I thought the Iraqi oil industry was supposed to be paying US to fix up the mess we made in Iraq!?
WTF? Bush is asking for ANOTHER $2.1 BILLION to pay for the Iraqi oil industry! And half of it is going to BUY "petroleum products to ensure some reserve margin, so that the Iraqi people have a safe supply of oil if future disruptions of service occur." IN IRAQ! The nation with the third largest oil reserves on the planet!
Didn't ANYONE in the Bush administration plan for ANY of this? I guess this kind of shoots a few holes in the claims made here by some that everything is going just fine and according to plan over in Iraq.
Bush Seeks $2.1 Billion More for Iraqi Oil Industry
By NEELA BANERJEE
The Bush administration is calling for an additional $2.1 billion to repair the Iraqi oil industry, a sharp increase from previous estimates that underscores how the sabotage of pipelines and the electricity grid has throttled the flow of oil for export and into domestic refineries.
As late as last month, the United States-led civil authorities in Baghdad and the Iraqi oil ministry said that about $1.1 billion would be needed to make crucial repairs to the oil industry by March 2004. A spokesman for the White House's Office of Management and Budget, Trent Duffy, said that the request for an additional $2.1 billion came from the office of L. Paul Bremer III, the head of the civil administration in Iraq. The sum is part of a supplemental $87 billion budget the Bush administration is preparing to seek from Congress to support American troops in Iraq and to finance the country's reconstruction.
In a letter sent yesterday to the Office of Management and Budget, two Democratic congressmen, Henry A. Waxman of California and John D. Dingell of Michigan, called the request "a radical departure from the administration's prior estimates of the costs of oil field reconstruction." They added, "Moreover, it was apparently developed without consultation with the Army Corps of Engineers, the agency overseeing the oil field reconstruction."
A spokesman for the Corps of Engineers said that it had not been contacted by the administration to develop the new estimate, but it remains unclear whether Mr. Bremer's administration spoke to the Corps of Engineers staff in Iraq. The congressmen have asked the budget office for a detailed explanation of how the estimate was derived and a list of the projects involved.
Mr. Duffy said that the administration had not yet formally asked Congress for the $87 billion, and when it did some time in the next few weeks, it would provide the explanations sought by the congressmen.
The request for the additional money has highlighted how hard it has been for the occupying powers to halt the sabotage that chips away at the oil sector and limits its output. During the war, the administration, its British allies and many oil traders were convinced that Iraqi oil production would quickly resume and jump back to levels before the war.
Instead, saboteurs have repeatedly blown up crucial pipelines that export oil from the Kirkuk fields in the north to the Turkish Mediterranean port of Ceyhan, choking off the second of Iraq's two export routes. And repeated sabotage of the electricity grid periodically brings oil operations to a standstill.
As a result, Iraq exported only about 800,000 barrels a day in August, less than half of the approximately two million barrels a day it exported before the war. Moreover, the Iraqi oil industry often cannot produce enough for the domestic market because of sabotage. When refineries, in particular, are shut by power failures, it takes them about a week to come back online, which limits the production of gasoline, cooking gas and other fuels.
Of the $2.1 billion the administration plans to request, a little more than half would go to "repairs and security because of increased sabotage," Mr. Duffy said. A little less than half would go to buying "petroleum products to ensure some reserve margin, so that the Iraqi people have a safe supply of oil if future disruptions of service occur," he said.
Iraq, which has the third-largest oil reserves in the world, after Saudi Arabia and Canada, has been importing petroleum products since late May.
The Corps of Engineers has also spent more on oil reconstruction than it originally envisioned, largely because of the sabotage, said Scott Saunders, a spokesman. In early summer, the corps estimated that it would need to spend about $650 million on repairs to the Iraqi oil industry. But as of early September, it had already spent $948 million as part of a continuing contract with Halliburton. Aspects of this increase were reported yesterday by The Wall Street Journal.
The Corps of Engineers has spent much of the money to make the same repairs repeatedly. For example, a ruptured pipeline that the Americans fixed was blown up two days later, Mr. Saunders said. The corps is also paying much more than early in the summer to import petroleum products from other Middle Eastern countries into Iraq. Earlier, the corps spent about $3 million to import gasoline and cooking gas. But it must now import diesel fuel and kerosene as well to prepare for the winter heating season until Iraq can produce enough on its own.
Given the spotty security of the oil industry, when that might occur remains unclear, and the Corps of Engineers declined to estimate how much more it would have to spend as repairs continue on Iraq's oil facilities.
WTF? Bush is asking for ANOTHER $2.1 BILLION to pay for the Iraqi oil industry! And half of it is going to BUY "petroleum products to ensure some reserve margin, so that the Iraqi people have a safe supply of oil if future disruptions of service occur." IN IRAQ! The nation with the third largest oil reserves on the planet!
Didn't ANYONE in the Bush administration plan for ANY of this? I guess this kind of shoots a few holes in the claims made here by some that everything is going just fine and according to plan over in Iraq.
Bush Seeks $2.1 Billion More for Iraqi Oil Industry
By NEELA BANERJEE
The Bush administration is calling for an additional $2.1 billion to repair the Iraqi oil industry, a sharp increase from previous estimates that underscores how the sabotage of pipelines and the electricity grid has throttled the flow of oil for export and into domestic refineries.
As late as last month, the United States-led civil authorities in Baghdad and the Iraqi oil ministry said that about $1.1 billion would be needed to make crucial repairs to the oil industry by March 2004. A spokesman for the White House's Office of Management and Budget, Trent Duffy, said that the request for an additional $2.1 billion came from the office of L. Paul Bremer III, the head of the civil administration in Iraq. The sum is part of a supplemental $87 billion budget the Bush administration is preparing to seek from Congress to support American troops in Iraq and to finance the country's reconstruction.
In a letter sent yesterday to the Office of Management and Budget, two Democratic congressmen, Henry A. Waxman of California and John D. Dingell of Michigan, called the request "a radical departure from the administration's prior estimates of the costs of oil field reconstruction." They added, "Moreover, it was apparently developed without consultation with the Army Corps of Engineers, the agency overseeing the oil field reconstruction."
A spokesman for the Corps of Engineers said that it had not been contacted by the administration to develop the new estimate, but it remains unclear whether Mr. Bremer's administration spoke to the Corps of Engineers staff in Iraq. The congressmen have asked the budget office for a detailed explanation of how the estimate was derived and a list of the projects involved.
Mr. Duffy said that the administration had not yet formally asked Congress for the $87 billion, and when it did some time in the next few weeks, it would provide the explanations sought by the congressmen.
The request for the additional money has highlighted how hard it has been for the occupying powers to halt the sabotage that chips away at the oil sector and limits its output. During the war, the administration, its British allies and many oil traders were convinced that Iraqi oil production would quickly resume and jump back to levels before the war.
Instead, saboteurs have repeatedly blown up crucial pipelines that export oil from the Kirkuk fields in the north to the Turkish Mediterranean port of Ceyhan, choking off the second of Iraq's two export routes. And repeated sabotage of the electricity grid periodically brings oil operations to a standstill.
As a result, Iraq exported only about 800,000 barrels a day in August, less than half of the approximately two million barrels a day it exported before the war. Moreover, the Iraqi oil industry often cannot produce enough for the domestic market because of sabotage. When refineries, in particular, are shut by power failures, it takes them about a week to come back online, which limits the production of gasoline, cooking gas and other fuels.
Of the $2.1 billion the administration plans to request, a little more than half would go to "repairs and security because of increased sabotage," Mr. Duffy said. A little less than half would go to buying "petroleum products to ensure some reserve margin, so that the Iraqi people have a safe supply of oil if future disruptions of service occur," he said.
Iraq, which has the third-largest oil reserves in the world, after Saudi Arabia and Canada, has been importing petroleum products since late May.
The Corps of Engineers has also spent more on oil reconstruction than it originally envisioned, largely because of the sabotage, said Scott Saunders, a spokesman. In early summer, the corps estimated that it would need to spend about $650 million on repairs to the Iraqi oil industry. But as of early September, it had already spent $948 million as part of a continuing contract with Halliburton. Aspects of this increase were reported yesterday by The Wall Street Journal.
The Corps of Engineers has spent much of the money to make the same repairs repeatedly. For example, a ruptured pipeline that the Americans fixed was blown up two days later, Mr. Saunders said. The corps is also paying much more than early in the summer to import petroleum products from other Middle Eastern countries into Iraq. Earlier, the corps spent about $3 million to import gasoline and cooking gas. But it must now import diesel fuel and kerosene as well to prepare for the winter heating season until Iraq can produce enough on its own.
Given the spotty security of the oil industry, when that might occur remains unclear, and the Corps of Engineers declined to estimate how much more it would have to spend as repairs continue on Iraq's oil facilities.
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