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David Ignatius

Peace in the Pipeline?

By David Ignatius
Wednesday, April 6, 2005; Page A19

When a new Iraqi government finally takes office, it will have in its "in-box" an economic proposal that touches on some of the country's most sensitive questions: How to reduce violence in the Sunni Triangle, how to manage the country's increasingly tense relationship with neighboring Jordan, and how to expand its oil production and exports.

This hornet's nest of problems could be eased, proponents argue, by building an oil pipeline through western Iraq to the Jordanian port of Aqaba on the Red Sea. This pipeline would carry 1.2 million barrels of crude a day from the existing pipeline junction at Haditha, northwest of Baghdad, to new loading facilities at Aqaba. Building a pipeline through Iraq's nastiest war zone may sound crazy, but read on.

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A leading advocate of the pipeline project is an Iraqi Sunni leader named Talal Gaaod. He heads an engineering company based in Jordan called the Tabouk Group, and he's also a prominent member of the Dulaimi tribe. The tribe holds sway in Anbar province, which stretches from Baghdad to the Jordanian border. His tribal credentials are important, because it's through tribal-backed security forces that Gaaod thinks he can safely build and maintain a pipeline in what has been the heartland of the insurgency.

Gaaod has outlined the project to U.S., Iraqi and Jordanian officials. He argues that it could provide employment in the Anbar region, draw the Sunni tribal and religious leadership into closer cooperation with the new Shiite-dominated government in Baghdad and thereby help stabilize Iraq. He summarized his plans for me last weekend in his first public, on-the-record discussion of the project.

The pipeline idea already has some momentum: The Jordanian government sent a formal proposal in January to Iraq's interim prime minister, Ayad Allawi. The Jordanians are awaiting a response from the government that was elected Jan. 30.

Industry sources say foreign investment for the project could come from the Japanese trading company Mitsui, which has made a construction proposal to the Jordanian government and has held discussions about financing with the Japan Bank for International Cooperation, Japan's import-export agency. The price tag would be about $2 billion. On the Iraqi end, the partner would presumably be the Oil Ministry.

The rationale for the project is that once Iraq becomes stable enough to expand its oil production toward a target of 5 million to 6 million barrels per day, it will need more pipeline capacity. The existing pipelines travel through Shiite-dominated southern Iraq to the Persian Gulf and through the Kurdish north to Turkey. A western pipeline to the Red Sea would give Sunni areas more of a stake in Iraq's oil exports and also provide the security of an alternative route. The Jordanians would get economic development from the port, and the Japanese would get reliable long-term supplies of crude.

Beyond simply transporting oil through Anbar province, Gaaod's group believes that new reserves can be found there. Past studies by the Iraqi Oil Ministry are said to have indicated potential reservoirs near Fallujah, of all places, and in Iraq's western desert. Surveying and drilling in Anbar would be impossible until the area was more secure, but the prospect of new jobs and oil wealth might in itself help contain the insurgency.

Iraq mavens will recall an earlier version of the Aqaba pipeline plan that surfaced in the 1980s. Back then the big risk was thought to be Israeli sabotage, and there were elaborate efforts to arrange secret contacts among Saddam Hussein's government, the Reagan administration and Israel. That earlier scheme collapsed amid allegations of scandal, despite industry support for the concept.

The new pipeline scheme certainly has its problems, beyond the obvious danger that insurgents would try to blow it up. Skeptics argue that the pipeline would amount to a wager that Iraqi tribal leaders are strong enough, and enlightened enough, to act as the guarantors of the country's future stability. Perhaps the touchiest issue for the new Iraqi government would be the Jordanian connection itself. Tensions between the two countries have flared as Iraq's Shiite majority surged to political power in January and Jordan fretted that the new government might tilt toward its co-religionists in Iran. There's also the poisonous feud between Iraqi Shiite leader Ahmed Chalabi and a Jordanian government that accused him of looting a bank during the 1980s.

A pipeline deal might be a deus ex machina for easing these problems. As Iraq's new prime minister thinks about how to pull the country back together, he should consider the idea. Pipeline politics can be a useful way to address deeper disputes.


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