May 21, 2010Preventing an (Arabian) Gulf Oil Spill
Modernizing Iraqi export pipelines is not just a matter of economic growth, but of avoiding disaster.
The final impact of current events in the Gulf of Mexico is still undetermined, but the effects will certainly reverberate through the oil industry for a considerable time. In response, the authorities in Iraq, in particular, may now want to redouble their efforts to modernize their decrepit export pipelines.
The infrastructure through which about 80% of Iraqi oil exports flow has suffered from years of neglect, and is operating at maximum capacity, limiting any ability to increase exports as production recovers. Iraq owns two terminals in the Arabian Gulf, which are connected to the southern oil fields by massive undersea pipelines. The physical state of these lines is poor. They are well past their designed life expectancy, and were neither inspected nor repaired during much of the Saddam era. Experts fear that inspecting them now with modern technology might damage them beyond repair. Consequently they are being operated at reduced pressure, while plans for replacement have remained under consideration since 2003. In the meantime, the risk of a major oil spill from a fractured pipe remains real and largely unmitigated. This would damage not just the marine life and the Iraqi economy, but potentially the supply of water to the Gulf states, many of which rely on desalination plants that could be shut down by an oil spill.
Two projects—one paid for and managed by Iraq and another under Iraqi management but funded by the Japanese—aim to lay new pipes in the Gulf. Under these plans, the current terminals will be fed by new pipelines and supplemented by single point moorings. These types of loading buoys are more flexible, safer, and easier to operate than fixed terminals, and are the industry standard for loading crude-oil supertankers in the rest of the Arabian Gulf and throughout the world. These two projects will both remove the risk of a catastrophic failure, and will allow Iraq to increase its exports substantially, which is vital if the Iraqi economy is to stabilize and grow.
But even though Oil Minister Hussain Al-Shahristani declared these projects his highest priority back in 2008, progress has been painfully slow. The reasons for this are complex.
Saddam Hussein's regime did not encourage, or even tolerate, independent thinking or decision-making. Many of the best managers who were not imprisoned or killed escaped the country. Those who stayed are now struggling to adapt to the responsibilities placed on them to repair the damage done by years of neglect, and are doing so with little training and amid a struggling economy led by an inexperienced political leadership.
Iraqi officials' greatest fear is to be accused of corruption. And so the process of assessing bids and issuing contracts, especially with Western companies, is fraught with holdups. Where the option exists to either delay making a decision or, better still, to get someone else to make it, Iraqi officials will usually take it.
So what can be done? First, Western leaders must stress to Iraqi authorities the importance of accelerating the pipeline replacement projects. Second, given the projects' strategic importance—an oil spill would not only risk pollution, but interrupt the country's principal source of income—Iraq's government must fast-track the decision-making process. Officials should be be given the authority to bypass the many bureaucratic procurement policies that slow down the projects. International authorities could help by underwriting procurement decisions. In parallel, robust risk-assessment and disaster-reaction plans need to be established and agreed with the other governments in the region, preferably including Iran.
Whatever the final outcome of the Gulf of Mexico disaster and the inquiries that will follow, no one will be able to say that a similar disaster was neither predictable nor predicted in the northern Arabian Gulf.
Given recent history, the responsibility for avoiding it is not Iraq's alone.
(Mr. McNinch is a former British Army engineer, and served as principle energy advisor to Coalition military commanders Gens. David Petraeus and Raymond Odierno in Iraq in 2008 and 2009. He remains engaged in helping Iraq to develop its energy infrastructure)
(Mr. McNinch is a former British Army engineer, and served as principle energy advisor to Coalition military commanders Gens. David Petraeus and Raymond Odierno in Iraq in 2008 and 2009. He remains engaged in helping Iraq to develop its energy infrastructure)
