VZCZCXYZ0000
RR RUEHWEB

DE RUEHGB #1260/01 1331433
ZNR UUUUU ZZH
R 131433Z MAY 09
FM AMEMBASSY BAGHDAD
TO SECSTATE WASHDC 3047

UNCLAS BAGHDAD 001260 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: PGOV ECON IZ
SUBJECT:  IRAQI MINISTER OF ELECTRICITY INVITES SECRETARY OF ENERGY 
TO BAGHDAD FOR DISCUSSIONS 
 
This message contains an action request . 
 
¶1.  Summary and action request: Iraq's Minister of Electricity 
passed ITAO a letter of invitation to US Secretary of Energy Chu to 
come to Iraq for bilateral discussions of four Iraqi power sector 
challenges: power plant construction, Iraq's participation in global 
emissions reductions, solar and renewable technology and mentoring 
of young Iraqi professionals in the sector.  Minister Dr. Karim W. 
Hasan's letter suggests this meeting as the first in an on-going set 
of discussions between the agencies on how to help Iraq rebuild its 
own electric-power infrastructure. Minister Karim asked us to help 
translate the text of the letter and to deliver it to Secretary Chu. 
Informal Embassy translation is at para 2.  A signed hard-copy from 
the Minister will be forwarded by pouch.  We request that the 
Department pass this letter to the Department of Energy.  End 
summary and action request. 
 
¶2.  Begin Embassy informal translation: 
Dear Secretary Chu: 
Permit me to welcome you to the fraternity of national energy 
ministers.  I know you will find your work both challenging and of 
genuine importance to the people of the United States and of the 
entire world. 
We have not yet had the opportunity to meet and the purpose of my 
letter is to extend my invitation to you to visit Iraq so that we 
can discuss in detail a number of initiatives in which I believe we 
can have a deeply shared interest.   While you and I may face 
somewhat different issues at the moment, we come from similar 
viewpoints I believe.  We are both professionals in the energy arena 
and neither of us is a politician (although we both now live in the 
political and governmental world).   Although my academic and 
research career is not nearly as distinguished as yours, I have had 
the great pleasure of serving on the faculty of the University of 
Technology, Baghdad and mentoring some outstanding young people as 
they have pursued their advanced degrees in the engineering 
sciences. 
As President Obama has charged you with leading the United States in 
revolutionizing its approach to energy production and use, so too 
have I been a assigned a historic mission by Prime Minister Nouri 
al-Maliki and our Council of Ministers and Council of 
Representatives.   Iraq has embarked on what may be the most 
ambitious national electrification program since the undertakings of 
your country during the New Deal of President Franklin Roosevelt. 
And, we are starting this journey from quite a different spot than 
one might think from reading the news about Iraq.   Two decades ago, 
before my nation's affliction by dictatorship, war and international 
sanctions, Iraq had the most developed electric network in the 
Middle East.   Iraq's grid and its power plants were well designed 
and built and professionally operated.  Not only was there 
sufficient power, Iraq was actually a net exporter of electricity. 
It is my personal and professional goal to achieve that status once 
again, but to do so in a thoroughly modern way, with concern for the 
environment and using cutting edge technology. 
I do realize, of course, that Iraq is not an island and that we 
cannot reach our goals by ourselves.  There are four areas of 
concern about which I hope this letter can initiate communication 
between the two of us on an ongoing basis.  These are: 
1) Power Plant Construction 
2) Participation in Global Emissions Reductions 
3) Deployment of  Solar Technology 
4) Mentoring of Young Iraqi Energy Professionals. 
Power Plant Construction 
My Ministry has worked closely with the United State Embassy in 
Baghdad over the past several months to conclude contracts for 80 
QBaghdad over the past several months to conclude contracts for 80 
gas turbines with total nameplate generating capacity of 
approximately 10,000 MW.  One of these transactions is regarded by 
General Electric as the largest single such deal in its history. 
There are many challenges as we proceed over the next several years 
to install and operate these units.  This program is intended to 
bring production into balance with consumer demand that has grown 
dramatically in the past six years. 
One of the most important problems is that while these new turbines 
are designed to operate most efficiently and cleanly on natural gas, 
Iraq's system for the collection and treatment of gas associated 
with oil production is woefully inadequate.  Therefore, we expect 
that many of these turbines will need to utilize heavy fuel oil at 
the outset.  While progress is now being made in the development of 
the collection and treatment facilities, more should be done and 
done more quickly.  Shell has recently commenced such a program in 
cooperation with South Gas Company, a division of the Iraq Ministry 
of Oil. 
Our most significant difficulty at the moment is that the magnitude 
of our generation program is such that the Ministry itself is not in 
the position to carry out construction, commissioning and operation 
of the entire project.  In addition, the dramatic decline in oil 
prices means that Iraq does not have the funds necessary finance the 
installation of all of the turbines that are being purchased. 
Therefore, we are seeking foreign inward investment in electricity 
projects.   We are prepared to exert every effort to work with 
high-quality international independent power plant developers to 
develop, own and operate projects using the turbines. 
I believe that both of these areas are ones in which your Department 
may be in a position to offer advice, introductions and even 
 
advocacy. 
Deployment of Solar Technology 
Although Iraq is one of the sunniest places on earth, we have not 
yet been in a position to aggressively deploy solar technology 
appropriate to our situation.  It is important to note, however, 
that over the past two years, Iraq has carried out an interesting 
and successful application of solar technology. In Baghdad and in Ar 
Ramadi, we installed 10,000 solar street lights that helped to deter 
criminal elements and thereby help law-abiding people reclaim their 
neighborhoods in the evening.  In my opinion, there is substantial 
potential in Iraq for significant expansion of solar powered outdoor 
lighting and for the deployment of solar units suitable for rural 
areas for such varied purposes as water pumping, indoor appliances, 
water purification and powering of computers and other equipment in 
schools.  While my Ministry can identify solar opportunities in a 
general way, I believe that the assistance of your Department would 
allow Iraq to move ahead much more rapidly and to make the correct 
choices in deploying solar. 
Participating in Global Emissions Reductions 
One of the most important challenges for Iraq's electricity system 
is to provide natural gas for use in turbines in order to get away 
from heavy fuel oil which produces far more harmful emissions. 
About two-thirds of current available gas is being wastefully flared 
and it is estimated that these supplies alone could power 6,000 MW 
of turbine generation.   By collecting and treating this gas and 
using it to displace polluting heavy fuel oil, Iraq can 
substantially reduce the emissions associated with meeting the 
electric needs our people.  Again, however, while we can identify 
the proper general course, I would ask that you consider ways in 
which the expertise resident in your Department can be of 
assistance.  One area of particular interest is whether Iraq could 
participate in carbon emission reduction markets such as those 
operating in Europe and which I expect will soon be authorized in 
the United States.  Iraq could earn funds by reducing its emissions 
and then apply those funds to further efficiencies in our electrical 
system. 
Mentoring Young Iraqi Energy Professionals 
It is often accurately pointed out that Iraq has had a brain drain 
for many years due to the strife in our country.  However, it is 
less well understood that Iraq is a young country from a demographic 
point of view, with almost 40% of our population under age 15.  Many 
of these young people have had good elementary and secondary 
educations and have knowledge of English.  In addition, in the midst 
of our suffering, our colleges and universities have continued to 
operate and our science, engineering and technical programs are 
still well-regarded.  Nonetheless, our young people do not have the 
sort of access to mentoring and professional development that they 
and Iraq need.  I am most interested in discussing with you the 
development of opportunities for young energy professionals to 
participate in mentoring programs and internships and on-the-job 
training that will help them to bring back skills and to transfer 
knowledge to other young people here in Iraq, especially within my 
Ministry and in the private energy sector. 
 
Finally, Mr. Secretary, I wish you well in all of your endeavors and 
hope that we can meet soon here in Baghdad.  You will find Iraq a 
far different place than you might expect and I sincerely wish to 
work with you in developing my country and in advancing the cause of 
environmentally conscious energy production and use. 
 
¶3.  Comment:  We believe this letter is best understood in the 
context of Minister Karim's efforts within the GOI to improve 
Qcontext of Minister Karim's efforts within the GOI to improve 
coordination between his Ministry of Electricity and the Ministry of 
Oil.  His letter pinpoints the immediate hurdle the Ministry of 
Electricity (MoE) faces: the lack of sufficient funds to finance and 
expertise to execute the construction of the multi-billion dollar 
generation assets it has purchased.  But Karim is also attempting to 
engage the USG in a process to clear the central impediment to 
Iraq's execution of a national energy strategy: the lack of planning 
coordination between the MoE and the Ministry of Oil (MoO) in the 
design, construction and fueling of the power plants scheduled to 
double Iraq's power production in the next three years. Karim raises 
environmental concern as a catalyst to fuse a necessary joint MoE 
and MoO planning exercise; and wishes to leverage the US DOE to do 
it. Even the most minimally efficient electric power plants would 
require that MoO play a very active role in MoE's planning process. 
If Karim can frame the conversation of the construction campaign 
within the context of environmental concerns, he may be able to 
induce MoO's participation because the solution necessitates 
consideration of using flared associated and natural gas to power 
the new generators. Getting DOE buy-in would provide Karim with yet 
another pressure point to press MoO into investing its capital to 
help build the electric power infrastructure.  End comment. 
Butenis