U.S. military in Iraq feels gouge of fuel costs

Rep. Roscoe Bartlett, R-Md., also a member of the Armed Services Committee and a vocal advocate pushing the military to pursue alternative energy solutions, said he doubts such talks would be fruitful anyway because of the impression by many in the Middle East that the U.S. invaded Iraq for its oil to begin with.

"I'm not sure they're as convinced we're fighting for them, as they were in the first Gulf war," Bartlett said.

He said he hopes instead that the war will spur military development of hybrid technologies and alternative fuels at a time when private companies are lacking the financial incentive. So far, the price of oil hasn't restricted combat operations, but it has inspired the military to hunt for new ways to conserve energy.

Development of more energy-efficient equipment will take time. Former CIA Director James Woolsey, who co-chaired a policy panel on the Pentagon energy study, said operations in Iraq and elsewhere are forcing the military to take the burden of fuel costs more seriously.

"The combination of $100-a-barrel oil and the terrorist situation and the dependence on the Middle East are really, I think, waking them up very fast," he said.

In the meantime, other lawmakers say they want to see the high costs of the war defrayed by Iraq dipping into its own oil revenues, which are projected to be substantial. Independent auditors estimate that Iraq is headed this year toward a massive surplus because of as much as $60 billion in oil revenues — a consequence of increased production paired with the sharp rise in prices.

"It's totally unacceptable to me that we are spending tens of billions of dollars on rebuilding Iraq while they are putting tens of billions of dollars in banks around the world from oil revenues," said Sen. Carl Levin, D-Mich., chairman of the Armed Services Committee. "It doesn't compute as far as I'm concerned."

Administration and military officials say Baghdad hasn't been able to spend its oil revenues so far because the newly formed government is still learning how to manage its revenues. They say Iraq's lack of spending isn't due to corruption or laziness, but rather Baghdad's inability to determine where its money is needed most and how to allocate it efficiently.

The Iraqis have a "genuine mechanical problem in drawing up national budgets (and) executing those budgets, particularly when it comes to capital infrastructure," said David Satterfield, the State Department's senior adviser on Iraq. But, he added, the government is improving with time and should be able to do more in the months to come.

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