CSIS CENTER FOR STRATEGIC on the worlds regions and the unique challenges inherent to them; and on the issues that know no boundary in an increasingly connected world. Former U.S. senator Sam Nunn became chairman of the CSIS Board of Trustees in 1999, and John J. Hamre has led CSIS as its president and chief executive officer since 2000. CSIS does not take specific policy positions; accordingly, all views expressed in this publication should be understood to be solely those of the author. Cover photo credit: U.S. Energy Information Administration, Energy Situation Analysis Report, April 9, 2003, http:/www.eia.doe.gov/emeu/security/esar/archive/040903.pdf. 2010 by the Center for Strategic and International Studies. All rights reserved. Library of Congress Cataloguing-in-Publication Data Ebel, Robert E. Geopolitics and energy in Iraq : where politics rules / Robert E. Ebel. p. cm. Includes bibliographical references. ISBN 978-0-89206-603-2 (pbk. : alk. paper) 1. Iraq-Politics and government-2003- 2. Elections-Iraq. 3. Petroleum industry and trade- Political aspects-Iraq. 4. Power resources-Iraq. 5. Energy policy-Iraq. 6. Geopolitics-Iraq. I. Title. JQ1849.A58E34 2010 324.95670443-dc22 2010028057 Center for Strategic and International Studies 1800 K Street, N.W., Washington, D.C. 20006 Tel: (202) 775-3119 Fax: (202) 775-3199 Web: www.csis.org | iii List of Figures iv List of Tables v About the Geopolitics of Energy Series vii 1. Introduction 1 2. March 7, 2010, National Election 4 The Vote 4 A Manual Recount of the Baghdad Vote 7 Forming a Winning Coalition 9 3. How to Raise Oil Production Levels 11 4. Inadequate Iraqi Spending 16 5. Crude Oil Production and Export Earnings 18 Iraq before 2003 18 Iraq after 2003 20 6. Oil Exports: A Closer Look 35 7. Oil Services Contracts and Oil Company Negotiations 37 8. Aboveground Risks 41 9. Pipelines 44 10. Electricity 47 1 1. Epilogue 51 About the Author 55 contents iv | iv | geopolitics and energy in iraq List of Figures Figure 1.1 Energy Consumption in Iraq, by Type of Fuel, 2006 (percentage) 2 Figure 3.1 Comparison of Department of State and Department of Energy Data Relating to Iraqi Crude Oil Production, June 2003February 2007 12 Figure 5.1 Iraqi Crude Oil Production Levels, 19702005 (million barrels per day) 19 Figure 5.2 Iraqi Crude Oil Production, AugustSeptember 2004 (million barrels per day) 22 Figure 5.3 Iraqi Crude Oil Exports and Revenues, June 2003August 2004 23 Figure 5.4 Iraqi Crude Oil Production, late October 2005mid-December 2005 (million barrels per day) 23 Figure 5.5 Iraqi Crude Oil Exports and Financial Earnings, JanuaryDecember 2005 24 Figure 5.6 Iraqi Oil Exports and Export Earnings, 2006 24 Figure 5.7 Iraqi Crude Oil Production, Fourth Quarter 2006 (million barrels per day) 25 Figure 5.8 Iraqi Crude Oil Production, Fourth Quarter 2007 (million barrels per day) 26 Figure 5.9 Iraqi Crude Oil Exports and Oil Export Earnings, December 2006November 2007 27 Figure 5.10 Iraqi Crude Oil Production and Exports, August 2008June 2009 (million barrels per day) 28 Figure 5.11 Iraqi Gasoline Imports as a Share of Total Supply, 20062009 (million liters per day) 28 Figure 5.12 Iraqi Budget, Oil Receipts, and Gross Domestic Product, 2008 and 2009 (billions of dollars) 30 Figure 5.13 Iraqi Monthly Crude Oil Production and Exports, June 2003December 2009 31 Figure 5.14 Relation among Price of Oil, Oil Receipts, and Gross Domestic Product in Iraq 32 Figure 5.15 Iraqi Crude Oil Production and Exports, August 2009May 2010 (million barrels per day) 34 Figure 6.1 Iraqi Crude Oil Exports, by General Destination, 2008 (as a percentage of total) 35 Figure 9.1 Iraqi Oil and Gas Fields, Gas Pipelines, and Existing and Planned Combustion Turbine Power Plants 45 Figure 10.1 Sources of Electricity Supply on the National Grid, by Month, January 2009 March 2010 (megawatt-hours per day) 48 Figure 10.2 Electricity Demand and Supply in Iraq, July 1, 2004January 1, 2009 (megawatt-hours) 50 Figure 10.3 Electricity Supply and Demand in Iraq, August 2003February 2010 (megawatt-hours) 50 contents | v List of Tables Table 2.1 Results of March 7, 2010, National Election in Iraq 5 Table 5.1 Iraqi Oil Refining Capacity, 20042008 29 Table 5.2 Iraqi Refinery Yields, by Type of Product, 2008 29 Table 6.1 Iraqi Exports of Crude Oil, by Country of Destination, 2008 (thousand barrels per day) 36 Table 7.1 Iraq: Summary of Two Oil Field Bidding Rounds 39 Table 9.1 Export Pipelines Serving the Iraqi Oil and Gas Sectors 46 | vii In November of 2000, CSIS published The Geopolitics of Energy into the 21st Century. The report was the culmination of a two-year effort conducted under the auspices of the Strategic Energy Initiative (SEI), designed to identify and examine significant geopolitical shifts that could impact future global energy security, supply, and demand. The effort, which was cochaired by Senator Sam Nunn and Dr. James Schlesinger, was undertaken on the prem