WP: Oil Folly

[RamboLiberal]

http://www.washingtonpost.com/wp-dyn/articles/A2668-2003Sep25.html

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When the oil fields and pipelines are restored, Iraq could be pumping as much as 5 million barrels a day. But Iraq's OPEC quota is traditionally the same as Iran's, which is currently under 4 million barrels a day. So it is not unreasonable to suppose that Iraq's rejoining OPEC could reduce oil supply and raise oil prices at least as much as the OPEC supply restrictions announced this week.

And $10 billion a year is just the beginning. Oil is oil: When import prices go up, the price of domestic oil goes up too. America imports about 60 percent of its oil. Consumers would pay American oil producers another $7 billion or so for oil that it won't cost a penny more to pull out of the ground. And when oil goes up, other energy sources follow. Oil is less than 40 percent of our total energy consumption. So add another $25 billion or so in higher prices for natural gas, coal and so on. We're up to more than $40 billion a year. And that's ignoring the effects on the rest of the world -- as we usually do. Despite our best efforts, Americans can't manage to consume more than a quarter of the world's energy.

Put it all together, discount heavily for safety, add a dab of tendentiousness and you can easily come up with a figure like, oh, say, $87 billion a year as a modest estimate of what Iraq's restoration to OPEC could cost. Eighty-seven billion? Why, isn't that the amount Bush wants for Operation Iraq Et Cetera? Why, yes, it is.