When you read this L.A. Times story, think about possible ramifications in an area near you::

[Excerpt]

By T. Christian Miller, Times Staff Writer

QARMAT ALI, Iraq — The failure to rebuild key components of Iraq's
petroleum industry has impeded oil production and may have permanently
damaged the largest of the country's vast oil fields, American and
Iraqi experts say.

The deficiencies have deprived Iraq of hundreds of millions of dollars
in potential revenue needed for national rebuilding efforts and kept
millions of barrels of oil off the world market at a time of growing
demand.

Engineering mistakes, poor leadership and shifting
priorities have delayed or led to the cancellation of several projects
critical to restoring Iraq's oil industry, according to interviews with
more than two dozen current and former U.S. and Iraqi officials and
industry experts.

The troubles have been compounded in some cases by security issues,
poor maintenance and disputes between the U.S. and its main contractor,
Houston-based KBR, a subsidiary of Halliburton Corp., according to the
interviews and documents.

Despite the United States' spending
more than $1.3 billion, oil production remains below the estimated
prewar level of 2.5 million barrels per day and well below a December
2004 goal of up to 3 million barrels per day.

Interviews and
documents from whistle-blowers show problems with at least three
projects deemed crucial to Iraq's oil production:

•  Qarmat Ali
water treatment plant. This massive pumping complex is needed to inject
water into Iraq's southern oil fields to aid in oil extraction. Under a
no-bid contract, KBR was instructed to repair the complex at a cost of
up to $225 million, but not the leaky pipelines carrying water to the
fields. As a result, the water cannot be delivered reliably, raising
concerns that some of Iraq's oil may not be recoverable.

•  Al
Fathah pipelines. As part of the same no-bid contract, the U.S. gave
KBR a job worth up to $70 million to rebuild a pipeline network in
northern Iraq despite concerns that the project was unsound. In the
end, KBR built fewer than half the pipelines, and the project was given
to another contractor. The delay has aggravated oil transport problems,
which have forced Iraq to inject millions of barrels of oil back into
the ground, a harmful practice for the oil fields and the environment.
A government audit is being conducted based on a complaint by a
whistle-blower.

•  Southern oil well repairs. A $37-million
project to boost production at dozens of Iraqi oil wells was canceled
after KBR refused to proceed without a U.S. guarantee to protect it
from possible lawsuits.

It is striking that although the
reconstruction of the northern oil infrastructure has been hampered by
security issues, the southern oil fields — which account for most
production — have been attacked only a few times since the conflict in
Iraq began but still face serious problems.

After the 2003
invasion, U.S. officials and KBR moved swiftly, resuming oil production
only a month after the war began and slowly increasing output. But
after matching the prewar peak of 2.5 million barrels a day in
September 2004, production declined to about 2.2 million barrels daily
last month.

If the U.S. had successfully completed the planned
repairs, Iraq could be producing up to 500,000 additional barrels a
day, according to some estimates.

The difference would add up
to more than $8 billion a year — money that the Iraqi government could
use for new schools and hospitals, to supplant U.S. reconstruction
spending and improve the Iraqi security forces that Washington hopes
will replace American troops.

U.S. reconstruction officials
acknowledged the delays but said the efforts had turned a corner and
that despite the contract disputes, they were satisfied with KBR's
performance. The company avoided a possible cancellation of its
contract this year after addressing problems associated with cost
estimates. The U.S. also has brought in an Australian-American firm to
finish several projects started by KBR that had been delayed (Full version here)

If the hearsay about the railway is "on track" we may see local versions of stories like these.