Treasure of Khan

  "I'll pass the word," Zhou said and nodded.

  The containership terminal where they worked operated around the clock. In the nearby waters of the East China Sea, a steady stream of transport ships milled about, waiting their turn at the docks. China's abundant labor pool ground out an endless supply of cheap electronics, children's toys, and clothing that were immediately gobbled up by the consumer markets of the industrialized nations. But it was the lumbering containership, the unsung workhorse of commercial trade, which empowered global commerce and allowed the Chinese economy to skyrocket.

  "See to it. And keep after the loading crew. I'm getting complaints again about slow turnarounds," Qinglin grumbled. He lowered his clipboard and slid a yellow pencil over his right ear, then turned and walked away. But he stopped after two steps and slowly wheeled back around, his eyes widening as he stared at Zhou. Or at least Zhou thought he was staring at him.

  "She's on fire," Qinglin muttered.

  Zhou realized his supervisor was looking past him and turned to see what he meant.

  In the harbor surrounding the terminal, a dozen ships milled about the area, an assorted mix of huge containerships and jumbo supertankers overshadowing a handful of small cargo ships. It was one of the cargo ships that distinguished itself, trailing a heavy plume of black smoke.

  Through Zhou's eyes, the ship looked to be a derelict, well overdue for an appointment with the scrapyard. She was at least forty years old, he guessed, with a tired blue hull that in most places had turned scaly brown from the onslaught of rust. Black smoke, growing thicker by the second, billowed from the forward hold like an inverse waterfall, obscuring most of the ship's superstructure. Yellow flames danced out of the hold in random leaps, occasionally bursting twenty feet into the air. Zhou turned his gaze toward the ship's prow, which cut a frothy white wake through the water.

  "She's running fast . . . and heading toward the commercial terminals," he gasped.

  "The fools!" Qinglin cursed. "There's no place to run ashore in this direction." Dropping his clipboard, he took off sprinting down the terminal toward the dock office in hopes of radioing the impaired ship.

  Other ships and shore facilities had already witnessed the fire and were filling the airwaves with offers of assistance. But all of the radio calls to the smoking vessel went unanswered.

  Zhou stayed perched at the end of the container dock, watching as the burning ship steamed closer to shore. The derelict narrowly skirted between a moored barge and a loaded containership in a deft move that Zhou considered miraculous, given the blanket of smoke engulfing the ship's bridge. For a moment the ship appeared headed for the container terminal adjacent to Zhou's, but then the ship made a sweeping turn to port. As the vessel's path seemed to straighten out, Zhou could see that the ship was now headed toward Ningbo's main crude oil loading facility on Cezi Island.

  Oddly, he noted that there were no men on deck fighting the flames. Zhou scanned the length of the ship and even got a glimpse of the bridge through the smoke as the ship turned away from him, but he couldn't catch sight of any crew members aboard. A shiver went down his spine as he silently wondered if it was an unmanned ghost ship.

  A pair of deepwater tankers straddled Ningbo's main crude offloading terminal, which had recently been expanded to accommodate four supertankers. The burning derelict took a bead on the leeward tanker, a black-and-white behemoth owned by the Saudi Arabian government. Alerted by the frantic radio traffic, the tanker's executive officer let loose a blast from the ship's deafening air horn. But the burning freighter held steady. The disbelieving exec stood peering at the flaming vessel from his outside bridge wing, powerless to do anything more.

  Alerted by the warning blast, the tanker's crewmen scrambled like ants to flee the floating incendiary tank, converging onto the lone gangplank. The exec stood and watched unblinking, now joined by the harried captain, who stared waiting for the rusty ship to slice into them.

  But the impact never came. At the last second, the flaming ship wheeled again, its bow swinging sharply to port and just missing the flanks of the supertanker by a few feet. The freighter seemed to straighten, running parallel with the tanker and taking a bead on the adjacent docking terminal. A semifloating ramp built on sectional pylons that ran six hundred feet into the harbor, the terminal carried the pipelines and pumps used to off-load the tanker's supply of crude oil.

  The rusty derelict now ran as straight as an arrow, the flames from its hold engulfing the entire forward deck. No attempt had been made to slow the vessel, and she, in fact, appeared to have actually gained speed. Striking the end of the terminal, the rusty ship's bow tore through the wooden platform like it was a box of matches, sending splintered pieces of the dock flying in all directions. Pylon after pylon disintegrated under the onslaught, barely slowing the vessel as it plowed forward. A hundred yards ahead, several crewmen who had been fleeing the big tanker froze on the gangplank, unsure of which direction to find safety. The answer was presented a few seconds later when the ship drove through the base of the plank. Hidden by smoke and flames, a jumble of steel, wood, and humanity that was the gangplank surged underwater and was quickly lost beneath the churning propellers of the ship.

  The ship continued to drive forward, but, at last, began to stagger as a tangled mass of debris piled up before the bow. Yet the old ship had legs and plowed ahead in the last gasp of its life, fighting to reach shore. Mashing through the final pylon, the spent ship made a final surge onto the shorefront off-loading and storage facility. A thunderous crash, accompanied by waves of black smoke, echoed across the island as the mystery ship finally ground to a halt. Those who witnessed the carnage let out a sigh of relief that the worst was apparently over. But then a muffled blast erupted deep in the bowels of the ship, which blew the bow off in a wall of orange fire. In seconds, flames were everywhere, devouring the spilled crude oil that flooded around the ship. The fire raced across the layer of floating oil that reached into the harbor and climbed up to engulf the moored tanker. The entire island was quickly clouded in thick black smoke, which hid the inferno below.

  Across the bay, Zhou stood in astonishment as he watched the flames spread across the terminal complex. Staring at the decrepit freighter as it wallowed and rolled onto its side after the fire inside melted its innards, he grasped to comprehend what kind of suicidal maniac would destroy himself in such a rage.

  • • • •

  A mile away from Zhou's dock, a faded white runabout motored slowly off Cezi Island. Concealed beneath a low-slung canvas tarp, a coffee-skinned man lay on the bow, surveying the burning holocaust ashore through the lens of a small telescope affixed to a laser sight. Appraising the damage with an upturned grin of satisfaction, he disassembled the laser device and accompanying wireless transmitter that minutes before had relayed course directions to the rusty derelict's automatic navigation system. As smoke drifted over the water, the man hoisted a stainless steel suitcase over the gunnel and gently let it slip from his fingers. A few seconds later, the suitcase and its high-tech components found a permanent home under three inches of soft mud in the murky depths of Ningbo Harbor. The man turned to the boat's pilot, exposing a long scar that ran across the left side of his face.

  "To the city marina," he directed in a low voice. "I have a plane to catch."

  • • • •

  The fires raged for a day and a half before the port fire control authorities extinguished the blaze. A fast acting trio of tugboats saved the oil tanker from destruction, converging on the big ship through flaming waters and shoving the mammoth vessel into the bay, where the shipboard fires were quickly controlled. The onshore facilities were less fortunate. The Cezi Island terminal was completely destroyed, taking the lives of ten oil workers. An additional half-dozen crewmen from the supertanker were still missing and presumed dead.

  When investigators were finally able to board the mystery derelict, they were stumped to find no bodies aboard. The eyewitness accounts were be
ginning to sound correct. It was a deserted ship that had seemingly sailed itself. Unknown in the local waters, the ship was traced by insurance agents back to a Malaysian ship broker who had sold it at auction to a scrap dealer. The scrap dealer had vanished, and his business turned out to be a shell company with a phony address and no traceable links.

  Investigators speculated a disgruntled former crew was to blame, angered with the ship's captain and setting the vessel ablaze in revenge. The "Mystery Fire Ship of Ningbo," as it came to be known locally, had sailed to a fiery demise at the Cezi Island terminal by sheer luck. Hang Zhou suspected otherwise, however, and forever believed that somebody had guided the ship of death to shore.

  -12-

  JAN, WE'RE ON in ten minutes in the Gold Conference Room. Can I get you a coffee before we start?" Jan Montague Clayton stared at the coworker standing in her doorway like he'd just landed from Mars.

  "Harvey, my urine has turned the color of cappuccino, and there's enough caffeine in my bloodstream to fuel the space shuttle. But thanks anyway. I'll be along in a moment."

  "I'll make sure the projection system is set up," Harvey replied sheepishly, then disappeared down the corridor.

  Clayton couldn't count the number of coffees she had consumed in the last two days, but knew it had been her primary sustenance. Since the news of the earthquake at Ras Tanura had broken the day before, she had been glued to her desk, developing economic impact assessments while quietly gathering oil company reactions from the slate of industry insiders that filled her Rolodex. Only a brief foray to her stylish apartment in the East Village at two in the morning for a catnap and change of clothes had offered a respite from the state of chaos that surrounded her.

  As a senior commodities research analyst for the investment banking firm of Goldman Sachs, Clayton was used to working twelve-hour days. But as a specialist in oil and natural gas futures, she was unprepared for the fallout from Ras Tanura. Every sales associate and fund manager in the firm seemed to be calling her, crying for advice on how to handle their clients' accounts. She finally had to unplug her phone in order to concentrate, while steering well clear of her e-mail account. Taking a last look at some oil export figures, she stood and patted down her beige Kay Unger suit, then picked up a laptop computer and headed for the door. Against her better judgment, she stopped suddenly and wheeled back toward the desk, where she scooped up a ceramic cup half full of coffee.

  The conference room was a packed house, the mostly male crowd waiting anxiously for her report. As Harvey opened the meeting with a brief economic overview, Clayton studied the audience. The sprinkling of partners and senior managers was easy to spot, their premature-gray hair and paunch bellies signaling the lifetime of hours spent inside the building's walls. At the other spectrum were the younger sales associates, cutthroat and aggressive in their desire to climb the firm's ladder to the holy land of seniority, where seven-figure year-end bonuses were regularly pocketed. Half of the overpaid and overworked investment professionals didn't care whether Clayton's predictions would be accurate or not so long as they had someone to blame for their trades. Yet those who paid attention quickly learned that Clayton knew her stuff. In the short time she had been with the firm, she had already acquired the reputation as a savvy analyst with an uncanny ability to predict trends in the market.

  "And Jan will now discuss the current state of the oil markets," Harvey concluded, passing the stage to Clayton. Plugging her laptop into the projection system, she waited a moment for her PowerPoint presentation to appear on the screen. Harvey walked to the side of the conference room and closed the blinds of a large picture window that offered an impressive view of lower Manhattan from the Broad Street high-rise.

  "Ladies and gentlemen, this is Ras Tanura," she began, speaking in a soft but confident voice. A map of Saudi Arabia jumped to the screen, followed by photos of an oil refinery and storage tanks.

  "Ras Tanura is Saudi Arabia's largest oil and liquid natural gas export terminal. Or was, rather, until yesterday's massive earthquake. Damage assessments are still under way, but it appears that nearly sixty percent of the refinery was destroyed by fire and that at least half of the storage facilities suffered major structural damage."

  "How does that impact oil exports?" interrupted a jug-eared man named Eli, munching on a doughnut as he spoke.

  "Hardly at all," Clayton replied, pausing to let Eli take the bait.

  "Then why the big oil shock?" he asked, crumbs spraying off his lips.

  "Most of the refinery's output is utilized by the Saudis themselves. What will impact oil exports is the damage incurred to the pipelines and shipping terminals." Another image appeared on the screen, showing a dozen supertankers docked at the Sea Island loading terminal.

  "Those floating terminals should have been safe from the earthquake at sea," someone commented from the rear of the room.

  "Not when the epicenter of the earthquake was less than two miles away," Clayton countered. "And those aren't floating terminals, they are fixed in the seabed. Shifting sediments from the earthquake caused a complete collapse of this offshore terminal, which is known as Sea Island. The Sea Island terminal handles the largest of the supertankers and that capacity has been completely wiped out. Several additional shore-based loading piers were destroyed as well. It appears that over ninety percent of Ras Tanura's export infrastructure has been damaged or destroyed. That is why there has been a 'big oil shock,' " she said, staring at Eli.

  A hushed gloom fell over the room. Finally finishing his doughnut, Eli broke the silence.

  "Jan, what kind of volume does that translate to?"

  "Nearly six million barrels a day of Saudi export oil will immediately be removed from the supply chain."

  "Isn't that nearly ten percent of the daily world demand?" a senior associate asked.

  "It's closer to seven percent, but you get the picture."

  Clayton brought up the next slide, which showed the recent spike in price of a barrel of West Texas intermediate crude oil, as traded on the New York Mercantile Exchange.

  "As you know, the markets have reacted with their usual rabid hysteria, blasting the spot price of crude to over one hundred twenty-five dollars a barrel in the last twenty-four hours. Those of you in equities have already seen the resulting collapse on the Dow," she added, to a chorus of groans and nodding heads.

  "But where do we go from here?" Eli asked.

  "That's the sixty-four-dollar question, or one-hundred-twenty-five-dollar, rather, in our case. We're dealing in fear at the moment, driven by uncertainty. And fear has a habit of producing irrational behavior that isn't easy to predict." Clayton stopped and took a sip from her coffee. She had her audience hanging on every word. Though her attractive looks always drew attention, it was her knowledge that had the crowd enraptured now. She savored the taste of power for a moment, then continued.

  "Make no mistake. The destruction at Ras Tanura is going to leave a devastating mark around the world. On the home front, there's going to be an immediate whack to the domestic economy that will rival the post 9/11 downturn. When that one-hundred-twenty-five-dollar barrel of oil trickles down to seven dollars for a gallon of gas next week, Joe Consumer is going to park his Hummer and start riding the bus. Higher prices for everything from diapers to airline tickets will ripple through the economy. No one is prepared for that degree of run-up in price, which will throw a roadblock to consumer purchasing in short order."

  "Is there anything the president can do to help?" Eli asked.

  "Not much, though there are two things that might soften the blow. Our country's Strategic Petroleum Reserve is now sitting at full capacity. If the president so elects, he could draw down on the reserves to replace some of the shortages from Saudi Arabia. In addition, the drilling in the Arctic National Wildlife Refuge approved by the prior administration has now come on line, so the Alaska Pipeline is now running at full capacity again. That will provide a slight boost to domestic production numbers.
Neither item will be sufficient to prevent fuel shortages in some regions of the country, however."

  "What can we expect in the long term?" he inquired.

  "While we can't forecast the impact that fear will have on the markets, we can predict the dynamics of supply and demand that will ultimately prevail. The spike in price should soften current levels of demand over the next few months, easing the pressure on oil prices. In addition, the other ten OPEC countries will clamor to make up Saudi Arabia's lost exports, though it is unclear whether they have the infrastructure to cover the shortfall."

  "But wouldn't OPEC want to keep the price of oil over one hundred dollars?" Eli pestered.

  "Sure, if demand stayed constant. But we're going to face a sharp economic contraction as it is. If the price was maintained at one hundred twenty-five dollars arbitrarily, you would see a global economic collapse rivaling the Great Depression."

  "You don't think that's in the cards?"

  "It's possible. But OPEC doesn't want to see a worldwide economic collapse any more than the industrialized nations do, as that will reduce their revenues. The main concern today is still one of supply. We witness another supply disruption, then all bets are off."

  "So what's the investment play?" Eli asked pointedly.

  "Initial estimates from Ras Tanura suggest that the shipping terminals can be repaired or replaced within six to nine months. My trading recommendation would be to short oil positions at the current price, with the expectation that pricing will retreat to more moderate levels within nine to twelve months."

  "You're sure of that?" asked Eli with a hint of skepticism.

  "Absolutely not," Clayton fired back. "Venezuela could be hit by a meteorite tomorrow. Nigeria could be taken over by a fascist dictator next week. There are a thousand and one political or environmental forces that could disrupt the oil markets in a heartbeat. And that's the unnerving point. Any bit of further bad news may drive us past a recession and into a depression that will take years to recover from. But it seems a bit tenuous to me to assume that another natural disaster will strike soon with the impact of Ras Tanura. Are there any more questions?" Clayton asked, reaching her final slide.