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Hey, what is really going on? Last week, "Iraq Reports Record Oil Exports". Now: Fueling Anger in Iraq Sabotage Exacerbates Petroleum Shortages By Rajiv Chandrasekaran Washington Post Foreign Service Tuesday, December 9, 2003; Page A01 BAGHDAD, Dec. 8 -- The line of cars waiting to fill up at the Hurreya gas station on Monday snaked down the right lane of a busy thoroughfare, around a traffic circle, across a double-decker bridge spanning the Tigris River and along a potholed side street leading to one of Iraq's three oil refineries. At the end, almost two miles from the station, was Mohammed Adnan, a taxi driver who could not comprehend why he would have to wait seven hours to fuel his mud-spattered Chevrolet Beretta. "This is Iraq," he noted wryly. "Don't we live on a lake of oil?" Despite its vast underground oil reserves -- estimated to be the world's second-largest -- Iraq is a country starved of petroleum products. Not only is gasoline in short supply, but so too are diesel, kerosene and propane. Over the past few weeks, lines for gasoline and other petroleum products have grown to lengths unimaginable even by the standards of the U.S. energy crisis in the 1970s. Some are miles long, forcing drivers to wait all day for a turn at the pump. Many Iraqis have taken to spending the night in their cars. Others have resorted to buying gas on the black market for 20 times the pump price. The difficulty in obtaining a commodity that Iraqis had long taken for granted has fueled a new wave of anger and frustration with the U.S. occupation, particularly among moderate, middle-class city dwellers who find themselves unable to drive to work, drop their children off at school or go shopping in this car-dependent city. The popular discontent appears to match the fury that enveloped Baghdad when electricity service dropped to just a few hours a day over the summer. U.S. officials here contend the gas shortage has numerous causes; they cite the import of 250,000 new cars since the end of the war and slumps in production during Ramadan, the Islamic holy month of fasting. Compounding the problem, they said, are Iraq's antiquated refineries, which have not been able to resume prewar output levels because supplies of two crucial inputs -- crude oil and electricity -- are regularly disrupted. "There's no one thing that's to blame," said an official with the U.S.-led occupation authority who is responsible for oil issues. "It's a combination of a lot of little things." But officials with Iraq's Oil Ministry offered a different view. The new cars have not increased overall demand for gasoline, largely because fewer people are working and traveling these days. The problem, they maintain, is security. Repeated sabotage of pipelines has disrupted the flow of crude oil into refineries and the removal of byproducts. Truckers bringing in fuel to alleviate the shortage from neighboring countries have been attacked on the highways, leading a contingent of Turkish drivers to go on strike last week. And the lack of adequate law enforcement has allowed black marketeers to exacerbate the situation by hoarding fuel. "If we had security, we would have fuel," said Dathar Khashab, the director of the Daura refinery in southern Baghdad. For Iraqis, the impact of the anti-American insurgency has perhaps been felt most broadly in the gasoline shortage. Although more than 100 Iraqis have been killed in car bombings and more than a score assassinated by insurgents for cooperating with occupation forces, the pipeline explosions and the attacks on truckers have disrupted the lives of Iraqis like nothing else. "Life is worse now than it was during the war," said Mazen Bayar, a retired foreman who works part time as a taxi driver. "I spend all day in the line. There's no time to work." Standing atop a bridge where his car was stuck in line, Bayar looked out at the Daura refinery as an orange flame shot out of a smokestack. "We have always had enough oil," he said. "Now we have a shortage? Something suspicious is going on." But Bayar and a score of other drivers in line on Monday afternoon did not make a connection between the shortages and the insurgency, blamed largely on loyalists of the former president, Saddam Hussein. Instead, they cast the blame at everyone -- and anyone -- else. "Maybe it's the black marketeers," Adnan said. "They're taking all our fuel." Bayar was more certain. "It's the refineries," he said. "They're not producing enough gasoline." The driver of the next car in line scoffed at both explanations. "It's the Americans, for sure," said Hassan Jawad Mehdi. "They are taking our oil back to America." Other drivers were convinced plenty of gasoline remained in distribution centers guarded by U.S. troops. "The Americans are keeping it from us until the security improves," one driver said. "If they wanted to give it to us, they could." When American oil experts descended on Iraq after Hussein's government was toppled in April, they never foresaw the task of getting gasoline to Iraqis to be so complicated. The country's three refineries -- one in the northern town of Baiji, one in the southern port city of Basra and one in Baghdad -- produced enough gasoline, diesel, kerosene and propane to meet the national demand. Even under U.N. economic sanctions, Hussein's government kept the refineries running. Gasoline was sold then -- as now -- for a steal: about 5 cents a gallon. Although the Basra refinery and oil-pumping infrastructure in the south were extensively looted after the war, teams from the U.S. Army Corps of Engineers and contractor Kellogg Brown & Root Inc., a subsidiary of Halliburton Co., performed emergency repairs. By midsummer, more than 1 million barrels of crude oil were being pumped each day from the northern and southern fields. The three refineries were ramping up production and it appeared they would soon return to prewar production levels. Then the insurgents found a new target: the web of pipelines that extend through a swath of the country long known for its loyalty to Hussein. Guerrillas began blowing up the lines that connect the Baiji and Daura refineries with the northern fields. At the Daura refinery, a chart in Khashab's office that plots crude oil inputs has the peaks and valleys of an electrocardiogram. On some days, the plant, with a 110,000 barrel-per-day capacity, has processed less than 10,000 barrels. "This is no way to run a refinery," he said. Iraq's daily domestic demand for gasoline is about 4 million gallons, but its refineries are producing only about 2 million, Oil Ministry officials said. To make up for the shortfall, the occupation authority and the Oil Ministry signed contracts to import oil from neighboring countries. "It was like bringing coals to Newcastle," one official with the occupation authority said. "But we had no choice." Between 2 million and 3 million gallons of oil products are imported into Iraq every day, the American official involved in oil issues said. Much of it has been brought in by Halliburton, the Houston-based company once run by Vice President Cheney, which has been paid as much as $2.65 per gallon by the U.S. government, a deal that has prompted criticism among some members of Congress but has been defended by the occupation authority as fair because of security-related expenses. Even so, escalating attacks on tanker trucks have disrupted that effort. Fuel imports from Turkey halted last week after drivers went on strike, largely over fears they would be attacked, Turkish trucking company owners said. The Turkish drivers also have refused to drive beyond the northern city of Mosul, forcing the Oil Ministry and the occupation authority to arrange another convoy of trucks to haul the fuel south to Baghdad. The drivers' refusal to travel south of Mosul has forced the Baiji refinery to scale back production because the trucks are needed to remove the heavy fuel oil that is a byproduct of the refining process. The refinery is operating at only about 50 percent of its 280,000-barrel-per-day capacity because storage tanks at the plant are filled with more than 30 million gallons of fuel oil, said the director, Riyad Ghassab. Fuel oil used to be removed from Baiji by a pipeline, but that line is now being used to transport crude to the refinery because the normal crude line was severed by saboteurs, U.S. and Iraqi officials said. "We have the oil," Ghassab said, "but we cannot move it around in our pipelines and on our roads." U.S. officials said military units have started to provide additional security for truck convoys. The Oil Ministry also is deploying several thousand new security officers to guard pipelines. And in Baghdad, U.S. soldiers and Iraqi police officers are taking a tougher posture with black-market vendors and the gas station owners who sell to them, arresting them en masse and threatening some with 10-year jail sentences. Such actions are not without risk. In Mosul, insurgents shot and killed a U.S. soldier guarding a gas station on Monday. Amer Hassan, the manager of the Hurreya station here, said American soldiers need to be even more aggressive. "They should show the black-market sellers no mercy," he said. "They are thieves." As he surveyed his station and puffed on a cigarette -- smoking is not prohibited at Iraqi gas stations -- Hassan expressed amazement at rows of eager drivers waiting to fill up their cars. "Of all things," he said, "we never thought we'd be without gasoline in Iraq." http://tinyurl.com/xxn1 --------------------------------------------------------- ----- Original Message ----- From: "ppg" <email@example.com> To: <firstname.lastname@example.org> Sent: Friday, December 05, 2003 5:06 PM Subject: Iraq Reports Record Oil Exports > What on earth? Where did this come from suddenly? pg > > http://tinyurl.com/xxn1 > > Iraq Reports Record Oil Exports > Last Updated: 12/5/2003 8:41:13 AM > > > Despite setbacks in rebuilding its shattered oil industry, Iraq boosted oil > production to 2.1 million barrels a day last month and exported record > volumes of crude from its terminal in the Gulf, Iraq's delegation to OPEC > said Thursday. > > Iraq's output and exports have both grown at rates "exceeding earlier > expectations," the Iraqi Oil Ministry said in a communique issued after a > meeting of the Organization of Petroleum Exporting Countries at OPEC's > Vienna headquarters. > > OPEC member Iraq hopes to maintain this momentum and increase its daily > production to an average of 2.3 million barrels in December and 2.8 million > barrels by next April. By comparison, Iraq pumped about 2.5 million barrels > a day on the eve of the U.S.-led invasion that toppled Saddam Hussein. > > Iraq shipped 1.5 million barrels a day from its Basrah Terminal last month, > more than at any time since the terminal opened in the late 1980s, the > communique said. Although Iraq exported some 2.1 million barrels a day > before the war, that amount included crude from the country's northern oil > fields, which are currently shut off from a strategic export pipeline to > Turkey due to repeated sabotage. > > Iraq aims to increase its exports to 1.7 million barrels a day by the end of > this year and 2 million barrels a day by April. The Basrah Terminal - known > formerly as Mina el-Bakr - was captured early in the war in good condition. > However, it has a maximum export capacity of about 1.5 million barrels a > day, and it was not immediately clear how the Iraqis expected to ship any > additional crude beyond that. > > One option under consideration is an oil swap with neighboring Iran, in > which Iraq would transfer some of its crude overland to Iran, which would > then export the oil from an Iranian port. In exchange, Iraq would receive > refined Iranian oil products of comparable value. Such an arrangement might > require construction of a small, 6-mile pipeline from southern Iraq to Iran, > said George Beranek, an analyst with PFC Energy, a Washington consultancy. > > Another option would be for Iraq to rebuild and expand its second Gulf > terminal, Khor al-Amaya, which was destroyed during the Gulf War of 1991 and > has only been partially repaired. Mohammed Al-Waely, operations manager of > Iraq's state-run South Oil Co., has described the facility as "a jungle of > pipes and burnt buildings in miserable condition." Although Khor al-Amaya > hasn't been used since Saddam's ouster, the ocean is often calmer there than > at the Basrah Terminal, making it easier for tankers to load oil. > > In a pinch, Iraq could also export oil by truck to neighboring countries, > Beranek said. > > Iraq's Oil Ministry said it has forged good relations with Saudi Arabia, > Qatar, Kuwait and Iran and hopes to interest them in the joint development, > investment and training it needs to further develop its oil resources. In > addition, it has made a priority of developing its oil fields and is > discussing "common acceptable grounds" with international oil companies, the > communique said. > > The ministry said it plans to hold an oil conference in Baghdad in February > to help stimulate the interest of international firms. > > Iraq's Oil Ministry recently called off a similar conference planned for > December due to concerns about the security of potential visitors. However, > the communique claimed that the security situation in Iraq has improved > "significantly" since then. > > Copyright 2003 Associated Press. All rights reserved. This material may not > be published, broadcast, rewritten, or redistributed. > > WUSA 9 News > _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. 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