IRAQ INFRASTRUCTURE SECURITY: MOD PLAN UPDATE TO

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
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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
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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
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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.

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INSURGENT PLAN TO ISOLATE BAGHDAD
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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)


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INCREASED ELECTRICITY
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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.

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OIL PRODUCTION STATUS
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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
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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
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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