OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

September 27, 2006 

MEMORANDUM FOR U.S. AMBASSADOR TO IRAQ 

DIRECTOR, IRAQ RECONSTRUCTION MANAGEMENT 

OFFICE 

COMMANDING GENERAL, MULTI-NATIONAL FORCEIRAQ 

COMMANDING GENERAL, JOINT CONTRACTING 

COMMAND-IRAQ/AFGHANISTAN 

SUBJECT: Unclassified Summary of SIGIR’s Review of Efforts to Increase Iraq’s 

Capability to Protect Its Energy Infrastructure (SIGIR-06-038) 

We are providing this unclassified summary of a classified audit report we issued on July 27, 

2006, on efforts to increase Iraq’s capability to protect its energy infrastructure (SIGIR-06-

014), for your information and use. We performed the audit pursuant to a commitment by the 

Special Inspector General for Iraq Reconstruction at a February 8, 2006, United States Senate 

Committee on Foreign Relations hearing to report on the capacity of the Iraqi government to 

protect its infrastructure. 

We considered formal comments from the U.S. Embassy, Baghdad and Multi-National 

Force-Iraq on a draft of the classified report when preparing the final report. Their comments 

were addressed in the report where applicable. We also received technical comments from 

other organizations involved in Iraq’s infrastructure security. All comments received were 

considered in preparing the final classified report. Because the underlying report was 

classified, we obtained an official classification review of this summary from the 

Commanding General, Multi-National Force-Iraq. The result of this review was a 

determination that this summary is unclassified. 

We appreciate the courtesies extended to the staff. For additional information on this 

summary report or our classified report, please contact Steven Sternlieb (703-428-0240 / 

steven.sternlieb@sigir.mil; or via SIPRNET at steven.sternlieb@HQDA-S.army.smil.mil); or 

Joseph T. (Mickey) McDermott (914-822-4618 / joseph.mcdermott@iraq.centcom.mil; or via 

SIPRNET at joseph.mcdermott@S-Iraq.centcom.smil.mil). 

Stuart W. Bowen, Jr. 

Inspector General 

cc: See Distribution 

400 Army Navy Drive • Arlington, Virginia 22202
Table of Contents 

Unclassified Summary 1

Appendix A – Acronyms 6 

Appendix B – Report Distribution 7 

Appendix C – Audit Team Members 9 
Unclassified Summary of SIGIR’s Review of Efforts to 

Increase Iraq’s Capability to Protect Its Energy 

Infrastructure 

SIGIR-06-038 September 27, 2006

Unclassified Summary 

Introduction 

Iraq cannot prosper without the uninterrupted export of oil and the reliable delivery of 

electricity. The United States (U.S.) has invested about $320.3 million over the past 

several years to improve Iraq’s capability to protect its oil and electricity infrastructure. 

However, a number of factors, including insurgent attacks, an aging and poorly 

maintained infrastructure, criminal activity, and lack of rapid repair capability have 

combined to hold down Iraq’s oil exports and the availability of electricity. To achieve 

overall victory in Iraq, the current Administration’s strategy includes the protection of 

key infrastructure nodes and increasing the Iraqi government’s capability to protect its 

key energy infrastructure. This review addresses the efforts by the U.S. to increase the 

Iraqi government capability to protect its energy infrastructure. It was undertaken 

pursuant to a commitment by the Special Inspector General for Iraq Reconstruction at a 

February 8, 2006, United States Senate Committee on Foreign Relations hearing to report 

on the capacity of the Iraqi government to protect its infrastructure. 

Because of the importance of infrastructure integrity to Iraq’s future and the challenges 

being confronted in securing it, this is one in a series of reports addressing Iraq’s 

capability to maintain its oil and electrical infrastructure integrity. In future reviews we 

plan to address Iraq’s capacity to (i) invest in improving the frail existing infrastructure, 

(ii) sustain effective and efficient operation and maintenance of the infrastructure, and 

(iii) prevent, detect, and prosecute those responsible for smuggling and corruption in the 

electricity and oil sectors.

Objectives 

This report provides the unclassified summary of a classified audit report we issued on 

July 27, 20061, that addresses U.S. efforts to increase the capacity of the Iraqi 

government to protect its critical oil and electricity infrastructure. Specifically, this 

report addresses: 

• Factors affecting Iraq’s infrastructure, including attacks, physical condition, and 

criminal activity. This is an expansion of our original objective of focusing on 

attacks in recognition of the importance of factors other than attacks. This 

objective’s purpose is to identify the scope of requirements/needs. 

 

1

 Special Inspector General for Iraq Reconstruction, Review of Efforts to Increase Iraq’s Capability to 

Protect Its Energy Infrastructure, SIGIR-06-014, July 27, 2006. 

1 
• The extent to which the Iraqi government can perform independently to protect its 

oil and electricity infrastructure. This is to identify a baseline metric. 

• The support the United States is providing the Iraqi government to increase its 

capability to protect its oil and electricity infrastructure. This is to identify the 

current and future investment of resources needed to attain the desired capability. 

Results 

A number of factors, including attacks, aging and poorly maintained infrastructure, and 

criminal activity are adversely affecting Iraq’s ability to develop a viable energy sector. 

These factors have combined to hold down Iraq’s oil exports and the availability of 

electricity. As a result, we estimate that between January 2004 and March 2006, due to 

limitations on its ability to export oil, Iraq lost a potential $16 billion in revenue from oil 

exports. In addition to lost export revenues, Iraq is paying billions of dollars to import 

refined petroleum products to support the consumption needs of its citizens. 

Multi-National Force-Iraq (MNF-I) and the Iraqi Ministries of Oil and Electricity 

maintain and report data on attacks against infrastructure. MNF-I attack data is classified. 

The Iraqi Ministries of Oil and Electricity report unclassified data. The Iraq 

Reconstruction Management Office, working with the Ministry of Electricity, has taken 

steps to improve the Ministry of Electricity’s data on attacks on electric infrastructure. 

Prior to this effort, data for attacks was categorized in an ad hoc manner along with all 

other causes for power outages, such as weather related incidents or equipment failures. 

The Iraqi Ministry of Oil’s attack data is limited to attacks against pipelines, and as such, 

excluded attacks against the nodal portions of the infrastructure. Its data therefore does 

not provide a clear picture of infrastructure vulnerabilities. 

Attacks against Iraq’s oil infrastructure have ebbed and flowed between January 2005 

and April 2006. Like attacks against oil infrastructure, attacks against the electric power 

infrastructure have also ebbed and flowed between January 2005 and April 2006. 

Protecting Iraq’s critical energy infrastructures from attacks is a combined effort 

involving three Iraqi ministries: Ministry of Defense, Ministry of Oil, and Ministry of 

Electricity. Each ministry contributes to the mission by providing, respectively, the 

following forces: Strategic Infrastructure Battalions as well as Iraqi Army forces, the Oil 

Protection Force, and the Electrical Power Security Service. The current capabilities of 

the forces vary. 

Security, however, is only one factor in addressing infrastructure protection. While much 

attention has been focused on insurgent attacks, it must be recognized that even if attacks 

ceased, other factors, such as criminal activity and the affect of aging and poorly 

maintained infrastructure on operating capability, would continue to affect oil exports and 

the availability of electricity. For example, attacks have had a limited impact on the 

failure to reach Iraq’s achievable electric capacity. In fact, while there were few attacks 

against oil and electricity infrastructure between late April 2006, and early June 2006, oil 

exports were below established targets and electric power generation was far below 

2 
demand. Further, once damage or disruptions occurs, it is critical that it be repaired 

quickly, but more needs to be done to enhance rapid repair capability. 

Both the U.S. Embassy and MNF-I have done considerable planning that addresses Iraq’s 

energy infrastructure. There are a variety of individual plans at different levels from the 

U.S. Embassy and MNF-I’s Joint Campaign Plan; to MNF-I and Multi-National CorpsIraq plans and orders to their subordinate commands; to the U.S. Embassy’s Critical 

Infrastructure Integrity Plan and Summer 2006 Energy Sector Action Plan. Each pertains 

to the implementing organization’s mission and responsibilities. 

Conclusion 

Over the past year, the U.S. government has done much to improve the capability of Iraqi 

infrastructure security forces, including training and equipping the Strategic 

Infrastructure Battalions and partnering coalition forces with Iraq’s Strategic 

Infrastructure Battalions, the Oil Protection Force, and the Electrical Power Security 

Service. The U.S. government has also developed an array of initiatives designed to both 

protect the energy infrastructure and facilitate transition of the responsibility for 

protecting it to the Iraqi government. 

The Iraqi government has much to do if it is to implement U.S. proposals as well as 

proposals put forth by its ministries. Progress in acting on them has been slow, in part due 

to the lack of a permanent government and in part to the limited initiative of some Iraqi 

ministries. Now that there is a permanent government in place it must take bold action. 

The new Iraqi government is pursuing initiatives to enhance the security and performance 

of the oil and electricity sectors, including increasing oil exports and providing electricity 

as top priorities. The Iraqi government’s plan identifies a number of steps that it says it 

will take to achieve these ends. The challenge for the United States is to help the Iraqi 

government move forward to undertake the tasks that need to be done if infrastructure 

integrity is to be improved. 

One way to encourage the Iraqi government to take needed action is to focus U.S. 

Congressional attention on what the new government is doing and still needs to do to 

address the integrity of its energy infrastructure. Current reporting by the Departments of 

State and Defense2 to Congress does not provide adequate information to inform 

Congress on progress being made by the Iraqi government and the status of specific steps 

the new Iraqi government has taken and what further specific steps remain to be taken. 

Currently the Departments of State and Defense reports only contain a general 

description of progress in Iraq, but not specific information on actions that need to be 

taken by the Iraqi government to enhance infrastructure integrity and the progress it is 

making in taking those actions. 

 

2

 The Department of State provides a quarterly report to Congress required under section 2207 of Public 

Law 108-106. In addition, on behalf of the President, the Department of State began providing a quarterly 

report to Congress on United States policy and military operations in Iraq under section 1227 of the 

National Defense Authorization Act for Fiscal Year 2006, Public Law 109-163. It issued the first report in 

April 2006. The Department of Defense provides a quarterly report required under section 9010 of the 

Department of Defense Appropriations Act 2006, Public Law 109-148. 

3 
Management Actions 

Working with SIGIR staff, the Iraq Reconstruction Management Office (Electric sector) 

has developed and implemented a new methodology for recording data on attacks against 

the electric infrastructure in response to concerns we raised about its existing 

methodology for recording attack data. Data based on the new methodology will enable 

the Iraq Reconstruction Management Office to better track and analyze input from the 

ministry. 

Recommendations 

We made a number of recommendations to the Commander MNF-I and the U.S. 

Ambassador to Iraq in several areas to further advance protection of Iraq’s infrastructure 

and transition the responsibility for protecting it to the new Iraqi government. The 

recommendations included but were not limited to: 

• encouraging action by the Iraqi government by continuing to emphasize the 

actions that the newly formed Iraqi government must take to enhance 

infrastructure integrity, making actions that need to be taken by the new Iraqi 

government part of subsequent U.S. action agendas, and emphasizing the capacity 

building process in discussions with the new government, and 

• to support transition plans, working with the Iraqi ministries to develop a 

performance-based reporting capability to identify their measurable events and to 

gauge progress in their infrastructure integrity capabilities. 

To improve Iraqi reporting on attacks against oil infrastructure, we recommended that the 

Director, Iraq Reconstruction Management Office, work with the Ministry of Oil to 

expand its reporting to include attacks against nodal infrastructure. 

To keep the U.S. Congress advised, we further recommended that the Secretaries of State 

and Defense enhance their existing quarterly reports to focus attention on progress being 

made by the new Iraqi government in addressing critical infrastructure integrity 

challenges. To the extent that such information is classified it should be reported in 

classified annexes. 

In commenting on a draft of the classified report, the U.S. Embassy, Baghdad, suggested 

that we add two additional recommendations to the U.S. Ambassador and Commander, 

MNF-I regarding encouraging the Iraqi government to take additional actions regarding 

Iraq’s oil and electricity infrastructure involving facilitating foreign investment in Iraq’s 

oil industry and encouraging developing a rapid repair capability. We believe that the 

suggested recommendations are consistent with the results of the audit and have merit; 

therefore, we added them to our report. 

Management Comments and Audit Response 

We received written comments on the classified report from the U.S. Embassy, Baghdad, 

Iraq, and from MNF-I. The Embassy stated that the report accurately captures the key 

issues that the Iraqi government needs to address to better protect its infrastructure as 

well as the U.S. mission’s engagement efforts with the Iraqi government on these matters. 

4 
MNF-I stated that it concurred with the overall findings of the report and had no major 

issues with its content. 

Because the underlying report was classified, we obtained an official classification 

review of this summary from the Commanding General, Multi-National Force-Iraq. The 

result of this review was a determination that this summary is unclassified. 

5 
Appendix A – Acronyms 

Acronym Definition 

MNF-I Multi-National Force-Iraq 

SIGIR Special Inspector General for Iraq Reconstruction 

U.S. United States 

6 
Appendix B – Report Distribution 

Department of State 

Secretary of State 

Senior Advisor to the Secretary and Coordinator for Iraq 

U.S. Ambassador to Iraq 

Director, Iraq Reconstruction Management Office 

Mission Director-Iraq, U.S. Agency for International Development 

Inspector General, Department of State 

Department of Defense 

Secretary of Defense 

Deputy Secretary of Defense 

Director, Defense Reconstruction Support Office 

Under Secretary of Defense (Comptroller)/Chief Financial Officer 

 Deputy Chief Financial Officer 

 Deputy Comptroller (Program/Budget) 

Inspector General, Department of Defense 

Director, Defense Contract Audit Agency 

Director, Defense Finance and Accounting Service 

Director, Defense Contract Management Agency 

Department of the Army 

Assistant Secretary of the Army for Acquisition, Logistics, and Technology 

Principal Deputy to the Assistant Secretary of the Army for Acquisition, 

Logistics, and Technology 

Deputy Assistant Secretary of the Army (Policy and Procurement) 

Director, Project and Contracting Office 

Commanding General, Joint Contracting Command-Iraq/Afghanistan 

Assistant Secretary of the Army for Financial Management and Comptroller 

Chief of Engineers and Commander, U.S. Army Corps of Engineers 

 Commanding General, Gulf Region Division 

Auditor General of the Army 

U.S. Central Command 

Commanding General, Multi-National Force-Iraq 

Commanding General, Multi-National Corps-Iraq 

Commanding General, Multi-National Security Transition Command-Iraq 

Commander, Joint Area Support Group-Central 

Other Federal Government Organizations 

Director, Office of Management and Budget 

Comptroller General of the United States 

Inspector General, Department of the Treasury 

Inspector General, Department of Commerce 

Inspector General, Department of Health and Human Services 

Inspector General, U.S. Agency for International Development 

President, Overseas Private Investment Corporation 

President, U.S. Institute for Peace 

7 
Congressional Committees and Subcommittees, Chairman and 

Ranking Minority Member 

U.S. Senate 

Senate Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on State, Foreign Operations and Related Programs 

Senate Committee on Armed Services 

Senate Committee on Foreign Relations 

Subcommittee on International Operations and Terrorism 

Subcommittee on Near Eastern and South Asian Affairs 

Senate Committee on Homeland Security and Governmental Affairs 

Subcommittee on Federal Financial Management, Government Information and 

International Security 

Subcommittee on Oversight of Government Management, the Federal 

Workforce, and the District of Columbia 

Select Committee on Intelligence 

U.S. House of Representatives 

House Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on Foreign Operations, Export Financing and Related Programs 

Subcommittee on Science, State, Justice and Commerce and Related Agencies 

House Committee on Armed Services 

House Committee on Government Reform 

Subcommittee on Management, Finance and Accountability 

Subcommittee on National Security, Emerging Threats and International 

Relations 

House Committee on International Relations 

Subcommittee on Middle East and Central Asia 

Permanent Select Committee on Intelligence 

8 
Appendix C – Audit Team Members 

This summary report was prepared and the review was conducted under the direction of 

Joseph T. McDermott, Assistant Inspector General for Audit, Office of the Special 

Inspector General for Iraq Reconstruction. The staff members who contributed to the 

review and the summary report include: 

Samuel Gonite 

Walt Keays 

Kenneth Littlefield 

Richard McVay 

Teravy Mol 

Larry Monson 

Steven Sternlieb 

Jason Venner 

9