Iraqi people desperately need to have their oil flowing again to
the global market. Restarting the flow of Iraqi oil would be a
win-win proposition, as not only the Iraqis, but also consumers
around the world would benefit from bringing the Iraqi oil supply
back on line.
main impediment to increasing Iraqi oil production at this point is
lack of security--terrorist sabotage and looting. The recent
attacks on pipelines and power stations are disrupting the flow of
Iraqi oil and are clearly aimed at further impoverishing the Iraqis
and even further disrupting their lives.
Since the end of major hostilities,
saboteurs have bombed Iraqi pipelines more than eight times,
causing $7 million per day in lost revenue. The culprits, including the remnants of
Saddam Hussein's Ba'ath party and Islamic radicals, are following
the old Leninist adage, "the worse, the better." They are betting
on an upsurge in resistance to the U.S. presence in Iraq if they
can severely disrupt the country's gasoline, electricity, and
cooking gas supply. Saddam loyalists, local Islamist militants, and
foreign jihadis who come to Iraq to fight the "infidels" believe
that by escalating Iraq's suffering they can drive the Americans
back across the ocean.
is also true that the lack of security, the scarcity of gasoline
and other fuels, and the intermittent supply of electricity are
impeding the post-war reconstruction. Today, Iraq is producing less
than half as much oil as it pumped before the war.
Saving Iraqi Oil Production
attacks on the oil infrastructure are part of a premeditated
campaign by the remnants of Saddam's regime and radical Islamist
mujahideen organizations to stop the flow of Iraqi oil, harm the
people of Iraq, and disrupt global oil markets. A secret memo dated
January 23, 2003, reportedly issued by Saddam's security services,
found in Iraq after the war, and published in the London-based
Saudi daily Al-Hayat, directs pro-regime elements to destroy power
generating stations and the water supply. It is likely that Saddam supporters and
other terrorists are applying the same tactics to the oil
is pumping 900,000 barrels per day--considerably less than the
pre-war production level of 2.2 million-2.4 million barrels per
day. The target of achieving pre-war production by the end of 2003
is in jeopardy, with further increases also in question. While
Halliburton subsidiary Kellog, Brown and Root (KBR) and the U.S.
Army Corps of Engineers are rehabilitating the Iraqi oil
infrastructure, their mandate does not include providing pipeline
Iraqi oil ministry has begun paying tribal leaders in the south to
keep saboteurs and thieves away from the pipelines. However, in at least
one case, Sheikh Hatem Al Obeidi, an influential tribal leader who
was on the government payroll to prevent attacks, instead abetted
sabotage and was arrested by U.S. troops. Without security, neither the U.S. nor
the Iraqis can repair the damage caused to Iraq's oil industry by
the war or rehabilitate Iraq's infrastructure, which had fallen
into a state of grave disrepair under Saddam.
Meanwhile, the continued attacks are
hurting both the Iraqi and Western economies. The West is still
suffering from relatively high oil prices, as the economic recovery
remains tenuous, and the Organization of Petroleum Exporting
Countries has cut production by 900,000 barrels a day. As a result of the
drop in Iraqi oil production and the Iraqi fiscal shortfall, U.S.
taxpayers will need to subsidize 50 percent of the $6 billion Iraqi
budget for fiscal year (FY) 2004.
September 7, President Bush announced that he would request $87
billion for assistance to Iraq and Afghanistan for FY 2004, with
the lion's share going to Iraq. A boost in oil production would remedy
the Iraqi economic crisis, give the Iraqi people hope, and decrease
levels of needed U.S. assistance funding.
The key impediments to reconstructing the Iraqi oil
industry and raising its oil revenues are attacks on the
4,350-mile-long pipeline system and the 11,184-mile-long electric
grid. The northern
pipeline, which runs from Kirkuk to the Turkish port of Ceyhan, was
attacked twice in June, twice in August, and twice again in
September. After an attack on August 16, the pipeline burned for
more than 48 hours. The pipeline from the giant Rumeila field in
the south has also been bombed twice.
Security analysts divide these attacks
into two distinct categories. The first is looting and plunder of
the oil infrastructure, including fields, pumping stations,
pipelines, and refineries. Organized crime is also raising its
head, as demonstrated by the recent interception of a barge with
1,000 tons of stolen Iraqi oil. Smugglers usually ship oil to Iran,
which reflags and re-exports it.
much more serious threat, however, comes from groups opposing the
U.S. and coalition presence, U.N. involvement, and the elements of
Iraqi society participating in the Governing Council.
far, senior U.S. officials, the Coalition Provisional Authority
(CPA), and the the U.S. military have not publicly identified the
main culprits in the pipeline attacks, which suggests that
intelligence is insufficient. The ferocious terrorist bombings
against personnel and the infrastructure continue.
main threat comes from three types of groups:
- Networks of the old regime operating
underground, such as Ba'ath party officials, Iraqi intelligence
officers, and Fedayeen Saddam militia.
- Radical Sunni groups, such as the
predominantly Kurdish Ansar al-Islam; Vanguard of Muhammad's Army;
and others whom President Bush has characterized as "Al-Qaeda type
fighters" and who are part of the international jihad movement. In his September 7
address to the nation, President Bush called Iraq "the central
front of the war against terrorism." Anti-Western fighters are crossing
into Iraq from Syria and the adjacent Gulf states, including Saudi
Arabia. Funding for
their movements comes from rich individuals and foundations in
these same Gulf states and from the global radical Islamic
- Extremist Shi'a groups, affiliated with
Mullah Muqtada Sadr, suspected of attacks on leading Shi'a
clerics. As the
result of the assassinations, a militia called the Badr
Brigade--the armed wing of the Supreme Council for the Islamic
Revolution in Iraq--was allowed to operate after attempts to ban it
by the coalition. Elements of the Lebanon-based Hizballah, an
organization on the U.S. terrorism list, and other radical
pro-Iranian groups and agents are also present in Iraq.
Iraqi pipelines have been paralyzed repeatedly by terrorism. On
August 13, the day Iraq started pumping oil to the Turkish port of
Ceyhan, terrorists attacked the Northern Kirkuk-Ceyhan pipeline.
The same pipeline was attacked again on August 30. The pipeline, with a
throughput capacity of 1 million barrels of crude per day, was
attacked four times between May and September. Attacks occurred near the towns of
Haditha and Hawja, which are close to the largest Iraqi oil
refinery at Bayji.
Iraqi oil production is also suffering
from years of centralized, state-run management of the oil sector,
long-term lack of investment, and inadequate technical maintenance
of the oil fields under Saddam. The absence of hard currency
reserves to repair and restart the oil industry is slowing
production. However, no investment and expansion are possible
unless the physical security of the vast Iraqi oil infrastructure
can be assured.
Security: Planning and Execution
The military component of seizing Iraq's oil
infrastructure during the war was brilliantly planned and executed.
Unlike during the Gulf War, when Saddam succeeded in setting
hundreds of Kuwaiti oil wells on fire, fewer than 10 wells were
ignited in Iraq. U.S. and British troops seized and secured the oil
fields, refineries, and pipeline infrastructure with minimal
casualties and material damage. The final draft of an internal
post-war report for the Joint Chiefs of Staff gave high marks for
pre-war gaming and combined operations during the time of
However, the post-war planning received
the lowest grade, with "capabilities that fell short of
expectations or needs, and need to be readdressed through new
Administrator Paul Bremer has admitted that the U.S. forces are
Securing the oil infrastructure was an important part of post-war
objectives, but the plans for post-war occupation of Iraq were not
ready when the war started, and the Pentagon was forced to alter
its original plan as the post-war violence escalated. Thus, it is not
surprising that 80 percent of the damage to Iraq's oil
infrastructure occurred after the war ended.
months after the war, the U.S.-led coalition force in Iraq consists
of 140,000 American troops and 20,000 international troops,
including one British division and one Polish-led division. They
are aided by over 54,000 Iraqi security personnel, including 37,000
police, 12,000 facility guards, and 5,000 border police and civil
September 4, in Baghdad, Secretary of Defense Donald Rumsfeld
called for putting up to 75,000-100,000 former Iraqi officers and
soldiers back in uniform to protect their country and fight its
enemies. He also criticized Saudi Arabia and Syria for not doing
enough to seal Iraq's borders.
Faced with attacks on oil pipelines, the
CPA is working to expand the Iraqi force charged with
infrastructure protection. During this past summer, it discussed
the provision of training to this security force with Kroll
Associates and other private U.S. companies. With more international troops coming
to Iraq, they can also assume responsibility for guarding the
pipelines and infrastructure and training the Iraqi security
forces, which will be tasked with protecting the pipelines in the
future. As long as security is not restored, however, the American
taxpayer will pay for this security force.
Criticism on the
Hill and Beyond
Senators and Representatives, including prominent
Republicans, as well as retired senior military officers have
criticized the planning, numbers, and troop deployments in Iraq.
Senator Richard Lugar (R-IN), chairman of the Senate Foreign
Relations Committee, stressed his criticism of the planning done
for post-war deployment but called on his colleagues to "rejoice"
that the plan has been corrected. Representative Curt Weldon
(R-PA), vice chairman of the House Armed Services Committee,
expressed reservations about the planning for the war last
Senator Kay Bailey Hutchison (R-TX),
Senator John McCain (R-AZ), columnist George Will, and Weekly
Standard editor William Kristol--all outspoken proponents of
Saddam's removal--have criticized the Administration for post-war
mishaps. It is less
surprising that Democrats, including Senators Joseph Biden (D-DE),
ranking Democrat on the Senate Foreign Relations Committee, and
Jack Reed (D-RI), a West Point graduate who served with the 82nd
Airborne, are also criticizing the Administration for mistakes in
post-war planning and deployment.
Among senior generals critical of the
post-war performance in Iraq is General Anthony Zinni, the former
head of the U.S. Central Command who has extensive experience in
the Middle East and serves as a consultant to the U.S. State
most prominent proponent of a bigger Army and a greater deployment
in Iraq is General Eric Shinseki, the recently retired Army Chief
of Staff, who called for "several hundreds of thousands of soldiers
on the ground" and warned against a "twelve division strategy for
the ten division army."
if the actual size of the U.S. Iraqi deployment is not increased,
it has to be refocused on intelligence and training of the Iraqi
forces, while the number of coalition troops from other countries
must go up, according to General John Abizaid, the current head of
This is also the opinion of the pre-eminent British military
historian, John Keegan. Increased intelligence collection,
anti-terrorist operations, and training should become the focus of
the U.S.-led force in Iraq.
The Bush Administration has issued an executive order
barring claims in U.S. courts against Iraqi oil or proceeds from
it. It has also
coordinated with other permanent U.S. Security Council members--the
United Kingdom, France, China, and Russia--on the imposition of a
moratorium on Iraq's national debt.
U.S. should further coordinate its actions with companies and
sovereign claimants (states) to delay reparations for Gulf War
damages and other claims. Iraq needs breathing space in order to
restart its cash flow and get its oil industry up and running
Providing Security for the
Iraqi Oil Infrastructure
Iraq's oil reserves are the third largest
in the world after Russia and Saudi Arabia. However, only 15 of its
73 discovered giant and large fields have been developed. Vast parts of the
country remain unexplored.
According to current estimates, the
investment needed to bring Iraqi production to about 3 million
barrels a day will exceed $3 billion over the next two to three
years. Over the next 10 years, $35 billion-$40 billion will be
needed to boost production from the current 1.2 million-1.4 million
barrels per day (MBD) to the pre-1979 production level of 5-6
Before serious reconstruction work can
begin, however, the physical security of the infrastructure needs
to be achieved. To this end, the Bush Administration, including the
CPA, and the Iraqi Cabinet should:
an assessment of security needs to provide for infrastructure
protection in conjunction with the Iraqi oil ministry. Before
serious reconstruction of the oil industry can begin, the coalition
and the Iraqi cabinet must be able to assure physical security of
Iraqi energy infrastructure.
- Increase the number of Iraqi guards as
needed to provide security. However, the rank-and-file and all
officers must be adequately screened to root out Saddam's hard-core
supporters and Islamic radicals.
coalition forces, especially the British, to train Iraqi security
forces, including pipeline security units. British instructors have
earned high marks the world over providing security and military
- Hire an
international security company to administer pipeline security and
train the Iraqi security forces tasked with protecting the
pipelines to complement military training.
the guards for the task at hand; deployment without training is
self-defeating. The CPA has cut the training time for Iraqi police
from 12 weeks to eight, and the quality of this force leaves much
to be desired.
Similar shortcuts in training for pipeline protection forces could
lead to undesirable results.
and conduct a public information campaign explaining to the Iraqis
the importance of pipeline security and the resultant oil revenue.
Such a campaign should emphasize the direct link between oil
revenue and the provision of basic services and the growth in
a technological package to enhance infrastructure security, using
satellite imaging, unmanned aerial vehicles/drones, video cameras,
and sensors. This package would be integrated with the security
provider (state or private).
additional funding to repair the oil infrastructure. The rundown
state of the oil infrastructure will require significant
investment: up to $3 billion per year to get it up and running
again. These funds can be provided on credit to the Iraqi Governing
Council or the oil ministry, to be repaid from future oil
with the Iraqi oil ministry leadership appointed by the Coalition
Provisional Authority and the Council to intensify the purge of
former Ba'ath officials from the oil ministry and the oil
Without adequate security, Iraqi oil will
not reach global markets. Rebuilding the Iraqi oil sector through
Western investment will not work as long as terrorists and looters
are able to target technical personnel, pipelines, power lines, and
other assets necessary for restarting oil production.
liberating Iraq, the U.S. undertook an immense responsibility.
Without Iraqi oil, the U.S. taxpayer will have to foot the bill for
the occupation and reconstruction of Iraq. U.S. consumers will pay
higher prices at the pump, and the U.S. and global economies will
endure an indirect tax by paying higher energy prices. The
alternative to restoring Iraqi oil production--misery for the Iraqi
people and victory for the terrorists--is not an option.
Ariel Cohen, Ph.D.,
is Research Fellow in Russian and Eurasian Studies in the Kathryn
and Shelby Cullom Davis Institute for International Studies at The