War for Oil?

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Production
Following Iraq's invasion of Kuwait and the embargo on Iraqi oil exports, Iraqi oil production fell to around 300,000 barrels per day (bbl/d) (from 3.5 million bbl/d in July 1990). For the first 11 months of 2002, Iraqi crude oil production averaged 2.02 million bbl/d (A.), down from about 2.45 million bbl/d in 2001 (and 2.69 million bbl/d in 2000). Oil industry experts generally assess Iraq's sustainable production capacity at no higher than about 2.8-2.9 million bbl/d, with net export potential of around 2.3-2.5 million bbl/d(B.) (including smuggled oil). In comparison, Iraq produced 3.5 million bbl/d in July 1990.

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http://www.eia.doe.gov/emeu/cabs/iraq.html

Okay. Currently, the crude oil price per barrel is $35.38. That's unusually high, because of the war.

Iraq is producing 2 million barrels of oil per day (see A.). That's about $70 million worth of oil each day (at current prices).

Say that Iraq is then able to get is production up to that 2.5 million barrel a day figure (B.) - $90 million worth.

Right now, because the US is building up oil reserves, we're purchasing 0.5 million barrels of oil a day from Iraq under the oil-for-food program (http://www.observer.co.uk/internatio...882512,00.html) - about $17.5 million worth, each day.

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Now, we'll fast forward a bit. America liberated Iraq. We've won. Now, suppose Tommy Franks has rolled in, we've set up a US Government in Iraq, we've taken control of Iraq's entire oil reserve - France's worst nightmares have come true, the US is ruling Iraq as a colony. All of Iraq's oil profits are going straight to US pockets. We're going to pretend that oil prices stay freakishly high.

I think $20 is an honest profit estimate per barrel (at $35/day prices). (post expenses, post taxation, post putting the profits into Halliburton and Cheney's pockets)

$20 x 2 million surplus barrels per day x 365 days in a year =

$14.6 billion a year in oil profit.

The US is going to war to get that $14.6 billion a year in oil profit. Many estimates have pegged the war cost at $100 billion to $120 billion.

That's a COST of $110 billion for yearly REVENUE of $14.6 billion - or a 13% return.

13%! You understand, right, that that's not that great. That's a 13% return on funds that we'll get if the US...

TURNS IRAQ INTO A COLONY WHERE ALL OIL PROFITS RETURN TO THE US

That's going to be fucking impossible, and we all know that. But, even in the most fanciful, out there-case, it still WOULD NOT BE A WAR FOR OIL.

If we go kill people does the price on gas go down? If so im all for it.

When I filled up yesterday mid grade gas cost me $1.90 a gallon. For Maryland, this is unheard of.

Once the war ends, the price should drop back down. The President could also be releasing oil from the reserves, although who knows when he'll actually start doing that. I guess once he sees how the early war efforts go.

Just to reiterate what I was saying above:

If we took the $120 billion we were going to spend on the war, and put it in a large company fund, it'd be worth about as much or just slightly less than the profits from Iraq's entire yearly sustainable oil production. The chances of us getting the profits from Iraq's entire yearly sustainable oil production are nonexistent. The war does not make strict "financial" sense (the argument is absurd), unless we want to start putting a dollar value on the lives of US citizens. Once we begin doing that, then it starts to seem like a wise investment.

Oil war: 23 years in the making

Analysts see attack this week or next
'We're just waiting on the president'

LINDA DIEBEL

WASHINGTON - Any day now, there will be bombs falling on Baghdad. Conventional bombs like nothing the world has ever seen.

"The bombs will still be ringing in their ears when the 'Third Mech' shows up,'' says U.S. military analyst John Pike, of Iraq's Saddam Hussein and whatever's left of his so-called elite Republican Guard after the first days of aerial pulverization.

"The Third Mech will be driving down the main drag in Baghdad.'' Pike, director of GlobalSecurity.org, describes an assault on Saddam's regime that begins with "shock-and-awe'' aerial bombardment, and quickly moves into crush mode with the Third Infantry Division (Mechanized) rolling up from the Kuwaiti desert and U.S. Marines storming the port city of Basra.

"Chances are 90 per cent it will go pretty quickly, and 10 per cent it will turn into one big holy mess,'' predicts Pike.

But, before turning to the combat debut of bombs that weigh about 9,000 kilos and can take out an entire battalion, consider why the United States is going to war.

Consider who drew up U.S. goals and objectives in the Persian Gulf, when, and why. Consider oil.

This particular operation ? Pentagon working title: "OpPlan 10-03-Victor" ? has been on the drawing board for a year, according to defence officials. The immediate goal is disarming Iraq and getting rid of Saddam. It's expected to begin soon, this week or next. Hard to hold back more than 300,000 U.S. and British troops, in place and pumped to go.

But the long-term goal, say big-picture analysts, has been in the works for far more than the 23 years since former U.S. president Jimmy Carter linked American security ? "the vital interests of the United States'' ? to the Persian Gulf and its oil, and threatened military intervention.

This war, say analysts, is about power and oil. It's about control of the Gulf states by means of strategic Iraq and, by extension, a final post-Cold War shakeout to give the U.S. more economic clout over China and Russia by controlling the oil spigot.

This is the moment, Thomas Barnett, from the U.S. Naval War College, wrote recently in Esquire magazine, "when Washington takes real ownership of strategic security in the age of globalization.'' The Persian Gulf has the world's biggest oil reserves. After Saudi Arabia, Iraq has the second-largest proven reserves.

"The only precedent to what is shaping up now is the Roman Empire,'' says Michael Klare, professor of peace and world security studies at Hampshire College. "There is only one power. I don't think Britain, France or Spain even came close in other centuries to the United States today. "If the United States controls Persian Gulf oil fields, it will have a stranglehold on the world economy,'' adds Klare.

Washington is betting, Klare believes, that "controlling Gulf oil, combined with being a decade ahead of everybody else in military technology, will guarantee American supremacy for the next 50 to 100 years.''

These ideas aren't new.

For years, a small and powerful group, with corporate and political links, pushed the idea of controlling Persian Gulf oil. They did it publicly, at think-tanks and in the media. Now, this coterie of like-minded strategists controls both the Pentagon and the strategic aims of President George W. Bush's White House.

"You've got a team in the White House that is unafraid of world public opinion because they know it is unreliable, self-serving and hypocritical,'' says George Friedman, chair of the intelligence organization, Stratfor.

Originally, this was the "Kissinger plan,'' says James Akins, former U.S. ambassador to Saudi Arabia. He lost his state department job for publicly criticizing administration plans to control Arab oil back in 1975 when Henry Kissinger was secretary of state. "I thought they were crazy then and they're crazy now,'' Akins tells the Star, adding that Congress studied plans to control Persian Gulf oil and concluded the idea was absolute madness.

"I thought this whole thing was dead. But now you've got all these `neo-cons' in power, and here we go again,'' says Akins, a Washington-based consultant. "They figure once they take over Iraq, they don't have to worry about the Saudis.''

Akins adds: "These people with their imperial ideas see themselves as part of the Great American Empire."

The players have moved steadily through the Republican presidencies of Ronald Reagan and Bush's father, George H.W. Bush and Bush himself.

They include: Vice-president Richard Cheney, a former oilman, like Bush, and defence secretary during his father's Persian Gulf War in 1991; Defence Secretary Donald Rumsfeld, once Reagan's personal emissary to the Middle East when Saddam was a U.S. friend and staunch ally; Rumsfeld's deputy Paul Wolfowitz, who began publicly calling for war against Iraq after the 9/11 terror attacks; and Richard Perle, chair of the Pentagon's Defence Policy Board, nicknamed the "Prince of Darkness'' for his political stick-handling.

They are joined by think-tankers from organizations such as the Project for the New American Century, the Centre for Strategic and International Studies (CSIS) and the American Enterprise Institute. Bush recently chose an American Enterprise Institute forum, rather than the White House, to deliver a major prime-time speech to the American people to make the case for war.

Bush often mentions Iraqi oil, a jarring focus for a president on the brink of war.

"We will seek to protect Iraq's natural resources from sabotage from a dying regime and ensure they are used for the benefit of Iraq's own people,'' he said in last week's radio address.

Colin Robinson, an analyst with the Washington-based Centre for Defence Information, says: "The United States can stand well-accused of trying to dominate the whole region for its oil. But conspiracy theories are usually too complicated for everybody to carry them off." Friedman says the 1991 war left unfinished business, the "status quo'' of Saddam in power. Not so this time, he says, in a war which, as U.N. diplomats dither, has already begun.

In recent weeks, British and U.S. warplanes strayed outside "no-fly'' zones to bomb Iraqi surface-to-air missiles. Robinson describes these zones, set up by the U.S. and Britain after Desert Storm as "barely legal'' in terms of international law. As well, U.N. officials report violations of the demilitarized zone between Iraq and Kuwait by U.S. soldiers. But the real devastation should begin within days.

"We've got everything we need. We're just waiting on the word, the decision from the president," Maj.-Gen. Buford Blount, commander of the 3rd Infantry Division, told the Washington Post last week from Kuwait. First comes aerial bombardment, an extraordinary 1,500 bombs every 24 hours during the time it takes heavy mechanized divisions to move up from Kuwait to Baghdad.

Big heavy bombers, from Diego Garcia in the Indian Ocean, buttressed by screaming navy and air force jets will pound Iraqi sites, picked by aerial drones and U.S. and British Special Forces already in Iraq

. Defence contractors are eager to test out new gadgetry. One new bomb is the 9,000-kilo MOAB (Massive Ordnance Air Burst). "Well, it's very efficient,'' says Friedman. "Let's say you've got a large concentration of Republican Guard units, instead of having to do repeated bombing sorties, you can take out a battalion (500 to 600 troops) with one bomb.''

Friedman's sources in theatre tell him there are "terrific fights between defence department officials and field commanders who are raring to go now.''

He says time is the enemy of troops in the field. Sandstorms at the end of March, for example, could play havoc with laser targeting systems. Without the anticipated "northern front'' through Turkey, there are plans for C-130s to ferry troops to northern Iraq, as well as missions for U.S. Marines and Special Forces to secure oil sites throughout Iraq. "

The U.S. military cannot be defeated on the conventional battlefield,'' says military analyst Pike.

But what about the variables?

How much of a threat is Saddam? What about chemical and biological weapons?

"We gonna find out,'' says Pike.

Meanwhile, Iraqi exiles, opposed to Saddam, have been meeting with U.S. and British oil executives, promising access and leases in return for political power.

And, the U.S., as Friedman points out, on the brink of world hegemony, is going to find out who its friends are.

"I do so enjoy Canadians (against the war) getting so obsessed with human rights, and then pay no attention to places like Venezuela,'' says Friedman, who thinks Venezuela's Hugo Chavez is next on Bush's military agenda.

"I read the Canadian press and I wonder what planet your country is on.

"We have allies, and we are going to see who they are,'' he concludes. "If France, if Canada, can't support us in opposition to Saddam Hussein, you can't say you are our allies. Canada consistently says it's an ally of the United States of America ... we'll see, won't we?''

(Toronto Star)

Ahahah. That article didn't say a single goddamned thing about why it's a "war for oil".

Evidently, it's a War for Oil because:

"This war, say analysts, is about power and oil."

"Jimmy Carter linked American security ? "the vital interests of the United States'' ? to the Persian Gulf and its oil, and threatened military intervention."

"Thomas Barnett, from the U.S. Naval War College, wrote recently in Esquire magazine, "when Washington takes real ownership of strategic security in the age of globalization.''"

""If the United States controls Persian Gulf oil fields, it will have a stranglehold on the world economy,'' adds Klare."

Because Bush's cabinet includes: "Vice-president Richard Cheney, a former oilman, like Bush, and defence secretary during his father's Persian Gulf War in 1991; Defence Secretary Donald Rumsfeld, once Reagan's personal emissary to the Middle East when Saddam was a U.S. friend and staunch ally; Rumsfeld's deputy Paul Wolfowitz, who began publicly calling for war against Iraq after the 9/11 terror attacks; and Richard Perle, chair of the Pentagon's Defence Policy Board, nicknamed the "Prince of Darkness'' for his political stick-handling."

And because "Iraqi exiles, opposed to Saddam, have been meeting with U.S. and British oil executives, promising access and leases in return for political power."


It's a war for oil...because they say so? Check my facts. You can debate the veracity of the DOE's report, you can debate the expense of the war, you can debate the likelihood of the US being able to completely colonize Iraq, you can debate the profit-per-barrel US could possibly make, and so on. This article says absolutely nothing. I'm not trying to dismiss you, I'm not trying to reroute your argument, or deflect criticism, or anything else like that. I'm simply saying that there isn't a word of informative fact in that article - it's an editorial full of quotes from people all unwilling to say WHY they think that it's a war for oil.

Yup, we liberated Kuwait and now we own that place.

What?!? We don't own it? My bad.

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Originally posted by Stone
Ahahah. That article didn't say a single goddamned thing about why it's a "war for oil".

Evidently, it's a War for Oil because:

"This war, say analysts, is about power and oil."

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Sorry man, sggg won this round. You can spin numbers any way you want, but if a guy from the US naval war college says it's about something, I'll take his analysis over yours.

And besides that, the point your analysis misses is that regardless of price, the US economy requires oil to keep moving. Currently, the world's 2nd largest supply of it is closed to America, and eventually that'll come home to roost. In addition, the key point of that whole article is that the next 100 years will bring a showdown with Russia and China, as the military and manufacturing gaps close further. Controlling (or greatly influencing) the Iraqi, Saudi and Venezuelan oil supplies will guarantee a US edge for as long as we depend on fossil fuels. Really, that would be the one good thing that could come of this. I'd much rather America were running the global show than the Russians or Chinese.

To be perfectly fair however, I think there certainly are other motivating factors, namely:

1) the big fear is a chemical terrorist attack in the US, and Iraq is a nation hostile to America who is producing chemical weapons.

2) Testing weapons is fun and profitable!

3) Saddam really is a jerk, and it would be political suicide to drop the embargo. The only other real option to continuing to starve the Iraqi populace is a regime change.

4) They tried to kill his dad!

It's not only about oil, just mostly.

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Originally posted by mattvanstone
Yup, we liberated Kuwait and now we own that place.

What?!? We don't own it? My bad.

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Bad example. There was no regime change in that instance.

Stone, your post just said it was about oil. You talk about numbers on oil revenue. If this isn't about oil then why do you speak about oil prices in relation to US involvement. I think your argument backfired on you. From your post, I get that this war is all about oil.

And killing people to lower gas prices is the most disgusting comment I've heard in this thread, maybe on the whole board.

SC

Well think about it SC:

How much does Blood cost? How much does Oil cost? I think blood cheaper than Oil these days so we're getting a hellava deal!

ºTracer

Tax payers pay for the war, Cheney, rumsfeld, Powell, Bush profit from the war and oil industry.
They profit straight on and in campaign contributions as well.
It doesnt matter for them how much this war costs tax payers, it matters for them how much it can fill the pockets of the elite surrounding them.

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Originally posted by spacecowboy
And killing people to lower gas prices is the most disgusting comment I've heard in this thread, maybe on the whole board.

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Good.

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Originally posted by Tracer
How much does Blood cost? How much does Oil cost? I think blood cheaper than Oil these days so we're getting a hellava deal!

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With Blood prices this low now is the time to invest.

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Originally posted by spacecowboy
Stone, your post just said it was about oil. You talk about numbers on oil revenue. If this isn't about oil then why do you speak about oil prices in relation to US involvement. I think your argument backfired on you. From your post, I get that this war is all about oil.

And killing people to lower gas prices is the most disgusting comment I've heard in this thread, maybe on the whole board.

SC

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Hm, hard topic, I guess I wasn't clear enough.

What I was trying to imply was that IF the war was about oil, then it'd be a really really bad investment. IF the war was about oil, and IF our goal was to own Iraq, then we'd be idiots - the war is just going to be too damn expensive to justify whatever potential reward.

It's NOT about oil, of course.

What I was trying to show was that the argument that Bush and Cheney are doing this for this oil doesn't make sense, because the money would be better spent somewhere else. Bush and Cheney could put more money into the pockets of the rich by giving a $120 billion tax cut and dealing with Saddam, than by spending $120 billion on a war and hoping to colonize Iraq. Okay?

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Originally posted by StriderKyo
Sorry man, sggg won this round. You can spin numbers any way you want, but if a guy from the US naval war college says it's about something, I'll take his analysis over yours.

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Well, that's fine, Strider, but you do admit that the article didn't actually ARGUE anything. It just contained a bunch of people SAYING they believed it was a war in Iraq, without backing it up.

If I were you, I wouldn't take any quote provided at face value until you either saw the source text (the actual text where the US naval war guy said that, the context of the statement), or saw some verifiable numbers to back it up.

If you want to say that you're unconvinced by either, that's fine - sggg provided baseless quotes, and I'm out of my league when it comes to providing that sort of analysis. But, to say that "SGGG won this round" indicates I would've been better off writing:

"The war can't possibly be about oil - the return on the cost of the war will never be high enough to justify attacking for the oil", said Sgt. R. Hacker, US Naval College. (a quote I'm sure I could find)

-than-

Giving a mathematical breakdown of the most-profitable, least-probable post-war economic situation in Iraq, based on fairly clear facts taken from 1.) a Department of Energy website and 2.) a Liberal British Newspaper.


I would really, really love to see someone try to provide an economic breakdown of the war that shows how it makes economic sense for Bush and Cheney to attack Iraq, even if they're only interested in benefitting a small cabal of Rich Americans. (I haven't seen one)

(Strider - The other reasons you gave for the US attacking hold more water, definitely. The "blood for oil" argument just bothers me because it's not grounded anywhere near reality.)

Stone, you're looking at it from a monetary point of view. From what I understood of his post, sggg was showing the political advantage to war. The US would kind of be like the Microsoft of the political world. Willing to take a financial hit for long-term political gain.

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Originally posted by Stone

I would really, really love to see someone try to provide an economic breakdown of the war that shows how it makes economic sense for Bush and Cheney to attack Iraq, even if they're only interested in benefitting a small cabal of Rich Americans. (I haven't seen one)

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Okay, look at it from this angle then - attack Iraq for 'justice', and let them have complete control over their oil reserves, and keep giving sweetheart deals to the Russians and Germans. Advantage to US: nothing. You've floated the entire cost of the war, thrown your economy trillions into deficit, lost a ton of political goodwill not to mention American lives, with nothing in particular to show for it other than reducing the threat of terrorist anthrax attack by 0.5%.

Or, attack Iraq and put in a government that is at first run by your military, then later exiled Iraqis who owe the US big favours. Like I said in my previous post, as uneconomical as you make it sound, not having any access to that oil at all is even more uneconomical. The less oil there is available to you, the more and more expensive it'll become over time. If the US controls (or has great influence) over that supply, you avoid that problem, as well as giving yourself a major political edge over the 21st century's budding super powers, not to mention a great bargaining chip to hold over the Saudi's heads. Advantage to US: far more.

Come on, man, aren't you in law school? You know how the game is played. I'm sure the republicans do think they're doing the world a favour, but politics and business are also opportunistic affairs. As leaders of your country, they have a duty to maintain its hegemony, otherwise they've failed the American people.

That article - which isn't from some wacked-out left wing source, it's from Canada's largest urban daily - has direct quotes from the very thinktanks the Bush cabinet is drawing from. You simply can't tell me they're unaware of the long-term strategic advantage of controlling a major oil reservoir, and what it means for America's future. The war may run at a loss in the short term, but the longterm economic stability that would result from it would more than offset the cost over time.

And besides that, the cost of the war isn't entirely a cost - much of the money you're spending is going to the industrial-military complex, which is esentially a military reinvestment to some degree. Remember what a great advertisement the Gulf War was for Patriot missiles?

Urm what about the points I made?
A war is payed for by the public in the form of taxes, loans and what have you not, costs to Haliburton for instance just a few million they invested in guys like Powell and Cheney, profits for halliburton billions in contracts for rebuilding the country(not even counting the actual oil).

Bush, Cheny, Powell, Halliburton, Boeing, Martin etcetera will profit greatly from war.
Screw the billions its gonna cost, those billions are not payed by them, the profits of selling missiles, airplanes, rebuilding, supplies etcetera however will line up their pockets quite nicely.