US embassy cable - 05BAGHDAD2790

C O N F I D E N T I A L SECTION 01 OF 05 BAGHDAD 002790 
 
SIPDIS 
 
E.O. 12958: DECL: 06/30/2015 
TAGS: ENRG, EPET, MASS, MOPS, EFIN, EAGR, PREL, PGOV, IZ 
SUBJECT: IRAQ INFRASTRUCTURE SECURITY:  MOD PLAN UPDATE TO 
NATIONAL ENERGY COUNCIL 
 
REF: A. A. BAGHDAD 2694 
     B. B. BAGHDAD 2593 AND PREVIOUS 
 
Classified By: ECONOMIC MINISTER COUNSELOR ANNE DERSE FOR REASONS 1.4 B 
 
 AND D 
 
 1. (C) SUMMARY: Iraq's National Energy Committee (NEC) 
reviewed the Ministry of Defense's (MOD) most recent plan for 
northern oil pipeline and infrastructure security during its 
10th meeting on June 27.  DPM Chalabi and other NEC members 
were frustrated with MOD's failure to produce what they 
consider a viable plan, and are also concerned over the 4-6 
month-long delay in MOD's current proposal until oil 
infrastructure protection will begin in earnest. The DPM 
expressed disappointment in the plan and the ITG's inability 
to use existing, trained Iraqi armed forces -- instead of the 
tribal battalions, which he views as largely ineffective -- 
to secure the key infrastructure in Iraq.  The tribal forces 
the ITG are now paying to protect the pipelines are the same 
people who are destroying the pipelines, he maintained. The 
DPM stated that the insurgents are trying to isolate Baghdad 
by attacking infrastructure, citing recent attacks on the 
Baghdad water supply facilities, oil and refinery product 
pipelines, electricity lines, towers, and substations. The 
DPM stressed, "infrastructure protection for oil is just as 
important as any other element of Iraqi security."  The 
Ministry of Water Resources (MOW) reported planned increases 
from 300 m3 per second to 500 m3 per second of flows of water 
from Turkey and a new study to revitalize the Bakhme dam to 
generate hydropower.  The Ministry of Electricity (ME) 
reported on plans to increase the availability of electricity 
by 2500-3000 MW by summer 2006 in Iraq. END SUMMARY. 
 
2. (SBU) DPM Ahmed Chalabi convened the 10th meeting of the 
ITG National Energy Committee on June 27.  The purpose of the 
meeting was to review the revised Ministry of Defense plan to 
defend the northern Iraqi oil pipelines.  Those attending 
included the Deputy Minister of Electricity (ME), Deputy 
Minister of Water Resources (MWR), Deputy Minister of Finance 
(MOF), Deputy Minister of Industry and Minerals (MIM), 
Minister of Oil (MOO), Deputy Minister of Interior (MOI), MOD 
Director General of Programs and Budget, Deputy Commander of 
the Iraqi Armed Forces, EMINCOUNS, IRMO Director and emboffs. 
 
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IRAQI ARMED FORCES UPADATED INFRASTRUCTURE PROTECTION PLAN 
--------------------------------------------- ------------- 
 
3.  (C) The Deputy Commander of the Armed Forces updated the 
NEC on the revised infrastructure protection plan (reftels: 
BAGHDAD 2694, 2593 and previous).  The plan is to use the 
battalions of tribal forces in the Kirkuk area, which are 
currently known as the Strategic Infrastructure Battalions 
(SIB), to be the primary guards for the linear oil 
infrastructure between Kirkuk and Bayji.  These forces are to 
be recruited and trained over the next several months while 
concurrently guarding the pipelines. He said the US 42ID from 
Tikrit would be "training the trainers" in the four SIBS one 
company per cycle for three weeks, followed by a two week 
period of training the battalions. MOO will provide special 
lectures to the soldiers on oil security and protection of 
the pipelines. The MOD has begun to compile the required 
equipment list for the battalions.  The Deputy Commander of 
the Armed Forces said it was not possible to train these 
units in only 3-4 months to take full control of the pipeline 
security operations. It would take at least six months. The 
funding for initial training, sustaining, and equipping of 
the units will be $35 million for the next three months.  The 
oversight of the training and the protection operations will 
be done from the Joint Forces Headquarters (JHQ) in Baghdad. 
The MOD will host the Infrastructure Coordination Cell with 
liaison elements from MOI, MWR, MNF-I, MOO, MOT, and ME. 
This organization will monitor activities across all 
ministries, identify protection requirements, and conduct the 
planning for infrastructure security operations. 
 
4.  (C) The Commander of the 4th Iraqi Division, a Kurdish 
general from Kirkuk, questioned the Deputy Commander of the 
Armed Forces sharply on why he could not choose the 
commanders of the SIBs, since he was to be the overall 
commander of these units and knew the territory.  He 
suggested the MOD should consult with him when they wanted to 
hire commanders for these units. The Deputy Commander of the 
Armed Forces told him he did not choose the commanders of the 
units, but rather the DPM and MOO chose these commanders. 
The DPM stated he would not discuss this action, while the 
MOO said nothing. The Commander of the 4th Division said he 
needed another battalion on the west side of the Tigris River 
to secure the crossing sites. 
 
5.  (C) The DPM complained that the ITG was paying for 1000 
soldiers per battalion and they were not accomplishing their 
mission of pipeline defense, and the Commanding General of 
the 4th Iraqi Division from Kirkuk complained there were 
usually only 200 men present for duty in these units.  This 
implied corruption in payments for salaries in his mind.  The 
Deputy Commander of the Armed Forces told the DPM that it was 
taking time to fill the units, and not many men were 
volunteering for the positions.  The MOO then complained 
openly to the Deputy Commander of the Armed Forces that the 
current SIBs were totally ineffective and useless.  The DPM 
concurred and said these battalions were in fact the ones 
attacking the pipelines. The DPM stated the tribal leaders 
were the ones who were responsible for the destruction of the 
pipelines.  The government was paying them money for 
protection, and they were extorting additional funds by 
causing additional damage to the pipelines. 
 
6.  (C) The MOO wanted to know when the pipelines would be 
secured so MOO could export oil to the North.  The Deputy 
Commander of the Armed Forces said the plan needed to be 
approved by MNF-I, and said he would seek General Casey's 
approval this week.  The Iraqi NSC Deputy Director, BG Adel 
Aziz, said there would be 17 SIBs of 1000 men each.  At 
present there is no real structure to these units and those 
that exist are currently ineffective.  The DPM then 
interjected that, "we paid money for these battalions, and 
they have destroyed our pipelines. They are stopping our oil 
from reaching Turkey."  The DPM said he would call General 
Casey and ask him to assess the Iraqi forces.  He continued, 
stating, "the infrastructure protection for oil is just as 
important as any other element of Iraqi security." 
 
7.  (C) Following the NEC's formal meeting, the DPM noted to 
emboffs that he was very dissatisfied with the current state 
of infrastructure security.  He did not want to use the 
unreliable SIBs to secure the economic lifeline for Iraq, but 
rather wants to have trained Iraqi Army battalions securing 
the pipelines and other infrastructure. 
The DPM acknowledged there is a political problem in that 
many of the currently trained Iraqi forces are Kurdish, and 
there is sensitivity in the ITG about sending them into 
non-Kurdish areas of the country in the run up to the 
constitutional debate. 
 
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PIPELINE REPAIRS 
---------------- 
 
 
8.  (SBU The Ministry of Finance (MOF) representative said it 
is taking far too long to repair the pipelines.  The MOD was 
stating it took 21-42 days to repair pipeline sabotage 
attacks.  The MOF representative said it should only take 4-5 
days, and there was a huge monetary loss for each day the 
pipelines were not repaired. The MOO added that every time 
MOO repairs the pipelines, they are blown up again within a 
week. 
 
 
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INTELLIGENCE SUPPORT 
-------------------- 
 
9.  (C) The MOI representative requested approval to 
establish an intelligence unit to oversee MOO due to concerns 
that MOO may have been infiltrated by insurgents, Baathists, 
and former intelligence elements from the Saddam era.  The 
principal concern is that every time MOO begins to ship oil 
along a pipeline, it is then attacked. 
 
--------------------------------- 
INSURGENT PLAN TO ISOLATE BAGHDAD 
--------------------------------- 
 
10.  (C) DPM stated that the insurgents were trying to 
isolate Baghdad by attacking infrastructure.  He cited the 
attacks on the Baghdad water supply facilities; oil and 
refinery product pipelines; electricity lines, towers, and 
substations. (NOTE: During the six day period from June 18 to 
June 24 2005, the 18-inch crude pipeline between Basrah and 
Baghdad; the 12-inch Baghdad petroleum product ring pipeline; 
the 10-inch petroleum product pipeline from Baghdad to 
Latifyah; and the 14-inch LPG Bayji to Baghdad pipeline all 
were interdicted by insurgent IED attacks. Moreover, the 26- 
and 30-inch crude oil and 16-inch natural gas pipelines at Al 
Fathah suffered explosions; the cause is uncertain at this 
time.  The disruptions cut off pipeline crude deliveries to 
the Daura (Baghdad) and Bayji refineries, natural gas 
deliveries to the Taji and Daura power plants, crude oil 
deliveries to the Musayyib and Quds power plants, and product 
deliveries between the two largest depots in the Baghdad 
area.  All three of Iraq's refineries - Bayji, Daura 
(Baghdad) and Basrah - are now operating at 50 per cent of 
capacity.  Though days of supply for all products in the 
Baghdad area remain sufficient, Baghdad could see shortages 
in 7-10 days, depending on how quickly the pipelines are 
repaired and refineries return to normal operating levels. In 
this same period, two-thirds of the water supply to Baghdad 
was interdicted by insurgent attacks on the water supply 
network, causing severe water shortages and hardships to the 
populace in Baghdad, while multiple electricity lines and 
towers were interdicted, reducing power availability in 
Baghdad. END NOTE) 
 
 
---------------------- 
INCREASED ELECTRICITY 
----------------------- 
 
11.  (SBU) The Deputy Minister for the ME reported to the NEC 
on the progress of added electrical power availability for 
Iraq.  Current electricity production in terms of MWH, he 
stated, was at the highest level in the history of Iraq. 
Agreements have been made with IRAN, TURKEY, SYRIA and 
on-going negotiations with KUWAIT for additional electrical 
power for Iraq.  On Iran, he said he confirmed an addition to 
the current 100 MW, stating Iran will provide a total of 600 
MW as of next summer at $.05 per KWH, and that Iran had an 
excess of 9000 MW of electricity capacity.  The imports from 
Turkey are currently 175 MW, and this will rise to 900 MW by 
summer 2006 if details can be worked out with the EU.  Syria 
currently provides 70 MW of electricity and this will 
continue.  Kuwait currently provides no electric power to 
Iraq, since it has no regular surplus. However, there are 
on-going negotiations the construction of power plants in 
Kuwait that would dedicate all output to Iraq. These import 
agreements, and the ongoing construction projects will 
provide an estimated 2500-3000 MW of additional power by 
mid-2006 to the Iraqi grid.  (NOTE:  IRMO officials believe 
the mid-2006 estimate to be overly optimistic.  Detailed 
engineering studies and transmission network upgrades need to 
be performed before approximately 1500 MW of additional power 
can be imported into Iraq.  A more realistic estimate is 
early 2007.  END NOTE) 
 
12.  (SBU) The Ministry of Water Resources (MWR) reported 
planned increases from 300 m3 to 500 m3 on flows of water 
from Turkey and a new study to revitalize the Bekhme dam to 
generate hydropower.  He stated that the Bekhme dam was 30 
per cent complete. The dam was first proposed in 1952, and 
Saddam initiated construction in 1988.  Work on the dam was 
halted during the war periods, and much of the structure is 
intact and can be used in the completion of the project.  If 
it is completed, it will be the largest project in Iraq.  The 
DPM requested that the MWR provide a study on the dam project 
and present it to the NEC for future funding consideration. 
MWR said that a Japanese firm was doing a study of the dam 
now to provide current cost and construction estimates.  The 
original costs for this dam were $1.5-billion for initial 
completed construction and a total former cost completion 
total of $7.0-billion in the late 1980's. 
 
13.  (SBU) The ME also asked the DPM for support on the 
rational use of electricity across Iraq, specifically 
complaining about the province of Basrah hoarding 
electricity.  The DPM said it was wrong for the provinces to 
not share electricity, and that ME should move a portion of 
the Basrah electricity across the nation of Iraq.  Allocation 
of electricity should be done according to the Summer 
Electricity Plan.  The ME also reported some of the power 
plants could have produced additional electric power, but 
were unable to get fuel from the MOO.  The MOO responded that 
the saboteurs had destroyed the pipelines, which prevented 
the delivery of the fuel to the ME. 
 
--------------------- 
OIL PRODUCTION STATUS 
--------------------- 
 
14.  (SBU) MOO reported the decline of oil exports 
continuing, with exports having dropped from 1.8-million bpd 
in 2004 to 1.45-million bpd currently.  He said MOO expected 
additional declines unless security of the pipelines 
improved.  MOO said that over 90 per cent of all problems 
with exports were related to attacks on infrastructure.  The 
DPM instructed the MOO to come up with a plan for increased 
production of oil for export.  MOO responded he was working 
on it, and immediately added he would no longer provide crude 
oil, now selling for $ 60 per barrel, for additional power 
generation -- the ME would need to burn natural gas or Heavy 
Fuel Oil (HFO) in place of crude oil in power plants.  MOO 
said he would come up with a plan to provide additional 
natural gas to the ME.  The DPM said the gas turbines for 
electrical generation should use natural gas, and that these 
power plants were being destroyed by the use of other fuels 
instead of natural gas.  The DPM said he wanted the natural 
gas and hydropower electrical plants to generate the base 
power generation capacity in Iraq, and use the diesel thermal 
plants only to meet peak load demands. 
 
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AGENDA FOR NEXT MEETING OF NATIONAL ENERGY COMMITTEE 
--------------------------------------------- ------- 
 
15.  (C) The DPM said the next meeting of the NEC would 
review the status of infrastructure protection plan on the 
following Monday. 
 
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COMMENT 
------- 
 
16.  (C) COMMENT:  The NEC remains dissatisfied with MOD's 
infrastructure security plan and frustrated that the ITG 
cannot use the Iraqi Army to defend key infrastructure.  The 
DPM's comments on the insurgents' plan to isolate Baghdad and 
cut the capital off from the rest of the country, and his 
examples of how well it was working, appeared to be of great 
concern to the Iraqi Ministries present.  The news relayed at 
the meeting was somber:  oil production is going down and is 
expected to continue dropping in the South, while the 
pipelines in the North are under constant interdiction and 
very little oil can be exported through Turkey.  To add to 
the gloom, the representative from MIM said his minister 
could not attend, because the minister's cousin had just been 
assassinated, and he was at the funeral. END COMMENT. 
Satterfield