeli firms, officials said.

India has emerged as the largest buyer of Israeli arms and equipments. Israel's total defence exports to India is said to have touched $9 billion since 1997.

Israel has supplied a wide range of defence equipments to India, including the much talked about Phalcon AWACS (Airborne Warning and Control Aircraft) fitted on board Russian Ilyushin 76 four-engine jets.

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Attack at Algeria Gas Plant Heralds New Risks for Energy Development

The siege by Islamic militants at a remote Sahara desert natural gas plant in Algeria this week signaled heightened dangers in the region for international oil companies, at a time when they have been expanding operations in Africa as one of the world's last energy frontiers. (See related story: "Pictures: Four New Offshore Drilling Frontiers.")

As BP, Norway's Statoil, Italy's Eni, and other companies evacuated personnel from Algeria, it was not immediately clear how widely the peril would spread in the wake of the hostage-taking at the sprawling In Amenas gas complex near the Libyan border.

Map by National Geographic

Algeria, the fourth-largest crude oil producer on the continent and a major exporter of natural gas and refined fuels, may not have been viewed as the most hospitable climate for foreign energy companies, but that was due to unfavorable financial terms, bureaucracy, and corruption. The energy facilities themselves appeared to be safe, with multiple layers of security provided both by the companies and by government forces, several experts said. (See related photos: "Oil States: Are They Stable? Why It Matters.")

"It is particularly striking not only because it hasn't happened before, but because it happened in Algeria, one of the stronger states in the region," says Hanan Amin-Salem, a senior manager at the industry consulting firm PFC Energy, who specializes in country risk. She noted that in the long civil war that gripped the country throughout the 1990s, there had never been an attack on Algeria's energy complex. But now, hazard has spread from weak surrounding states, as the assault on In Amenas was carried out in an apparent retaliation for a move by French forces against the Islamists who had taken over Timbuktu and other towns in neighboring Mali. (See related story: "Timbuktu Falls.")

"What you're really seeing is an intensification of the fundamental problem of weak states, and empowerment of heavily armed groups that are really well motivated and want to pursue a set of aims," said Amin-Salem. In PFC Energy's view, she says, risk has increased in Mauritania, Chad, and Niger—indeed, throughout Sahel, the belt that bisects North Africa, separating the Sahara in the north from the tropical forests further south.

On Thursday, the London-based corporate consulting firm Exclusive Analysis, which was recently acquired by the global consultancy IHS, sent an alert to clients warning that oil and gas facilities near the Libyan and Mauritanian borders and in Mauritania's Hodh Ech Chargui province were at "high risk" of attack by jihadis.

"A Hot Place to Drill"

The attack at In Amenas comes at a time of unprecedented growth for the oil industry in Africa. (See related gallery: "Pictures: The Year's Most Overlooked Energy Stories.") Forecasters expect that oil output throughout Africa will double by 2025, says Amy Myers Jaffe, executive director of the energy and sustainability program at the University of California, Davis, who has counted 20 rounds of bidding for new exploration at sites in Africa's six largest oil-producing states.

Oil and natural gas are a large part of the Algerian economy, accounting for 60 percent of government budget revenues, more than a third of GDP and more than 97 percent of its export earnings. But the nation's resources are seen as largely undeveloped, and Algeria has tried to attract new investment. Over the past year, the government has sought to reform the law to boost foreign companies' interests in their investments, although those efforts have foundered.

Technology has been one of the factors driving the opening up of Africa to deeper energy exploration. Offshore and deepwater drilling success in the Gulf of Mexico and Brazil led to prospecting now under way offshore in Ghana, Mozambique, and elsewhere. (See related story: "New Oil—And a Huge Challenge—for Ghana.") Jaffe says the Houston-based company Anadarko Petroleum has sought to transfer its success in "subsalt seismic" exploration technology, surveying reserves hidden beneath the hard salt layer at the bottom of the sea, to the equally challenging seismic exploration beneath the sands of the Sahara in Algeria, where it now has three oil and gas operations.

Africa also is seen as one of the few remaining oil-rich regions of the world where foreign oil companies can obtain production-sharing agreements with governments, contracts that allow them a share of the revenue from the barrels they produce, instead of more limited service contracts for work performed.

"You now have the technology to tap the resources more effectively, and the fiscal terms are going to be more attractive than elsewhere—you put these things together and it's been a hot place to drill," says Jaffe, who doesn't see the energy industry's interest in Africa waning, despite the increased terrorism risk. "What I think will happen in some of these countries is that the companies are going to reveal new securities systems and procedures they have to keep workers safe," she says. "I don't think they will abandon these countries."

This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.

Read More..