Anti-counterfeiting Ink - an alternative way of combating oil theft?

post by maximkazhenkov · 2019-10-19T23:04:59.069Z · score: -7 (4 votes) · LW · GW · 4 comments

In recent years, oil theft from pipelines has escalated in Mexico - $7.4 billion in fuel have been stolen since 2016. Pipeline tapping has increased from 211 occurrences in 2006 to over 7000 times in 2016. The cartels seem to have gotten involved as a means to diversify away from narcotics sale. The government has responded with heavy-handed crackdown, deploying federal security forces to patrol frequently tapped pipeline sections, arresting corrupt Pemex employees and even going as far as shutting down entire pipelines and resorting to tanker trucks and trains instead.

The last measure in particular has resulted in gas shortages and panic buying in the states the pipelines traversed, ironically increasing the incentive for oil thieves - a situation not too dissimilar to the war on drugs. This ultimately culminated in an explosive incident that killed over 130 people, most of which locals trying to gather free gas from a pipeline puncture. (It also doesn't bode well for tanker truck drivers as they're the next target)

I've been thinking of an alternative solution: Suppose you have two chemical compounds A and B, the exact formula of which you keep secret. You add a certain concentration (1mg/L, let's say) of compound A at the source, and add compound B at the sink upon arrival (also 1mg/L for simplicity). The police can then easily identify oil stolen from the pipeline which only contains compound A (the reason for using 2 compounds instead of 1 is that we still want to allow the sale of oil from other legal sources that don't include either compound, e.g. imports).

This solution is similar to anti-counterfeit ink used in banknotes (or digital signatures, if you like). The compounds must be easy to detect (verify) but very hard to produce (duplicate). If the criminals get a hold of compound B, they can counterfeit stolen oil; if they get a hold of compound A, they can sabotage the system by spiking legal oil with it.

But guarding a small amount of secret compounds should be far easier than guarding the bulk material being transported over thousand of kilometers. After all, banknote printing facilities do it all the time with their anti-counterfeiting ink and pharmaceutical companies do it with otherwise illicit opioids. The security risk has been funneled through a narrow corridor.

Of course, these compounds must also be hard to separate from the oil, but not in the absolute sense: Since oil is relatively low value per kg, it only needs to be economically unviable to do the distillation on a small scale (large-scale operations are easy to spot and shut down by the government), similar to ethanol in lighter fluids.

Currently, stolen oil is sold both to gas stations and on the side of the road at a discount by thieves. We could start with monitoring gas stations by handing out detectors for compound A and B to inspectors. Gas stations whose gas doesn't show a 1:1 ratio of the compounds must have been at least partially supplied by illegal sources. We can even calculate how much exactly of the oil was illegal and tax/fine them accordingly.

This doesn't require a corruption-free police staff; as long as some of the inspectors are doing their job honestly there will be a disincentive for selling illegal oil. If a police inspector is afraid of being targeted by the cartels (as is often the case in Mexico), he could even install the detector in his car's gas tank and camouflage himself as a regular customer.

The enforcement can be expanded to include gas tank spot checks of passing cars on highways / at toll stations. Heck, as long as detectors are cheap to make and impossible to reverse-engineer to crack the compound formula, just distribute them among regular drivers so they can check for themselves (the "quality" of the gas they're buying).

Is there a glaring flaw with this proposal? Has it (or something similar) ever been implemented anywhere? Please share your thoughts!

Sources:

Mexico is being held to ransom by oil thieves and systemic corruption

'Huachicoleo': Oil theft in Mexico and around the world

Mexico Declares Victory Over Fuel Thieves. But Is It Lasting?

Inside the Deadly Business of Stealing Fuel in Mexico

4 comments

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comment by lsusr · 2019-10-20T03:09:23.775Z · score: 1 (1 votes) · LW · GW

Suppose you have two chemical compounds A and B, the exact formula of which you keep secret.

The fundamental problem with this proposal is that it relies on "security through obscurity". If criminals figure out how to identify and synthesize chemical compounds A and B then the entire system no longer works. The best security systems usually have a key that's easy to change when enemies crack it. In this case, we'd have to replace the chemicals, the chemical manufacturing systems and the detection systems. That's very expensive.

Criminals synthesizing the chemical compounds is virtually guaranteed because it's very difficult to distribute a chemical to every gas station in the country and keep it secret. At the same time, criminals are good at synthesizing weird substances. For example, they'll often make small chemical modifications to addictive drugs to make them legal. Even if criminals are incapable of making the chemical domestically, it'd be easy to smuggle in the chemical in from a foreign country.

Has it (or something similar) ever been implemented anywhere?

You might be interested in denatured ethanol. When a government wants to legalize ethanol for non-drinking (and therefore lower-tax) purposes it is made undrinkable.

If we had a chemical that turned un-burnable oil into burnable oil then your proposed system might be more robust, but I do not know of such a substance that would be economically viable.

comment by maximkazhenkov · 2019-10-20T16:51:34.019Z · score: 1 (1 votes) · LW · GW
The fundamental problem with this proposal is that it relies on "security through obscurity"

I don't think that description is accurate. It relies on asymmetry between verification and duplication.

Criminals synthesizing the chemical compounds is virtually guaranteed because it's very difficult to distribute a chemical to every gas station in the country and keep it secret.

Distributing the substances to every gas station is unnecessary. Transportation pipelines are expensive infrastructure projects with very high throughput, so there are only a few of them to guard. The real difficulty is that they're very, very long and the criminals can tap at any point, so it's infeasible to police the entire stretch 24/7 and it'd be great if we could reduce the policing to merely the few end points. The "last mile" is much less problematic since it's close to population centers where witnesses are plenty and police reaction time is short (a tapping operation takes ~40 minutes).

Also, we're not keeping the usage of chemicals a secret any more than we'd keep the existence of passwords a secret.

At the same time, criminals are good at synthesizing weird substances.

That's because these weird substances have different purposes, e.g. narcotics. Here, we are optimizing for nothing but the asymmetry between verification and duplication, because a signature is all the substance is. A closer analogy would be banknotes; they're also specifically optimized for difficulty of duplication. And bank note printers have thus far been very successful, else cartels would not bother smuggling drugs when they could just print money, and paper-currency based economy would become impossible.

comment by lsusr · 2019-10-20T21:21:49.793Z · score: 1 (1 votes) · LW · GW

What are some example substances you could use for chemical compounds A and B?

comment by maximkazhenkov · 2019-10-20T22:42:55.485Z · score: 1 (1 votes) · LW · GW

I don't have the relevant expertise, unfortunately. I'm thinking protein sequence or some other biomolecule.