What is the real cost?

Yesterday's NY Times talked about the attempt to restore oil pipelines in Iraq. It is not a pleasant story.

The contractor and the Army Corps of Engineers ignored warnings from geologists that the project should not begin until significant testing of the area had been done as they were concerned about "past tectonic activities near the site", which meant that the area was unstable and perhaps a fault zone. Special techniques would need to be used.

These warnings were ignored and no special techniques were used. The project was not completed although $75,700,000 was spent. A second attempt at $66,000,000, using techniques initially recommended, has been declared "essentially a completed project" by the Army. Yet, oil is still not flowing there.

Okay, you might say, we wasted $75 million. But, you ignore the fact that we're talking about oil here and the project was started in 2003. The oil was going to fund Iraq's reconstruction. Need I remind you that just about zero petrodollars have been available to fund the reconstruction. Would things have turned out differently if this and similar projects had succeeded? Would Iraq be such a disaster today?

Here are some observations from the Special Inspector General for Iraq Reconstruction:

• The geological complexities that caused the project to fail were not only foreseeable but predicted.
• The money lost from crude oil exports was as much as $5,000,000 a day
• The company restricted subcontractor communications by requiring all communications be addressed to them.

KBR, a unit of Halliburton, was the contractor.