Thursday, May 10, 2018

Why Mathematically It Could Not Have Possibly Been "All About the Oil"

I rank the argument of "it's all about the oil" somewhere around "it's all about the corporations, maaaan" and "the rich get richer and the poor get poorer."  Very simple, easy explanations that explain complex, international economic and political phenomena for thoroughly dumb people who are too lazy to put much thought or effort into things.  However, even though the Iraq war is effectively over and we've nowhere near the military force we had in the Mid East ten years ago, my mind was jarred to do a little math whilst listening to a podcast about Germany's synthetic oil industry during WWII.  With the Allies cutting off Germany's access to the Baku and other oil regions, Germany was forced to produce oil synthetically which begat the question in Cappy's mind...

How much does it cost to create a synthetic barrel of oil?

This is an important question because the Iraq/Afghanistan war was not cheap.  $2.4 trillion as of 2017.  And so I asked "how much synthetic oil could we have produced with that money instead?" If it's all about the oil, synthetic or not, would it have been cheaper to just produce it at home...not to mention avoid all the death and destruction the war has cost both sides?

So the math goes like this:

The US imports 5.1 million barrels per day from the Mid East region.  Not Iraq (that's only .61 million barrels), not OPEC (that's only 3.4) the ENTIRE region is 5.1 million barrels per day.  The reason I took the entire region is you know these Neanderthal "It's All About the Oil" dopes are going to say "you know maaaaannn, it wasn't just about Iraq, but the entire region maaaaan."  

So fine, 5.1 million barrels per day it is.

This translates into 1.9 billion barrels per year, which when you apply the $95 per barrel it is estimated to cost to produce it synthetically, you're looking at an annual price tab for synthetic oil of $177 billion to replace Mid East oil.  This compares to the annual cost of the Iraq/Afghanistan war of $172 billion, so a profit of $5 billion per year, effectively a net wash (though I'd argue a $150 billion loss per year if you assume we were merely going after only Iraqi oil).

When you consider this it is painfully obvious we did not go to war in the Mid East (at any time) because "it was all about the oil maaaan."  There was no profit to be had in it, merely the unnecessarily cost of human lives, the destruction of military property, and the human/collateral damage Iraq and Afghanistan would face.  Additionally, if you believe in Keynesianism, even leftists would have to admit that that money would have been better spent/invested at home, creating jobs and an economic boom derived from a domestic synthetic oil industry.

Admittedly, I know this little back of napkin math exercise will prove largely pointless.  The knuckle-dragging, mouth breathers known as academic and professional activist leftists won't care because they need something to complain about (let alone I doubt they can understand the basic division and multiplication displayed above).  But if/when do run into these people again, just remind them of this the sad fact.  It should cut the argument short and hopefully get them to shut up about "blood for oil" and allow you to move on about your day.

19 comments:

kurt9 said...

This does not take into account the fracking revolution that has now made America not only energy independent, but actually an oil exporter. The U.S. ought to join OPEC.

Per Desteen said...

No, it was not about the oil.

With Europe then no longer at risk without the Soviet Union, why should there be such a massive military need? It's like Britain after WW2. No colonies, no military.

So a new Europe needed to be created. A new reason to fight. The middle east never disappoints. It's also wonderful for the transfer payments, and is the epitome of the "broken window". Keynesianism does work when you obliterate your opponent, saddle them with debt to rebuild, strip them of their natural resources, and then sell them their military equipment and consumer goods. Again, just like WW2.

Funny how history rhymes.

Anonymous said...

The war wasn't for oil, it was a massive money laundering operation where two trillion dollars of taxpayer money was funneled through politically connected defense contractors. Smedley Butler wrote all about it almost 100 years ago now when he wrote his famous esseay "war is a racket".

Tucanae Services said...

You could cut into that cost factor if you considered converting all public transport buses in metro sectors to use NatGas. Many cities already do. Local trucking might be another opportunity. Fracking for oil also releases NatGas that has driven down the cost per mcf.

A Texan said...

Every elected official who supported the Iraq war should be simply shot or thrown out of a helicopter. It would have been cheaper to bribe Saddam instead of losing thousands of American lives in addition to wasted money to the military/industrial complex. No weapons of mass destruction were found and any biological weapons were allowed to be sold to Saddam through a wink and a nod from Uncle Sam.

https://www.youtube.com/watch?v=r8YtF76s-yM

General Wesley Clark:
Because I had been through the Pentagon right after 9/11. About ten days after 9/11, I went through the Pentagon and I saw Secretary Rumsfeld and Deputy Secretary Wolfowitz. I went downstairs just to say hello to some of the people on the Joint Staff who used to work for me, and one of the generals called me in. He said, "Sir, you've got to come in and talk to me a second." I said, "Well, you're too busy." He said, "No, no." He says, "We've made the decision we're going to war with Iraq." This was on or about the 20th of September. I said, "We're going to war with Iraq? Why?" He said, "I don't know." He said, "I guess they don't know what else to do." So I said, "Well, did they find some information connecting Saddam to al-Qaeda?" He said, "No, no." He says, "There's nothing new that way. They just made the decision to go to war with Iraq." He said, "I guess it's like we don't know what to do about terrorists, but we've got a good military and we can take down governments." And he said, "I guess if the only tool you have is a hammer, every problem has to look like a nail."

So I came back to see him a few weeks later, and by that time we were bombing in Afghanistan. I said, "Are we still going to war with Iraq?" And he said, "Oh, it's worse than that." He reached over on his desk. He picked up a piece of paper. And he said, "I just got this down from upstairs" -- meaning the Secretary of Defense's office -- "today." And he said, "This is a memo that describes how we're going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran." I said, "Is it classified?" He said, "Yes, sir." I said, "Well, don't show it to me." And I saw him a year or so ago, and I said, "You remember that?" He said, "Sir, I didn't show you that memo! I didn't show it to you!"

Anonymous said...

Not sure I follow this logic, if you replace Middle East oil at $100 a barrel (the average since 2000) with synthetic oil at $95 a barrel, and do not have to pay for a war, then you should be well ahead by not doing the war.

Anonymous said...

You're assuming it was a straight cost exercise. It wasn't. It ws about control of the oil. Saddam, Gaddafi and Assad all made overtures of leaving the |American controlled oil system and starting new markets which were to operate on something other than the US dollar....Rubles. That's the kicker.

Un Americano said...

No, not oil, but what about private centralized banking?

https://www.zerohedge.com/contributed/are-middle-east-wars-really-about-forcing-world-dollars-and-private-central-banking?

Steamship Trooper said...

Five time winner of the deployment lottery here. I never got a gallon of free gasoline after. Agreed, Cap, it wasn't the oil.

Anonymous said...

I think this article missed something. Of course there was a profit to be made. The oil companies profit. Security companies profit. They make the profit and the war is paid for by the taxpayer. Every time a missile is fired or a plane leaves the ground someone makes money from it. So there is a motive to go in for the oil or whatever reason of the day.

Tucanae Services said...

Something else to consider on the oil analysis. What could we have saved $$ by having accelerated fracking tech? One could make the argument had we possessed the tech before the Iraq war the argument for 'after the oil' would have also been moot.

Paul CO said...

There you go arguing logic again. /sarc off

More and more, I'm refusing to engage lefties in any sort of debate. They have their fantasy world, and won't permit a glimmer of reality through it.

For example, I watched a Ted video on youtube last night. Some ex-feminist who did a documentary on Men's Rights was talking about how it took her a year and reviewing and re-reviewing the interviews to see that the MRA activisits weren't trashing women but asking about equality for men. She would subconsciously twist what they said in her mind to be against women. Kind of like that interview that Jordan Peterson had with the brain dead journalist (redundant, I know).

If it took her a year to see the truth, what is the point of engaging these pre-programmed idiots?

BTW, I'm not an MRA, this is just used for an example. I'm sure you can come up with many more.

typewriterking said...

South Africa actually has decades of experience producing synthetic fuel. I'm not sure how they're doing currently, but a 12-year-old article from Slate stated they were producing oil at $60 a barrel, which is actually competitive with hydraulic fracturing today.

typewriterking said...

A 12-year-old Slate article stated that a South African firm had been producing $60-a-barrell synthetic oil, which would make it competitive with hydraulic fracturing.

Joe said...

The war wasn't about oil. War is primarily about enriching the war industries at the expense of the taxpayer. The war on terror was a money laundering operation where two trillion dollars of taxpayer money was funneled through politically connected defense contractors. Maj. Gen. Smedley Butler wrote all about how this works almost 100 years ago in his famous essay "War is a Racket".

Post Alley Crackpot said...

"... you're looking at an annual price tab for synthetic oil of $177 billion to replace Mid East oil ... so a profit of $5 billion per year, effectively a net wash ..."

Victory achieved: another year that the natural petroleum producers keep the United States from pushing onward with the development of synthetic petroleum alternatives.

But you're right, it wasn't really about the oil.

It was about one group winning so that they could continue to win by creating other losers.

The "costs" were externalised and never figured into the equation for the winners.

The victory of power consists of maintaining an advantage whatever the price.

TD said...

That's assuming a rational and national view of self interest and that taking the oil was the prime objective. My own conclusion was that the interest was more international than national, and the goal was to make sure that no one power had a stranglehold on Middle Eastern oil.

If we narrow down "about the oil" to taking it for ourselves, then simple fact show that petroleum and other contracts went to European firms, not American.

Anonymous said...

It doesn't matter, the war in Iraq was a waste of fucking money. Just like the war in Vietnam, Somalia and many other wars the US has been involved in.

Anonymous said...

No it wasnt for oil, it was for the JEWS. Look at the "neo cons" who ran GW Bush administration, real architechts of the war were Perle, Wolfowitz, Feith. Oil was just a slippery red herring. It was for the jews and israel. Dont forget Netanyahus answer when first asked about the 9-11 Attacks: "Its good- well not good, but it will generate sympathy for Israel."