Energy

US Squandered Millions Helping Afghanis Extract Oil, Gas

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Much of the $488 million the U.S. spent helping Afghanistan extract oil, gas and minerals to sustain its economy went to waste, according to a new report from the Special Inspector General for Afghanistan Reconstruction (SIGAR).

The Department of Defense’s (DOD) Task Force for Business Stability Operations (TFBSO) and the U.S. Agency for International Development (USAID) have funneled hundreds of millions of dollars since 2009 into helping Afghanistan extract and develop the more than $1 trillion worth of minerals, oil and natural gas the U.S. government estimates is beneath the country’s surface. But TFBSO and USAID have produced “mixed results” at best, the IG found.

SIGAR found three of the DOD task force’s 11 natural resource extraction projects worth $215 million total showed “little to no achievement of their objectives,” while five projects partially met their goals, leaving the DOD with “nearly all of its extractive projects incomplete.” The DOD task force spent another $122 million on seismic surveys, hydrocarbon, landmine removal and natural gas pipeline projects, with only “partially achieved results.”

A culture of corruption in Afghanistan and poor infrastructure aren’t helping the situation, the report noted. Afghanis are operating far more mines illegally than legally, and the nation’s road and rail networks “remain generally inadequate to support the needs of its mining industry.”

“According to non-governmental organizations monitoring the growth of Afghanistan’s extractive industries, if the rampant corruption and disregard for government oversight in the artisanal mining sector continues, there is a risk that will cause Afghanistan’s security situation to further deteriorate,” the IG said.

When the DOD task force spent $7.8 million to provide security and basic development for villages, the first project for processing the mineral chromite was taken by an Afghan local police commander, violating Afghanistan law. “Challenges in dealing with the Afghan government” hampered two other USAID projects from succeeding, the IG found.

The Afghan government also lacks the funding needed to continue projects where the U.S. and other countries leave off. The Afghan authority in charge of overseeing the petroleum and natural gas industries laid off half its staff in December 2014 after international funds subsidizing salaries for every person at the authority expired.

The DOD didn’t respond directly to any of SIGAR’s findings, saying it “remains committed to accommodating SIGAR” in its investigations. USAID agreed with SIGAR that it should focus on making sure the Afghan government can handle the oversight of natural resources.

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