Cablegate: Input for New Required Reports to Congress On Energy


DE RUEHGB #0646/01 0650851
R 050851Z MAR 08





E.O. 12958: N/A
SUBJECT: Input for New Required Reports to Congress on Energy

REF: STATE 010743


1. (U) This report is prepared per reftel request under Sections
931(b) and (d) of the Energy Independence and Security Act (EISA) of
2007, requiring a description of the Department of State personnel
who are dedicated to energy matters at the U.S. Embassy in Iraq, a
major energy producer. The priority given to Iraq reconstruction
and stabilization efforts dictates a continuing need for a strong
presence in Iraq of federal personnel specializing in energy issues.
Iraq has the third largest deposit of proven petroleum reserves in
the world. Petroleum production accounts for over sixty percent of
Iraqi gross domestic product, and petroleum exports account for
approximately ninety percent of the Iraq central government budget.
The U.S. Department of Energy already has created an energy attache
office in Iraq, staffed with two professionals.

2. (SBU) Answers to the questions posed by reftel are listed

--A. Which section or sections of the Embassy handle energy matters?
What is the total number of staff in this section or sections?

The economic section has primary responsibility for energy policy
issues within the Embassy. The economic section has fifteen
employees in total, of which one is dedicated full time to energy
issues. In addition to the policy responsibility, Iraq is unique
due to the ongoing reconstruction effort, and so the economic
section also shares operational oversight of various Iraq
Ministries, including the relevant ministries of Oil, Electricity,
Planning and Development Cooperation, and Water. To assist in the
operational element, the Embassy also maintains the Iraq Transition
Assistance Office (ITAO) which has separate oil, electricity, and
water assistance units. The Office of Provincial Affairs (OPA),
which manages the Regional Embassy Offices, Provincial
Reconstruction Teams (PRTs) and embedded PRTs (ePRTs), oversees a
number of regional and local projects for the electricity and
petroleum sectors. To place the USG reconstruction effort in proper
context, it is important to add that there is a significant military
component, including the Army Corps of Engineers Gulf Regional
Division and an Energy Fusion Cell (but the military contribution is
beyond the requirements of this report).

--B Please identify the positions of employees that work on energy
matters and specify the percentage of time that such employees
devote to energy matters.

Economic section:
1 economic officer: 90 percent of the time;
1 economic officer: 10 percent of the time;
3 direct-hire energy consultants (3161s): 100 percent of the time;
1 DOE consultant on long-term detail to State: 60 percent of the
1 economic counselor: 15 percent of the time;
1 OMS: 5 percent of the time;
1 TCN: 10 percent of the time;
1 FSN: 10 percent of the time.

Coordinator for Economic Transition (CETI):
1 Ambassador: 10 percent of the time;
1 Chief of Staff: 5 percent of the time;
1 OMS: 5 percent of the time;

Iraq Transition Assistance Office (ITAO):
3 oil consultants: 100 percent of the time;
10 electricity consultants: 100 percent of the time;
1 OMS: 100 percent of the time.
(NOTE: ITAO replaced the former Iraq Reconstruction Management
Office, IRMO, which also had in FY 2007 six oil consultants, three
of whom moved to ECON as 3161s).

Office of Provincial Affairs (OPA):
4 economic officers: 100 percent of the time;
11 economic officers: 5 percent of the time;
1 electricity consultant: 100 percent of the time;
(plus 2 as yet unfilled slots for oil consultants)

2 Foreign Service officers (director and deputy of Capacity Building
Office): 10 percent of the time;
1 Energy Advisor (institutional contractor): 100 percent of the
As of January 2008, Capacity Development contractor staff: 20 energy
advisors (working with both ministries of oil and electricity) 100
percent of the time;
Chief of Party (overall head of project) estimated 20 percent of the
Other project staff (life support, administration, security,
training and other technical assistance staff) estimated 10 percent
of the time.

--C. Please provide a brief narrative description of the positions
of employees that work on energy matters (econ officer, EST
counselor, FSN, etc.), the kinds of work they do (for example,
report on oil ministry, contact with oil companies, energy
dialogues, civilian nuclear programs), and any special information
about their qualifications.

Energy issues are guided by the Coordinator for Economic Transition
in Iraq (CETI), who also directs the activities of nine economic
entities in the Embassy: the Economic Section, the Energy Attache,
Treasury Attache, Foreign Agricultural Service (FAS), Foreign
Commercial Service (FCS), Health Attache, Iraq Transition Assistance
Office (ITAO), Transportation Attache, and USAID, with the goal of
promoting an open, diversified, and expanding Iraqi economy. Per
NSPD 36 of 5/11/04, which states the Chief of Mission is responsible
for the supervision and general direction of all assistance for
Iraq, CETI also oversees USACE/GRD reconstruction projects, many of
which have been in the energy sector. Day to day management of
energy issues is led by the Petroleum and Energy Infrastructure
Chief, an economic officer who coordinates energy policy issues with
the relevant sections of the Embassy and with Coalition Forces. The
incumbent supervises a junior economic officer as well as the four
senior energy consultants forming the Economic Section's Oil Group,
and is directly supervised by the Economic Counselor. The junior
economic officer, at present an attorney with previous experience in
the petroleum industry, has an active portfolio concentrating on
other economic sectors, but is often called upon for projects to
support the Petroleum and Energy Infrastructure Chief. The DOE
consultant has an M.S., B.S. Petroleum Engineering, minor Business
Management, and B.S. Geological Engineering, has been in Iraq for 5
years, and had 23 years experience in the petroleum industry,
including production, drilling, and facility engineering;
operations, maintenance, gas processing, crude and gas sales, plus
criminal investigation and law enforcement. The Oil Exploration &
Production Consultant has a B. S. & M. S. in Geology and thirty-two
years of world-wide, technical and managerial, experience in the oil
industry, including twenty-five years service with a major oil
company. The Oil Analyst Consultant has 28 years of broad based oil
experience at the technical and senior management levels. Another
Senior Oil Consultant has a BSME and over 35 years experience (28 in
the Middle East Oil & Gas industry including Saudi Aramco) primarily
within program management, process and technical areas.

With regard to the type of work performed, unlike most other posts,
Embassy Baghdad operates in an active war zone. Travel outside the
International Zone entails extraordinary security measures. Contact
with Iraqi officials is consequently difficult, but the officers and
consultants maintain contact as regularly as possible to provide
technical advice and assistance; report on developments, plans, and
obstacles; and support the ongoing transition. USAID maintains two
compounds for its contractors to facilitate engagement with and
training of Iraq government officials. A new team of USAID
contractor energy advisors was mobilized in January 2008 as part of
the civilian surge for ministerial capacity development; they will
work with the oil and electricity ministries on energy related
problems and capacity building in areas of public administration,
including budget execution. Officers at the regional offices and
PRTs, under the management of the Office of Provincial Affairs
(OPA), maintain contacts subject to the prevailing conditions of the
battle space, and provide both technical assistance and direct
project support.

At present, civilian nuclear programs are handled by the office of
the Energy Attache in Baghdad.

--D. Budget: Please provide the amounts of State Department funds,
including salary costs (prorated as applicable), spent by your post
in FY 2007 on energy-related activities in two categories:
State Department expenditures in FY 2007 on energy-related
activities in Iraq for personnel is especially difficult to
estimate, since personnel levels varied so much over the course of
the year, but probably exceeded USD 2 million. USAID expenditures
were approximately $300,000 total (2 Foreign Service officers,
director and deputy director of Capacity Building Office:
approximately $20,000 and $30,000, respectively; 1 Energy Advisor,
institutional contractor: approximately $250,000).

State Department expenditures in FY 2007 on energy-related
activities in Iraq for programs exceeded USD 1.181 billion,
primarily via IRRF programs. ESF funds for contractors were used as
well, but once ESF funds are apportioned to USAID, they no longer
constitute State Department funds, nevertheless, in order to provide
a more complete understanding of the USG effort in Iraq, USAID
Capacity Development contractor staff expenditures in FY2007 reached
$600,000 (two advisors, approximately $300,000 each).


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