Saturday, May 17, 2008
The insurgents in Iraq know that keeping its oil flowing is crucial to U.S. success in the war -- and they're doing all they can to muck things up.
Aug 16, 2004 | Last month, Defense Secretary Donald Rumsfeld assured Americans that Iraq "continues to calm down." But the bitter reality is that America is losing the war in Iraq. And it's not just because the interim Iraqi government can't stop the suicide bombers or prevail over the soldiers loyal to Shiite rebel leaders like Muqtada al-Sadr. It's also because neither the U.S. nor the interim Iraqi government can control the flow of Iraq's oil.
The bad news from the oil fields continued last week when men loyal to Sadr surrounded several Iraqi government buildings and threatened to attack pipelines and other oil facilities unless the government stopped pumping oil through the pipes that feed Iraq's oil export terminals in the Persian Gulf, Mina al-Bakr and Khor al-Amaya. (Mina al-Bakr was built by Halliburton for the new Baathist government in the mid-1970s, when the United States did not have diplomatic relations with Iraq.) The Iraqi government reportedly stopped pumping oil in an effort to stem unrest in Basra, a city that for months has been viewed as more pro-Western than other areas.
Saboteurs also bombed one of the two main pipelines that feed the terminals. Repair crews had the 48-inch line fixed by Aug. 11, but it was unclear when -- or if -- the pipeline would be put back into service. Every day that the Persian Gulf terminals are shut, it costs the Iraqi government at least $50 million in lost oil revenue.
The situation in the northern oil fields is even worse. The easiest way to move oil from the oil-rich fields near Kirkuk to market is through a pipeline that runs to the Turkish port at Ceyhan. But ever since U.S. forces invaded Iraq, that pipeline has suffered more hits than Mike Tyson. The pipeline has been bombed so frequently that Iraqi officials are openly talking about shutting it down.
Indeed, most of the news from Iraq's oil sector, despite some $2.3 billion in investment by the United States in the months since Saddam Hussein was deposed, has been bad. Recent figures show that oil production now approaches 2.3 million barrels of oil per day. Exports have reached about 1.9 million barrels per day -- a fraction of the amount Iraq was exporting in the days before the first Iraq war in 1991. Although the exports are far less than the Pentagon had hoped for, they are helping Iraq's nascent government stay afloat. And the new regime has been bolstered by record-high oil prices, which show no sign of abating anytime soon. On Aug. 13, prices for September delivery of light sweet crude hit a record high of $45.93 a barrel on the New York Mercantile Exchange.
But along with the rising prices and an increase in production has come a dramatic increase in the number of insurgents. According to the New York Times, the number of insurgents in Iraq has grown from 2,500 in April 2003 to some 20,000 today. And those men understand that America's Achilles' heel in Iraq is oil.
"Whoever controls Iraqi oil controls Iraq's destiny," says A.F. Alhajji, an oil industry analyst at Ohio Northern University who closely follows the Persian Gulf. And now, says Alhajji, the insurgents are ensuring that Iraq's destiny is to continue in chaos. By strangling the country's oil exports, they are cutting off the lifeblood of Iraq's new government. Without reliable flows of cash from its oil industry, Iraq will not be able to rebuild. And the U.S. Congress is unlikely to fund the Iraqi rebuilding effort unless it shows some results quickly.
Since last June, insurgents have attacked various parts of Iraq's oil infrastructure at least 90 times. That figure is probably a fraction of the real number. Gal Luft, executive director of the Institute for the Analysis of Global Security, a Washington think tank that tracks energy issues, says the real figure may be twice as high. But the Pentagon is reluctant to talk about the attacks on oil targets. "Nobody really wants to provide information because it's a political hot potato," says Luft. According to IAGS's pipeline watch Web site, there were 90 attacks on oil targets between June 2003 and early August of this year. On Aug. 5 alone, there were three attacks, including an additional bombing of the Kirkuk-to-Ceyhan line. That same day, a bomb hit a gas pipeline that feeds an electricity plant in Bayji, north of Tikrit.
For the insurgents, pipelines are attractive targets. Some 4,400 miles of pipelines crisscross Iraq. The Kirkuk-to-Ceyhan line -- which, according to IAGS, has been bombed 11 times in the past 15 months -- has become the insurgents' favorite target. (Other sources say that pipeline is being bombed much more frequently -- at least once a week, sometimes more.) The ongoing cost of repairing the Kirkuk-to-Ceyhan line and the nearly impossible task of protecting it from further attacks are two reasons Iraqi officials have considered shutting it down, a move that makes sense to Alhajji. "It's not worth it anymore," he says, adding that the expense of patrolling the line, combined with the lost oil and repair costs, has made the pipeline expendable.
But shutting down the Kirkuk-to-Ceyhan line would have negative repercussions for both the Turks and the Kurds. The Kurds, who have been the most reliable supporters of the American invasion, are very concerned about losing the revenue that comes from the oil fields in northern Iraq. If that revenue stops flowing, the Kurds will lose a powerful voice at the bargaining table. The Turkish government, which is nominally pro-American, will be angered if the pipeline is shut down because the Turks are paid transit fees on oil shipped through the line. And there's another danger: Closing the northern export route would enable insurgents to concentrate all their disruptive efforts on the pipelines and pumping stations in the central and southern parts of the country, which feed the Persian Gulf oil terminals.
Furthermore, if the line is shut down, there is a real possibility that it could be looted, just as other parts of the Iraqi oil industry were looted in the weeks after American troops got to Baghdad. If pumps and other parts are stolen, the Iraqi government will be limited to exporting its oil through the Persian Gulf for months, if not years, after order returns to the country.
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