The US failure to provide basic security for Iraqis in the years since the invasion has created a fuel shortage in the country that sits atop the world’s second-largest supply of oil.

Continuing attacks the oil industry infrastructure have made it nearly impossible to repair equipment that was already antiquated prior to the invasion and was further debilitated by the looting that followed the fall of Baghdad. Now, reports the Los Angeles Times, the country’s new government is preparing to inaugurate a fuel rationing regime.

Oil industry experts said several factors were behind the fuel predicament.

First, Iraq’s refining capacity was badly damaged by looting after the U.S.-led March 2003 invasion, and American and Iraqi reconstruction efforts have failed to restore the installations to full capacity. The Oil Ministry announced plans Monday to build two major refineries at a cost of up to $1.4 billion.

Iraq’s internal fuel production system was weakened as demand soared. Iraqis went on a car-buying spree after the invasion, almost doubling the number of vehicles on the road to 2.1 million, according to the government.

Demand was further increased by the electricity crisis. With electric power in short supply, many Iraqis purchased small generators that used diesel fuel. At the same time, the government increased its own fuel consumption to boost electrical production. This summer alone, the Iraqi government has committed itself to spending $150 million on diesel fuel.

Finally, Iraqi gas sells at dirt-cheap prices, as little as 5 cents a gallon. That has encouraged a thriving smuggling business, with contraband shipped to neighboring countries where gas prices are higher. Bahr Uloum, the oil minister, said his agency was working with police to arrest as many smugglers as possible.

The scarcity of fuel and electricity — despite the ever more infrequent “good news” bulletins coming from US authorities, some Baghdad neighborhoods now go days at a time with no power in 155-degree heat — and the failure to rebuild the infrastructures for either source of power, highlight another missing commodity: the $8 billion or so dollars in Iraqi oil funds that were intended to rebuild the country but instead vanished during the reign of Paul Bremer’s Coalition Provisional Authority. Audits of the CPA indicate that vast sums are completely unaccounted for and that much of the money that can be tracked was spent on projects that were nonexistent or executed at enormously inflated prices.

In all, the CPA spent close to $20 billion of Iraq’s oil money, with results that can be seen, or not seen, every day. And in fact there may be more strayed money than that: the London Review of Books story linked above — and it’s a sad commentary that some of the best reporting on Iraq has come not from newspapers or television news, but from the LRB and, more often, the New York Review of Books — notes that Iraqi oil exports went unmetered during much of the CPA’s rule, ensuring that no one would later be able to ascertain how much oil was sold, how much money that oil brought in and where that money went.

It’s a fair bet that at least some of the missing money is buying arms, supplies and information for the insurgents, and perhaps more of it is funding the various Iraqi political parties and militias running the country now; corruption didn’t end when Bremer hot-footed it out of town. But there’s no doubt whatsoever that the US invaded Iraq, killed tens of thousands of civilians (at least), helped loot the treasury and created the conditions that have led the country to the point of imposing gas rationing on the people whose money we took to spend on projects that would have obviated any need for rationing.

It is, as the ebullient Don Rumsfeld once said, a catastrophic success. And now that we’ve served the Iraqi people so well, we’re getting ready to bail on them — at least until the 2006 US mid-term elections are over.

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