Global Policy Forum

By Leon Barkho

Baiji, Iraq - With its aging, decrepit and war-battered equipment, the largest refinery in Iraq has turned into an economic and environmental nightmare. Its poorly working machinery can convert only half the 310,000 barrels of oil it processes each day into usable fuel. The other half becomes waste, a sulfurous goo held in giant pits at the plant or pumped off to evaporation ponds in distant valleys - to the horror of neighboring farmers. "We have almost run out of ideas on what to do," Ali Hameed, director general of state-owned Northern Oil Refineries, told The Associated Press. In addition, the refinery at Baiji, 130 miles north of Baghdad, lacks the equipment to clean the nearly 21,000 cubic feet of water used every hour. A canal carries the highly sulfurous waste water to the Tigris River. "We face two alternatives: Either to shut down the complex and bring life in the country to a halt, or continue despite the difficulties," Hameed said.

Baiji's daily output of 150,000 barrels provides half of Iraq's fuel needs and the country's two other major refineries are also operating at capacity and can't take up any slack. The other refineries also are experiencing the same waste problems. Before the Gulf War, there was little waste in the refining process; the water needed for the petroleum cracking processes was treated and used to irrigate farms. But the U.N. trade embargo imposed after Iraqi troops invaded Kuwait in August 1990 has prevented the government of President Saddam Hussein from importing replacement parts and equipment to keep the refineries running smoothly. Under the sanctions, Iraq has been allowed since 1996 to export some crude oil, but the revenues go into a U.N.-supervised fund to buy food, medicines and other humanitarian supplies for Iraqi civilians. However, U.N. officials have approved the purchase of some spare parts for the Baiji refinery and the Iraqis are now awaiting their arrival.

Besides having to deal with the normal wear and tear that degrades machinery, the Baiji complex was the target of fierce allied air attacks during the 1991 Gulf War. Hameed said about 80 percent of the plant was destroyed. The Iraqis were able to repair much of the damage, but there are numerous leaks in the network of pipes and cracking towers. More than 70 storage tanks out of 180 are unrepaired. Smoke and gas fumes make breathing difficult in some areas of the complex, which sprawls over nearly 12 square miles.

Oil for the refinery comes from Kirkuk in the north and from the southern fields of Rumaila. Kirkuk crude is highly sulfurous and more complicated to refine, while the oil from Rumaila is better-quality light crude. Officials at first tried to cope with Baiji's waste oil by pumping it back into some of the wells in the giant oil fields around Kirkuk. But soon they found the highly sulfurous waste was lowering the quality of Kirkuk crude even more by increasing its sulfur content.

Giant pits of fuel waste have accumulated in and near the Baiji complex, said Khaza'l Radhwan, Baiji's public relations officer. One pit accidentally caught fire, destroying a warehouse, he added. With the refinery complex running out of space to hold waste fuel, a canal was dug to carry it to valleys about eight miles away, Hameed said. Workers try to spread in it a thin layer so some will be evaporated by the sun, but villagers complain the oil is contaminating their farm land, he said.

The United Nations has given Iraq approval to use up to $600 million of its oil export revenues to upgrade its oil infrastructure, but that also includes pipeline materials and other parts in addition to refinery equipment. Faleh al-Khayat, director-general of studies and planning at the Oil Ministry, said the waste water problem at Baiji can be solved in one year once the parts arrive. For immediate repairs, Hameed said he needs up to $25 million in new equipment "to mitigate the impact on the environment." To get Baiji alone up to today's technical standards would take at least $500 million, he said.

Al-Khayat said that while the United Nations had approved contracts for repairing Baiji, it was holding up deals for equipment to solve similar problems at the refinery in Basra, Iraq's second largest with a capacity of 130,000 barrels a day. John Mills, spokesman for the Office of Iraq Programs at U.N. headquarters in New York, said the U.N. sanctions committee is aware of the problems plaguing Iraq's refineries and has been discussing it with Iraqi officials. "There has been a particular attention given by the experts to the need to reduce the environmental damage resulting from the current state of Iraq's oil industry," he said. He also said U.N. Secretary-General Kofi Annan has stressed to the Security Council the need to repair equipment at Baiji.