The Iraq War, Oil Industry War Profiteering, and High Gas Prices

Greg Palast, in his article of several weeks ago, discussed the 500-pound elephant that is still in the room: Driving the Surge in Gas Prices? The Bush-McCain surge in Iraq. Even the Democrats, who have called for a "windfall profits tax" (what Greg Palast says should be called a "war profiteering tax"), seem to talk mostly about the increased demand for oil (mainly in China) as the dominant factor in the recent increase in world oil prices, and the resulting increase in gas prices at the pump.

But a huge factor over the past five years has been on the supply side as well, and the decrease in the supply in Iraq in particular. It was not until the end of 2007 that oil production in Iraq had finally returned to its early 2003, pre-war level. During the past five years, production from Iraq has been way, way down, and world prices have gone up, up, up. Had supply from Iraq been higher, prices would not have risen as fast.

Remember, the Bush neocon Wolfowitz told us that after we invaded Iraq, we would be able to pump enough oil in Iraq essentially to pay for the war and for reconstruction? Well, of course that didn't happen. That was just one of the many big lies of the Bush administration. Instead, we have been paying in many sad, painful ways for this war, and future generations in this country will pay most of the financial costs of this terrible war.

Meanwhile, Big Oil (which, together with the neocons, brought us into this war) has made out like bandits, as relative supply and demand have continued to bring oil prices up and up and up. Then of course there are the other big corporations, such as Blackwater, Halliburton/KBR, CACI and Titan, that are making a more direct killing onsite in Iraq; for dirty details on this direct war profiteering, see Robert Greenwald's documentary Iraq for Sale: The War Profiteers.

It is apparent from the right side of the chart above, from the zfacts.com site created by economist Steve Stoft, that there has been a dramatic increase in gas prices from 2003 to date, precisely the long years of the most recent Iraq War. Yes, China has been booming during that period, and worldwide demand for oil has increased. But supply from Iraq, which is home to the world's second largest proven oil reserves and is still controlled in fact by the United States, has been way down because of the war we started there and which we are still conducting there.

I wonder if the Democrats refuse to make this obvious connection - to talk about the elephant in the room - for fear of how it will sell politically. I do want Obama to be elected. I support him, and I assume he has great advice as to what he should say and shouldn't say. But his silence on this issue makes me wonder if our whole nation is still unable to accept the depressing realities of Big Oil, the war, and windfall profits, or "war profiteering." More likely there is a more depressing reason for the silence: the Democratic Party still lacks the courage to challenge the war industry and Big Oil. One thing is for sure, however: the Republican Party, and McCain, have completely sold out to Big Oil, and the war establishment, just like the Bush Family has done long ago. We have no choice but to go with a Democratic President if we want to have any hope of ever ending the madness.

EXCERPT FROM GREG PALAST'S ARTICLE:
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In 2002, after Bush Junior took power, the top ten oil companies took in a nice $31 billion in profits. But then, a miracle fell from the sky. Or, more precisely, the 101st Airborne landed. Bush declared, “Bring’m on!” and, as the dogs of war chewed up the world’s second largest source of oil, crude doubled in two years to an astonishing $40 a barrel and those same oil companies saw their profits triple to $87 billion.

In response, Senators Obama and Clinton propose something wrongly called a “windfall” profits tax on oil. But oil industry profits didn’t blow in on a breeze. It is war, not wind, that fills their coffers. The beastly leap in prices is nothing but war profiteering, hiking prices to take cruel advantage of oil fields shut by bullets and blood.

I wish to hell the Democrats would call their plan what it is: A war profiteering tax. War is profitable business – if you’re an oil man. But somehow, the public pays the price, at the pump and at the funerals, and the oil companies reap the benefits.

Indeed, the recent engorgement in oil prices and profits goes right back to the Bush-McCain “surge.” The Iraq government attack on a Basra militia was really nothing more than Baghdad’s leaping into a gang war over control of Iraq’s Southern oil fields and oil-loading docks. Moqtada al-Sadr’s gangsters and the government-sponsored greedsters of SCIRI (the Supreme Council For Islamic Revolution In Iraq) are battling over an estimated $5 billion a year in oil shipment kickbacks, theft and protection fees.

The Wall Street Journal reported that the surge-backed civil warring has cut Iraq’s exports by up to a million barrels a day. And that translates to slashing OPEC excess crude capacity by nearly half.

Result: ka-BOOM in oil prices and ka-ZOOM in oil profits. For 2007, Exxon recorded the highest annual profit, $40.6 billion, of any enterprise since the building of the pyramids. And that was BEFORE the war surge and price surge to over $100 a barrel.

It’s been a good war for Exxon and friends. Since George Bush began to beat the war-drum for an invasion of Iraq, the value of Exxon’s reserves has risen – are you ready for this? – by $2 trillion.

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