Optimizing the long-term capacity expansion and protection of Iraqi oil infrastructure

Abstract

We introduce a tri-level defender-attacker-defender optimization model that prescribes how Iraq's oil infrastructure can, over time, be expanded, protected, and operated, even in the face of insurgent attacks. The outer-most defender model is a mixedinteger program that, given a set of anticipated insurgent attacks, specifies a quarterly capital expansion, defense, and operation plan to maximize oil exports over a decade-long planning horizon. The intermediate attacker model, observing the outer defender plans, is a mixed integer program that re-optimizes insurgent attacks to minimize export flow. The inner-most defender model is a linear program that re-directs flow in response to insurgent damage. We use open-source descriptions of current Iraqi oil infrastructure and reasonable estimates of the costs to expand capacity and/or defend operating assets, and reduce vulnerability to attacks. We solve this tri-level model by converting it into an equivalent bi-level one, and applying decomposition. For a range of scenarios, we determine the best allocation of effort between improving oil export infrastructure, and defending it.