What Happened to Iraq’s Oil?

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Vice President Dick Cheney believes that Saudi Arabia “kept their word” when they promised three years ago to substantially boost oil production, investing $90 billion in the process. From a capacity of 10.5 million barrels a day in 2005, they will hit 12.5 million barrels by 2009, reports the Wall Street Journal. At $100-plus per Saudi barrel vs. $50 or less five years ago – not a bad bargain.

And Cheney also suggested in Baghdad last week that lack of surplus oil-producing and refining capacity around the world means there is little prospect of short-term relief on the supply side.

But, wait a minute, doesn’t everybody know that Iraq is sitting on an ocean of oil -- an estimated 115 billion barrels of oil. And aren’t most Americans assuming that the Iraqi oil the U.S. military came to protect five years and 4,000 GIs killed ago is being used to “win” the Iraq conflict.

Wrong. We are being played for fools by those we are defending.

The Iraqis are pumping and selling 2.4 million barrels of oil a day, the highest level since the U.S. invasion in March 2003. But the U.S. isn’t getting a drop of that oil or a dollar.

On the contrary, according to Robert Bryce, Managing Editor of Energy Tribune magazine and author of the newly published book Gusher of Lies, the U.S. is importing just over 3 million gallons of fuel into Iraq every day from Kuwait, Turkey and as far away as Greece. This is an average of 20.5 gallons of fuel per GI per day, more than twice the daily volume used by U.S. soldiers in Iraq in 2004.

Chief among the lies told by U.S. officials to “sell” the U.S. invasion in March 2003 was then-Deputy Secretary of Defense Paul Wolfowitz’s claim to Congress that “…we are dealing with a country that can really finance its own reconstruction and relatively soon.”

Like so many neocon pipedreams, that one never materialized. Energy expert Bryce, writing in The American Conservative cites a November 2006 study by the U.S. Military Academy showing that it costs $42 to deliver one gallon of fuel to each GI – and that doesn’t include the cost of the fuel itself! All told, each of the 157,000 U.S. soldiers in Iraq is costing $840 per day in fuel delivery costs or $923 million per week on fuel-related logistics alone.

The entire war effort in Iraq is now costing about $2.5 billion per week, so fuel costs alone currently account for one-third of the cost of the war. Fuel costs are soaring because only the heaviest steel armor offers GIs protection against roadside explosives.

After wasting billions on electronic countermeasures, the Pentagon went back to old-fashioned steel to protect troops. An armored Humvee covers perhaps 8 miles on a gallon of JP-8 military jet fuel used for aircraft and vehicles. Some 5,500 fuel-hauling tanker trucks are engaged in the fuel-hauling effort, each a potential target for insurgents.

And speaking of the Iraqis financing their own reconstruction, nobody in Washington seems to know where the Iraqis are selling their oil and what they’re doing with the money. Now two senior members of the Senate Armed Services Committee – Senator Carl Levin (D-MI) and Senator John Warner, (R-VA) – have requested a full accounting of how Iraq is spending its soaring oil revenue, asking “why has the Iraqi government not spent more of its oil revenue on reconstruction, economic development and providing essential services for the Iraqi people?” reports the New York Times. I think the Senators should seek criminal indictments based on their investigation.

The first, swiftly victorious 1991-2 Iraq and Gulf war showed U.S. military prowess to the world. The current Iraq war, 2003-8 – costly and indecisive -- shows the U.S. blindly bankrupting itself while rivals China and Russia make new geostrategic oil deals.

Our involvement in Iraq continues to be a blood-soaked farce and a many-sided tragedy – a study in stupidity, humiliation and disgrace.

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