The ISIS terrorists have captured the largest refinery in Iraq, located in the town of Baiji, about 130 miles north of Baghdad. The terrorists overran a battallion of Iraq soldiers supported by helicopter gunships.

The capture of this key facility gives the terrorists a potentially rich source of income. And it deals another blow to Prime Minister Maliki and the Iraqi army.

The government spokesman, General Qassim "Baghdad Bob" Atta denies the refinery has been taken:

An Iraqi military spokesman, Gen. Qassim Atta, flatly denied that the Baiji refinery had fallen in a televised statement that he made hours after ISIS fighters had apparently taken over the refinery.

“Baiji is now under control of our security forces, completely,” General Atta said, appearing on Iraqiya, the state television channel.

Reports from Baiji sharply contradicted that assessment. A refinery worker who gave only his first name, Mohammad, reached by telephone, said that the refinery had been attacked at 4 a.m. and that workers had taken refuge in underground bunkers. In the course of the fighting, 17 gas storage tanks were set ablaze, although it was not clear by which side. After taking heavy losses, the troops guarding the facility surrendered and at least 70 were taken prisoner, he said.

[...]

General Atta, in his televised statement, said that Iraqi forces were continuing to fight in Baiji, and he praised the efforts of one air force pilot in particular in staving off the insurgents. “The air force is in the battle against them, with the support from the Golden Division of the Special Forces,” he said, referring to an elite unit that is reportedly under Prime Minister Nuri Kamal al-Maliki’s direct control. “We will continue our operations and we will not let anyone from ISIS take one foot of our lands.”

General Atta also said that Iraqi forces were making gains in several areas in the northern provinces of Salahuddin and Nineveh, and had retaken the city of Tal Afar, which was reported to have fallen to the militants on Monday.

He depicted a military situation that contradicted most reports from the field so far, saying that Iraqi forces had regained the initiative. “Now our forces are becoming stronger,” he said. “Now we are the ones who are taking the initiative and making the attacks, instead of defending.”

All is well. Remain calm.

The refinery is important but the power plant it fuels is more important. A large part of Iraq's electrical grid is now in control of the terrorists.

The Times story quotes an army officer who deserted once it became clear that the refinery would be taken. And this officer is from Iraq's best outfit?  If true - and Mr. Atta's nose is about 3 feet long today - that can't be good news for the government.

They are in deep trouble.