From The New York Times, September 3, 2005
Thanks to Guards, Iraq Oil Pipeline Is Up and Running, On and Off
By James Glanz

BAGHDAD, Iraq, Sept. 2 - Saboteurs shut down Iraqi crude oil exports to Turkey for virtually all of the past year, but the oil is flowing again after Iraq's government put in place elaborate new security measures and decided to move its product in what is essentially a clandestine operation.

In the new export system, described over the last two weeks by officials in two state-owned oil companies, the Iraqi armed forces and a deputy prime minister, officials secretly open Iraq's northern pipeline to send batches of oil to Turkey and then shut it down again before insurgents can attack.

The government has recruited, trained and equipped thousands of local tribesmen and stationed them at hundreds of new guard posts along the pipeline. But disputes have already broken out within the government over who will pay the hundreds of millions of dollars it will take to continue that arrangement and expand it to cover all vulnerable points.

World oil prices, now just under $70 a barrel, have recently displayed strong sensitivity to fluctuating supplies, and Iraq's northern oil fields, centered on the city of Kirkuk, can produce close to a million barrels a day, according to estimates by the state-owned North Oil Company and the United States Energy Department.

Oil from the northern fields also feeds crucial refineries and power plants in Iraq. The new system for moving that oil around relies on gradually filling up storage tanks in secure areas near Kirkuk and then, at unannounced times, sending the oil in the tanks as quickly as possible through the pipelines.

Still, as a result of the sporadic operation, a total of only five million barrels of oil flowed from the northern oil fields in August to the Turkish export terminals at the Mediterranean port of Ceyhan, said Mussab al-Dujayli, director general of Iraq's State Oil Marketing Organization. This year Iraq has exported an average of about 1.4 million barrels a day, mostly from its southern fields.

Drawing on an Arabic proverb, Defense Minister Sadoun al-Dulaimi said the significance of the first trickle of oil from the north should not be dismissed. "One eye better than none, my friend," Mr. Dulaimi said in English.

Even in the south, power failures and other technical problems have limited exports, with serious implications for Iraq's budget, which depends almost entirely on oil.

Just before the invasion by the United States and its allies in 2003, Iraqi oil exports peaked at more than two million barrels a day, and the country's bottomless financial needs have placed enormous pressure on the rich northern fields to pick up the shortfall.

The north has failed to put a dent in the country's needs or to significantly affect the world market, even with the latest advances, said Anne Korin, director of policy and strategic planning at Institute for the Analysis of Global Security in Washington, which closely follows the Iraqi oil industry.

"It's kind of like the Red Queen" in "Through the Looking Glass," Ms. Korin said, "running like crazy just to stay in place. Even when you're managing to get some flow out every once in a while, that's just not going to add up to enough."

The new security measures were evident during a trip along a critical stretch of pipeline between Kirkuk and Baiji last week in an armed convoy accompanying Ahmad Chalabi, the deputy prime minister whose portfolio includes energy infrastructure. From Baiji, 80 miles southwest of Kirkuk, the export pipeline pivots north toward Turkey.

Every mile or two a handful of newly minted Iraqi soldiers wearing camouflage uniforms were standing at attention next to ragged tents and huts as Mr. Chalabi's convoy of about 30 white sport utility vehicles passed. Some four battalions, or more than 3,000 troops, were recently hired in this part of the country from local tribes and given basic military training as part of the new pipeline security program.

"For the time being we have tents and whatever," said Lt. Gen. Nasier Abadi of the Iraqi Army, who supervises parts of the project. "But we are building them camps."

General Abadi said the recruits, paid about $350 a month, were mostly drawn from Sunni Arab and Turkmen tribes. Both ethnic groups have been accused of close ties with insurgent groups in this area of Iraq, but the general said there had been no trouble drumming up interest in the security force since this part of the program began on July 15.

"Lots of people would like a job that pays $350 a month," he said.

In another little-known element of the initiative, the fledgling Iraqi Air Force is flying three surveillance planes over the pipelines to scan for insurgent activity, said Raoul Alcala, an American who advises the defense minister on national security and works from the United States Embassy in Baghdad.

The planes, which originally came as a gift from the United Arab Emirates, have infrared and visible-light cameras in their noses, and "they can fly low and slow enough to actually see things," Mr. Alcala said.

"It's not just a blur."

But such initiatives do not come cheap, he said. The tab just for three months of organizing, training and equipping the first four battalions will come to $35 million, he said. If the initial phase is successful, he said, it will be expanded so that 15,000 new troops will guard pipelines across northern Iraq, all the way south to Baghdad and north to the Turkish border.

That would be in addition to 30,000 men who are already guarding specific installations like power plants and oil wells, though not very effectively. Mr. Dulaimi, the defense minister, estimated that just the program to add the new troops would cost $375 million, and he added that it was unclear whether the Defense Ministry or the Oil Ministry would pay for it all.

So far, Mr. Dulaimi said, "We asked the Oil Ministry to support our budget, and the Oil Ministry just paid four battalions."

The oil minister was not on this trip and was unavailable for comment, but Muhsin Shlash, the electricity minister, did come along. During a long stop for gas, Mr. Shlash said that because the oil and electricity infrastructures were so intertwined, and because high-tension lines often ran parallel to pipelines, a joint protection plan was being explored.

He pointed out that during the previous weekend, for example, coordinated sabotage attacks on power lines around Baghdad had produced a nationwide blackout that had temporarily stopped all oil exports, including those in the south. In addition to all of the other thousands of security troops looking after Iraq's infrastructure, the Electricity Ministry employs 10,000 guards, Mr. Shlash said. "But how effective they are, I'm not convinced," he added.

Clearly relishing the trip through what often amounted to rebel-held territory, Mr. Chalabi repeatedly said that because the oil generated so much revenue, financing for the new troops and surveillance efforts would be forthcoming.

Mr. Chalabi particularly seemed to enjoy a Boris Yeltsin-like moment when he clambered up next to a big tripod-mounted machine gun on the bed of a white Chevy Silverado pickup to survey a grassy area near a stretch of pipeline that had been the target of a mortar attack on Aug. 9. The shells fell harmlessly and the insurgents retreated, the local officers in charge said.

"Attacks have been reduced dramatically since you took over," Mr. Chalabi said, standing in the back of the Silverado. "We congratulate you."

But perhaps the most telling moment came at another stop, where he was surrounded by a crowd of soldiers who said they had not been paid their salaries in three months. "Send me your names," Mr. Chalabi said, promising that they would be paid.

* Copyright 2005 The New York Times Company