According to this article it seems your State Department "Experts" weren't in the loop on the labs.

U.S. intelligence officials took issue Thursday with a published report that the State Department’s intelligence unit had challenged the CIA’s conclusion that mobile laboratories in trailers found in Iraq were intended for making biological weapons. The officials told NBC News that the authors of the memo that formed the basis of The New York Times report were “uninformed.”

RESPONDING TO THE report, in Thursday’s editions of the Times, the officials confirmed that the internal State Department memo dated June 2 warned that it was “premature,” to conclude that the mobile trailers were biological labs.

But the intelligence officials, who spoke with NBC News on condition of anonymity, said the memo, which was only two paragraphs in length, was drafted by “uninformed” State Department experts who did not have access to intelligence available to the CIA and the Defense Intelligence Agency.

The officials also said the memo did not offer an alternative explanation as to the use for which the mobile labs were intended and noted that several days after the memo was circulated, Secretary of State Colin Powell said publicly that the trailers were apparently part of Iraq’s biological weapons program.

The Times quoted U.S. government officials as saying the classified memo from the State Department’s Bureau of Intelligence and Research stated that it was too early to decide the trailers were proof Iraq had a program for making biological weapons.

As for the labs being hydrogen gas plants, sure, everyone knows you need to hide hydrogen plants to keep them from being discovered. Yeah, right.