A day late and a dollar short… (Iraqi currency cliches continue)

Steve at Cows and Graveyards correctly connects the upcoming oil extraction agreements in Iraq to peak oil. Yes, Iraq has the second largest oil reserves in the world, and as the global demand (mostly due to 40% increase in yearly consumption caused by the burgeoning Chinese economy) outstrips supply, prices will skyrocket unless the US can preserve a pipeline through a puppet government in Iraq. I think that it’s time for us to admit this to ourselves: we’re going to spend $1 trillion for a fraction of that in oil. In a good year, Iraq made $14 billion a year on its oil. To me, this sounds like a bad investment, but perhaps these calculations make more sense when we compare them to the 1956 Israeli invasion of Egypt. Fifty years ago, Britain and France sponsored an Israeli attack on Egypt after Nasser nationalized the Suez Canal. Then, the Suez canal was a necessary conduit for importing oil to Europe. Yet this ‘simple invasion’ saddled Israel with its two most troublesome possessions: the Gaza strip and a reputation for doing the imperialists dirty work. Moreover, it distracted the world from the Hungarian Revolution, giving the Soviets time to reoccupy Budapest in force and re-establish democracy communism after the first of many Eastern European insurrections.

When I look at the Suez crisis, I see the parallel logic: the Soviets threatened to shore up Egypt’s defenses, and could have cut off Europe’s oil supplies while hotting up the war in Hungary. It was a potential flashpoint towards World War 3. In our present case, however, we’re just competing with China for oil in the marketplacce. There’s no war, cold or otherwise, between us. Why not invest that $1 trillion in energy alternatives and conservation, or just bite the bullet and pay more per gallon and let the market do the rest? Much as I prefer this brand of power politics and geostrategic Risk to the mealy-mouthed justifications of freedom and democracy for the tyrannized Iraqi people, I can’t help but wonder whether lying to ourselves about our real goals has led us to make a catastrophic blunder. Perhaps the Bush administration thought it was being pretty sneaky, but at this point their noble lie and grand strategy seems to come down to a bit of bad math.

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