Report

Revenge of the Kurds II

Can the Kurds prevent Maliki from sabotaging the country's oil infrastructure?

NOTE: This story was updated late Friday.

Iraqi Kurds capped a week of steadily increasing tension with Baghdad by sending troops to seize oil fields near Kirkuk before Prime Minister Nouri al-Maliki could take the extraordinary step of destroying some of his own country's oil installations. The move raises the specter of armed conflict between the restive northern region and the central government and seemingly accelerates the very disintegration of Iraq that the United States seeks to avoid.

Relations between Baghdad and Erbil were already in free-fall after Maliki labeled the Kurdistan region a haven for terrorists earlier this week. The Kurdistan Regional Government lashed out, calling the Iraqi prime minister "hysterical" and quitting day-to-day cooperation with the Iraqi government. Preemptively seizing the oil fields to forestall what the Kurds say was a concerted sabotage campaign marks a major escalation in the increasingly acrimonious relation.

Friday morning, July 11, Kurdish military forces seized a pair of Iraqi North Oil Company (NOC) fields near Kirkuk. The Kurdistan Regional Government (KRG) said that it stepped in because the Iraqi Oil Ministry planned to disrupt a new pipeline connecting the fields to Kurdish export pipelines; the Kurds built the pipeline after occupying the city of Kirkuk last month to give the country a northern route to export oil.

"This morning's events have shown that the KRG is determined to protect and defend Iraq's oil infrastructure whenever it is threatened by acts of terrorism or, as in this case, politically motivated sabotage," the KRG's statement read. The KRG accused Baghdad of ordering NOC staff to "dismantle or render inoperable" valves on the new pipeline, which the Kurds say is crucial to keeping oil exports flowing in the violence-battered country.

The Iraqi Oil Ministry called the allegations "ridiculous," Bloomberg reported. Because of damage caused by earlier terrorist attacks on a separate export pipeline and the shutdown of a nearby refinery, the fields are producing only a fraction of their 500,000-per-day barrel potential. The KRG produces 360,000 barrels inside its territory.

The big questions now are: How much more will the move strain the unity of an Iraqi government still struggling to push back against a spring offensive by Islamist insurgents? And how will the Kurds actually sell the additional oil they now control? As a solely regional government, the KRG has hit major obstacles in finding international buyers for its crude since it began trying to sell abroad earlier this year -- largely because of Baghdad's threats and diplomatic pressure.

The Kurdish seizure will aggravate U.S. goals of getting Iraq's Sunni, Shiite, and Kurdish populations to work together to fight the Islamic State, formerly known as ISIS. Coupled with strident talk of an independent Kurdish state, it further complicates efforts to broker a truce between Baghdad and Erbil, especially regarding international oil sales.

"The Kurds are playing an increasingly bold hand and it limits their options in terms of any kind of compromise with Baghdad or backing down from the path that they're setting off on," said Richard Mallinson, a geopolitical analyst at Energy Aspects in London. "But there are no guarantees that they'll be successful in going down that path in securing political and financial independence from Baghdad."

The United States still wants the KRG to work with Maliki's sectarian and divisive government, even after Kurdish forces were the only ones that stood up to the Islamic State's initial advances last month. Brett McGurk, the State Department's top Iraq official, is in Iraq cajoling all sides to work together.

State Department spokesman Eddie Vasquez said in an email Friday that the United States urges all Iraqis to equitably determine how to share their national oil resources. "Iraq’s energy resources belong to all of the Iraqi people," he said, reiterating U.S. calls for Iraqi political unity in face of the threat posed by ISIS.

"As we have said, we support a unified and federal Iraq as defined in the Iraqi constitution, and the Kurds’ participation in the government formation process is essential. We urge all parties in Iraq to continue working together toward that objective," he said.

But for Kurds, the future of all that oil is at stake. Erbil said it hopes to meet local shortfalls in refined products with output from the seized fields, but that area lacks refinery capacity. And claiming that Baghdad has not handed over the Kurdish share of national oil revenue, it also hinted that it would try to sell the crude.

That won't be easy. Even though the KRG opened its own pipeline to Turkey to jump-start its exports, international buyers remain leery of snapping up Kurdish crude. That's because Baghdad insists that oil produced in Iraq must be sold through the central government. For months, Baghdad lobbed legal threats at the regional government in the Kurdish area and in Turkey to forestall the oil sales; the morning ISIS captured Mosul, Iraq's second-biggest city, Baghdad was threatening action at the United Nations over Kurdish oil.

The pressure seems to have worked. Although the Kurds have loaded four tankers with crude, only one has found a buyer. Several have been at sea for weeks.

"The problem for the Kurds now is that the dominoes aren't falling -- they filled up these tankers and they've only sold one," said Matthew M. Reed, vice president at energy consultancy Foreign Reports.

Broadly speaking, there are two obvious paths the Kurds can pursue: finally reach a deal with Baghdad to remove the legal ambiguities, or declare independence. But, Mallinson said, the more the Kurds inch toward the latter, the more they rule out the former.

"Every move the Kurds are taking at the moment is almost calculated to create hostility amongst the other main communities in Iraq," he said.

Turkey, which is enabling modest exports of Kurdish crude, could help solve the impasse. Kurdistan has a major shortage of fuel, especially gas and diesel, after Islamic State militants surrounded the biggest refinery in northern Iraq last month. Turkey has spare refining capacity that could be reached by the existing pipeline network.

"If Turkey wants to save the day for the Kurds, they could refine the oil and sell it back to them," said Reed. The Turks could sidestep any outrage from Baghdad by presenting such a transaction as a humanitarian move to supply much-needed fuel to thousands of desperate people, he added.

Photo by Safin Hamed - AFP - Getty

Report

The Snowden Aftermath (Revised)

Intelligence leaks may have caused damage, but it's not irreparable.

To hear some of America's top intelligence officials tell it, the damage the most famous leaker in history inflicted on U.S. spying might not be as severe as previously thought, and the storm that beset the National Security Agency when former contractor Edward Snowden exposed a trove of top-secret documents to journalists may finally be subsiding.

In public remarks and in interviews, both the new director of the NSA, Adm. Michael Rogers, and the director of national intelligence, James Clapper, call the leaks significant, but neither portrays the aftermath as irreversible nor unrecoverable. The shift in tone among America's top spies is strikingly different from when Snowden first opened his files in June 2013. Then-NSA director Gen. Keith Alexander warned that "people will die" because circulating that information publicly would make it harder for the agency and its foreign allies to foil terrorist plots. The leaks, Alexander said, caused "the greatest damage to our combined nations' intelligence systems that we have ever suffered."

But now, a more optimistic perspective is taking hold, just as Rogers tries to move beyond a hellish year and boost morale at the NSA, where employees are eager to build new spying systems to replace the ones they may have lost, said several former officials who maintain close ties to the agency.

"You have not heard me as the director say, 'Oh, my God, the sky is falling,'" Rogers told the New York Times in June, in his most extensive remarks about the leak fallout. That comment seemed to regrind the lens through which the entire Snowden affair should be seen. "I am trying to be very specific and very measured in my characterizations," Rogers said.

Earlier that month, Rogers also downplayed speculation that Snowden was a Russian spy and that his leaks were part of a plot to undermine U.S. national security. "Could he have [been a spy]? Possibly. Do I believe that's the case? Probably not," Rogers said at a conference. That put the NSA chief at odds with purveyors of conventional Washington wisdom. The chairman of the House Intelligence Committee, Michigan Republican Mike Rogers (no relation), had suggested to NBC's Meet the Press in January that it was no accident Snowden made his way to Moscow after exposing the NSA's secrets. And in early June Alexander had told Bloomberg Television, "I think he's working for them," meaning the Russians. "I wouldn't go so far as to say a double agent, but he's working for someone."

The NSA's Rogers isn't a lone voice. In an interview with the Washington Post in June, Clapper said that the former NSA computer administrator couldn't access as many sensitive documents as investigators previously thought. "We're still investigating, but we think that a lot of what he looked at, he couldn't pull down," Clapper said. "Some things we thought he got he apparently didn't."

Any hint of revisionism doesn't sit well with some of the intelligence agencies' overseers. Reacting to the NSA director's comments to the Times, Rep. Rogers told Foreign Policy: "I'm certainly hoping that [his] comments were taken out of context … because that is completely inconsistent with what we have seen in the Intelligence Committee."

The congressman said Snowden put U.S. forces overseas at greater risk of attack by terrorists and militants. The NSA director's remarks could be seen as "flippant," the lawmaker said, adding that he was "frustrated" by any attempts to downplay the Snowden damage. Admiral Rogers "will have a chance to explain to the committee why he's saying that," the congressman added. (A spokesperson for the NSA had no comment for this story.)

The panel's top Democrat, Maryland's Dutch Ruppersberger, echoed the chairman's concerns. "I think the damage is as severe as any individual who has turned on his country," Ruppersberger told FP. The congressman even averred that the extent of the harm is "worse that people have been saying." The Defense Intelligence Agency concluded that "80 to 90 percent" of the information Snowden stole concerns current military operations, which could be jeopardized, he expanded.

The NSA's Rogers does not think the fallout was without grave consequences. "I have seen groups not only talk about making changes [as a result of exposed intelligence-gathering methods] -- I have seen them make changes," he told the Times. But then Rogers made his comment about the sky not falling, suggesting that America's adversaries had not entirely evaded detection.

Likewise, Clapper called the effects of the leaks "profound," but his remarks contrasted with previous estimates that Snowden took more than 1.7 million classified documents, all of which were highly sensitive. That cache purportedly included what one top NSA official told CBS's 60 Minutes were "the keys to the kingdom" or the "road map" to avoiding the NSA's electronic sentries. But, the Post reported, intelligence officials now think prior estimates, including that Snowden potentially compromised the military's command-and-control communications networks, "may have been too extreme."

In interviews this week, former intelligence officials sought to strike a similar balance as Rogers and Clapper. "I think it was a catastrophe," one former senior intelligence official who has relationships with NSA employees said. "However, I think that now that NSA has looked at it, they have a sense of what [Snowden] took, and they're being more precise about the damage he caused. It's probably not irreparable, but it's a setback."

Former NSA Director Mike McConnell recently told a conference audience that his successor is trying to boost morale: "As director of NSA, your first responsibility is to be the chief cheerleader." McConnell said that "no spy has done more damage" than Snowden and that Snowden gave away the "guidebook" for how the NSA secretly monitors phone conversations, emails, and other digital ephemera. But he tempered that harsh assessment with a hopeful outlook.

"If we have the will and the resources and we stay with it, we will be able to recover at some time," said McConnell, who also served as a director of national intelligence under George W. Bush.

If Rogers is trying to lift NSA employees' spirits, it's for a practical and necessary goal, said another former senior U.S. intelligence official, who asked not to be identified when discussing the inner workings of the agency. "Whatever Snowden did, the NSA has to find a way to succeed. It must prevail against the challenges it faces. What Rogers is saying is this can't be the end of the world."

Last year Alexander was trying to grab people's attention, particularly on Capitol Hill, with his dire rhetoric, said the former official. (Another who worked with Alexander called his former colleague's word choices occasionally "hyperbolic.")

"I think he [Alexander] was putting an exclamation point behind very real concerns," the first former official said, adding that he also sides more with the retired general's severe appraisal. "People have to know that lives hang in the balance."

How does that square with Rogers's statements, which suggest the worst may be over? "I think they can both be right," the former official said.

Photo by Mandel Ngan / AFP