by FPS Doug
Tue Jan 8th, 2008 at 01:06:48 PM EST
(from the notebooks of "Jacob Freeze")
In March 2002, when Mr. Bush began his excellent adventure in Iraq, oil was selling for $20 per barrel. Oil prices briefly touched $100 per barrel this year, and the Department of Energy expects the price of oil to stabilize above $80 for the rest of 2008; about a $60 increase since we shocked and awed Iraq.
The United States consumes about 20,000,000 barrels of oil per day, so the $60 per barrel Bush dividend to OPEC is costing us $1,200,000,000 per day, $8,400,000,000 per week, $420,000,000,000 per year.
Is that really a lot of money? The typical price of an employer health plan covering a family of four in the United States is around $12,000, so instead of a Big Payoff for Big Oil, $420,000,000,000 would buy health insurance for 140,000,000 Americans.
You may think the price of oil naturally rises, and maybe the invasion of Iraq only caused a small fraction of the price increase between 2002 and 2008. But between 1990 and 2001 the price of oil went from $23 to $23 per barrel, essentially nowhere, with dips as low as $12 per barrel for 1998.
Demand in China and India grew from 1990 to 2001, the First Gulf War came and went, and there was always enough news to fill the newspapers, but the price of oil went nowhere. Then we put 150,000 soldiers in Iraq and killed 1,200,000 Muslims, and the price of oil went somewhere. Maybe it's just a coincidence.
That $420,000,000,000 per year payoff only counts US consumption. That's just the tab for Joe Budweiser. What about the rest of the world?
World-wide oil consumption is running at about 86,000,000 barrels per day. Repeating the previous calculations, the Bush dividend for OPEC increases from $420,000,000,000 per year to a respectable $1,800,000,000,000 per year for our friends in Iran, Russia, Texas, and Saudi Arabia. That an extra $1.8 trillion per year payoff.
It's a very thrilling number!
