updated 2:51 p.m. ET Aug. 17, 2007

WASHINGTON - The State Department expects half of all Americans will have passports or an equivalent in four years — a huge boost caused by post-9/11 security rules that swamped government offices this summer and infuriated would-be travelers.

Prior to the new security laws passed by Congress, about one in five U.S. citizens had passports. This year, the figure is already approaching one in four, and should be one in two in four years, said Ann Barrett, the director of passport services.

"The norms are out the window," said Barrett.

The agency has been harshly criticized for massive delays in processing passports as a result of the surge in applications.

The fallout from the backlog continued this week, when officials estimated it would cost nearly $1 billion over the next three years to handle the demand, and said they would no longer guarantee a three-day in-house processing time for pricier, expedited passport service.

Barrett said she did not know how many people had applied for refunds on their expedited passport service, nor how much money the agency has paid out in refunds as a result of the mess.

To handle such expedited requests, the State Department is giving itself more time _ 10 days of internal processing as opposed to the previous standard of three days.

Under the old system, if an expedited passport spent more than three days in internal processing, the applicant would be eligible for a refund of the extra $60 fee. There is no refund for a regular passport application that was delayed.

The longer wait time for the pricier, faster service is just one of many changes being made to adjust to the higher level of demand.

The agency is bulking up to tackle the mountain of paperwork, planning to hire 800 new workers, which Barrett said will roughly double the passport staff.

The government is now producing half a million passports a week. It made 12 million passports last year; this year, it will make 18 million, and over the next four years it expects to make 100 million.

FACT FILE Passport rule changes What travelers need to know about new regulations

By then, Barrett said, she expects 50 percent of Americans will have a passport or a new equivalent called a passcard that has yet to be created, a huge increase from the roughly 20 percent that had been the national norm. Officials say many of the new applicants are not planning on traveling abroad, but just want the more secure form of identification.

"We're sort of morphing into a different customer base," Barrett said.

After new travel rules went into affect this year, regular passport applications that typically took six weeks to deliver to the applicant were delayed by as much as 12 weeks or more.

Currently, the wait is estimated at 10 to 12 weeks; it is three weeks for the more costly, expedited passports. The State Department predicts that in September the wait time for regular passport applications will be cut to about eight weeks.

Christopher Elliott on customer service Stop the slide Fed up with shoddy service? Here are five ways to fix it

But Barrett said she could not estimate the price of all the extra staffing, travel, and lodging to handle the surge in applications, either for this year or next year when the next wave of travel rules is expected to produce an even greater demand for passports.

The increased demand results from rules that went into effect in January requiring U.S. travelers to carry passports when flying to Canada, Mexico and the Caribbean. A similar requirement is to go into effect for all land and sea crossings next year.

As the backlog grew worse, the Homeland Security Department eased or delayed its requirements, and the State Department was forced to take drastic and expensive measures, including the hiring of hundreds of additional staff and paying some employees to return to the U.S. from overseas to handle the paperwork.

Don't miss this on MSNBC.com The eight biggest Olympic marketing debacles You, too, can train like an Olympian Do you believe in Olympic spoilers? Yes! Cosmic Log: Is this your jetpack? Travel etiquette: Don't offend the locals

MORE FROM NEWS

News Section Front

Survey: Public divided on in-flight cell use   American Airlines ups miles needed for free trip Airlines improved on-time performance in June JetBlue readies new post-9/11 terminal at JFK U.S. to auction Newark airport slot next month Jet evacuated after emergency landing at LAX Need some in-flight shut-eye? It'll cost you ... Delta to offer Wi-Fi on domestic flights American jet cuts flight short after engine fails 2 planes clip each other at Manchester Airport News Section Front   Add News headlines to your news reader: