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40 comments on The Sierra Club is not happy

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mw on October 14, 2005 - 5:52pm

Without engaging in a debate over the political / geopolitical motives and correctness, US foreign policy is heavily infused with implied subsidies, exerted both via the military arm of governement as well as the political arm.

I once calculated the true cost of every bbl of crude coming out of the US-influenced middle east - my numbers were not very accurate nor scientific, but given that a goodly portion of the military budget is black and/or can't be easily broken down by region, I think my estimate at the time was light.

Crude had been trading near 40$ a barrel; my calculations implied a 26$/bbl surcharge would cover the military operations in the area.

My point is not to criticize or make value judgements; even if not a single drop of oil came out of the region there would still be military installations and investments in the area. But clearly there is a direct relationship between military spending in the region and the region's strategic value for every barrel of oil.

These costs are never talked about.

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Rick on October 17, 2005 - 12:11am

mw-nice way to think about it. Here's my rough cut today: US consumes 21mbpd, 12mbpd imported, 19% from Persian Gulf. Over the 30 month Iraq war, I get roughly 2 billion barrels imported from the Gulf. Costs for the war are estimated at $208 billion. If you attribute all war costs, and nothing else, as a subsidy for Persian Gulf oil, it's about $100 per barrel subsidy now.

So, we've actually got oil that costs way more than $105, we just didn't notice.

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40 comments on The Sierra Club is not happy

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