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

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

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