Iraq Far From U.S. Goals for Energy

The United States spent millions of dollars on 35 turbines built to run on natural gas, replacing older thermal units that burned heavy fuel oil. Turbines are used to help generate electricity. Natural gas is cleaner and the gas-powered were easier to get and could be installed faster.

But while natural gas is an abundant by-product of Iraqi oil drilling, very little of it is captured. Instead, at Iraq's 52 gas-oil separation plants, the valuable gas is treated as a waste product -- ignited and allowed to burn off.

"The Americans came in and looked at their 1970s power plants and said, 'Throw it all out. Let's start over,' " said Joseph A. Christoff, director of the GAO's international affairs and trade teams who spent time recently with a group of two-dozen Iraqi engineers who talked about their experiences. "The Iraqi engineers were just shocked. . . . They felt they had no input in dealing with the electricity problems."

With little access to natural gas, Iraqis turned to running some of the newly installed gas turbines on diesel, crude or heavy fuel, causing them to break down faster and need more maintenance.

"It's like putting regular gas in a car that needs high-test," said Walsh, the commanding general for the Army Corps. "It's still going to run, but not as efficiently."

These days, inspectors say, 16 of the gas turbines the United States put in are running on crude oil or diesel, which could reduce their output by half. At the Qudas power plant, four of the eight gas turbines are down because they haven't been well-maintained and there's a lack of fuel to run them.

The electricity minister said he is developing a long-term plan to improve the electricity situation -- the first time in 30 years there has been any strategic planning for the sector. Wahid said the Planning Ministry has agreed to spend $40 million a year over the next four years to increase the electricity generated at major power plants, including crucial ones in the northern town of Baiji and Baghdad's Dora district -- where the United States has already spent millions.

But U.S. officials say there needs to be more coordination between the electricity and oil ministries and that the oil ministry lacks clear plans. Without a long-term program for turning around the oil industry and legislation that determines how Iraq's oil revenue would be divided, overseas companies won't invest in Iraq, and that could cost it substantial investment dollars.

"We've tried to help them, but we didn't," said Robert E. Ebel, energy expert and senior adviser at the Washington-based Center for Strategic and International Studies. "We thought they'd quickly take over and get production back up, but it hasn't happened."