The turmoil gripping Iraq shackles its energy infrastructure as well, leaving an energy-rich country struggling to meet basic electricity needs for many of its citizens.

Recent fighting between the Iraqi army and the Islamic State (ISIS) in the province of Diyala, east of Baghdad, has disrupted construction of a natural gas pipeline to fuel Iraqi power plants. Numerous attacks on the line have resulted in casualties among Iranian engineers and delayed imports from Iran until 2015 at least, several news agencies have reported. The troubles transcend the economic sanctions imposed against Iran.

“Getting the lights on in Iraq is a big deal,” Jim Krane, a fellow in energy and geopolitics at Rice University’s James A. Baker III Institute for Public Policy in Houston, told Midstream Business. “It’s a big policy priority in Washington and has been for a long time. Getting gas to the power sector should warrant Washington’s support even though some of that gas would be exported from Iran.”

The Iran-Iraq Pipeline is part of an agreement between the two countries made in June 2013, according to the U.S. Energy Information Administration website. The initial contract called for Iran to supply 880 million cubic feet per day of natural gas to fuel Iraqi power plants in Baghdad and Diyala. A subsequent agreement increased shipments to 1.4 billion cubic feet per day.

“Iran and the Shia-dominated government of Iraq are pretty friendly right now,” Krane said. “It’s also strongly in Iran’s interest to help stabilize Iraq under the control of the current government.”

Not an easy task with ISIS controlling one-quarter of the country. The pipeline in question is located in a particularly challenging area.


Diyala province in Iraq on the Iranian border.

“Baqubah and Diyala, that’s a pretty tough part of Iraq,” said Krane, who covered the region as a correspondent for the Associated Press in 2003 and 2004. “It’s got a volatile mix of Sunnis, Shias and Kurds and sits between Baghdad and the smuggling-prone Iranian border. Any anti-government forces in Diyala would certainly see a gas pipeline bringing Iranian gas to the capital as a legitimate and worthwhile target.”

Insurgents’ rules of engagement regarding energy infrastructure in that country are fairly simple, Krane said: “If the government controls the area, then any kind of an infrastructure that can be attacked—whether it’s power or products or exports—if somebody can get to it and blow it up, they do. If insurgents control the area, their tactics change. Instead of blowing it up, they maintain it.”

The Northern Pipeline, which runs from Kirkuk to Ceyhan, is partly under the control of ISIS at the moment and has not been damaged. The Houston Chronicle reported that ISIS is selling between 10,000 barrels per day (bbl/d) and 100,000 bbl/d on the black market at a significant discount, generating as much as $3 million in revenue per day.

“The volumes are quite small,” Shwan Zulal, a London-based energy consultant, told the newspaper, “but it’s significant for a terrorist organization to have that source of financing.”

If the situation on the ground changes and Iraqi control returns to the north, expect ISIS forces to destroy the pipeline during their retreat to deny the government a valuable resource, Krane said, just as in Diyala.

“The state wants to show that it’s in control,” Krane said. “It wants to deliver power to people; it wants to make sure people have some energy, some semblance of a normal life, so it’s in ISIS’ interest to prevent that from happening.

“And in areas that they do control, their strategy would be the opposite,” he continued. “They want to show that they’re better at providing the semblance of normal life, and that they can do a better job than the government can. And, oh by the way, when the government attacks, they’re going to kill lots of civilians. That is why ISIS forces tend to put themselves around civilians and try to provoke attacks that kill civilians. The strategy binds civilians yet more closely with the insurgent group.”

Even a U.S.-led global alliance intent on ridding the region of the Islamic State offers no assurance of a quick resolution.

“Despite the unmet demand for gas in Iraq, and the continued burning of more valuable crude oil in power generation, I would expect that the threat of sabotage and attack would outweigh those concerns,” Krane said. “It’s hard to see that pipeline getting built while civil war rages in Iraq.”