This is an excerpt from EERE Network News, a weekly electronic newsletter.

November 13, 2002

EIA Updates Energy Analyses for Iraq and Afghanistan

DOE's Energy Information Administration (EIA) demonstrated interesting timing when it updated its "Country Analysis Briefs" for both Iraq and Afghanistan in October. The EIA briefs examine the general situation in each country and then focus in on its energy picture. For war-torn Afghanistan, currently trying to rebuild its infrastructure under a transitional administration, the EIA notes that the "hurdles to recovery" are high. Still, the country has some valuable energy assets, including up to 5 trillion cubic feet of natural gas reserves. Thirty-one natural gas wells that formerly supplied the Soviet Union remain shut today. The country also holds about 95 million barrels in oil reserves, and is considered a potential route for carrying oil and natural gas from the Caspian Basin to the Indian Ocean. See the Afghanistan Fact Sheet on the EIA Web site.

The Afghanistan figures pale in comparison to those for Iraq, which holds 110 trillion cubic feet of natural gas and more than 112 billion barrels of proven oil reserves—the world's second largest oil reserves. Iraq has been allowed to export some of its oil under an "Oil for Food" program, monitored by the United Nations. Under that program, Iraq exports officially averaged 2 million barrels per day in 2001, but dropped considerably in 2002. However, the EIA reports that Iraq is apparently smuggling up to 400,000 barrels per day through various routes, possibly generating as much as $2 billion per year through illegal channels. See the Iraq Fact Sheet.

Despite the growing threat of war against Iraq, oil prices are holding steady in the United States. According to the EIA, the markets are now waiting to see Iraq's response to the recent U.N. Security Council resolution. Meanwhile, the U.S. Strategic Petroleum Reserve now contains 590 million barrels of oil, and OPEC nations hold about 4.9 million barrels per day of excess production capacity that could be brought on line if needed. See the EIA Energy Situation Analysis Report.