The estimated cost of the Iraq War ($3 trillion) divided by the actual amount of extractable oil in Iraq (25 billion barrels) plus the spot market cost ($72 per barrel) gives a figure of $192 per barrel ((3000 / 25) + 72).
Iraq?s Reserves
It is well known that when OPEC decided to allocate production quotas on the basis of oil reserves in the mid 1980s, its? members radically adjusted their reserve figures. In 1987 Saddam announced that Iraq's oil reserves were not in fact 47.1 billion barrels but "reserves of 100 billion barrels". Today Iraq says it has 112 billion barrels of reserves.
Over 10 years of sanctions against Iraq also covered plant and equipment for the oil industry, so they got the oil out anyway they could. Some fields were over-produced (significantly lowering overall yield) and reckless methods were used:
Even today, under occupation, maintenance of Iraq?s oil fields is woeful and extraction management, as far as the Americans are concerned, seem to be based on extracting as much oil as possible in the shortest time with no regard to maximising overall yield.?They were sucking river water from the Euphrates and just injecting it in the fields,? said Marshall Adkins, an oil analyst with brokerage Raymond James. ?That just completely screws up the reservoir when you do that.?
So taking into account the mismanagement and over production of Iraq?s oil fields, the politics and economics of oil reserve claims, and after trawling through a mass of graphs, reports be economists and geologist, and looking at production trends. It seems reasonable to me to conclude that Iraq has 25 billion barrels of extractable oil.
At an extraction rate of 2.25 million per day Iraq can pump oil for a tad over 30 years (250000 / (2.25*365) = 30.44). This is of course too simplistic as production levels are not linear (Hubbert?s Curve is the generally accepted model ? a bell shape) and it therefore likely that easy oil pickings in Iraq will only last another decade.
Cost of War $3 Trillion
The Iraq ?war?, officially, has cost the USA $279,902,000,000 so far (as of 11 May 2006) and is growing at the rate of $1,000,000 every 5 minutes 46 seconds. Using simple math, a figure of $920,000,000,000 is arrived at as the likely amount of the official cost to the USA before stability in Iraq is achieved in the coming 7 years (time frame projected by analysts).
However, this figure and rate of growth are nowhere near the actuality.
Dead servicemen and woman cost an enormous amount to replace. The 2,395 who have died so far, many of who were experienced with technical skills and even professional competences, need to be replaced. Recruiting, training and retaining these replacements adds a further $598,750,000 to the overall cost thus far (based on $250,000 per person ? this seems high but it checks out to be a reasonable estimate as an average across specialties and ranks for recruiting, training and retaining). Again by simple math it can be expected that 7,983 US military personnel will die in Iraq before stability is achieved. This number of dead gives a figure of $1,995,750,000 for personnel replacement costs.
In addition, military hardware is taking a real hammering in Iraq (helicopters, planes, tanks, artillery, communication equipment and troop transports etc.) not just from enemy fire but also in the harsh environment and extended time in service. The US military have been struggling to repair or replace hardware In Iraq for some time, and it is thought in excess of $1,000,000,000,000 worth of hardware will have been destroyed or written-off well before the end of it?s scheduled service life by the time a stable situation is achieved and military personnel and equipment can be seriously reduced in Iraq.
Furthermore, the nature and circumstances of the Iraq war (how the war came about, management of the war, number of dead and injured and so on) has made the military less attractive as a career option. Hence it is envisaged pay (or benefit equivalents) will need to rise 5% above inflation to attract sufficient recruits, if the forces remain voluntary (no draft). This will add approximately $71,000,000,000 each year (this figure is about 16% of the normal US defence spending each year). The additional cost adds approximately $497,000,000,000 over the projected time of a further 7 years to achieve stability in Iraq, and will be ongoing.
There are officially 17,469 wounded US military personnel so far. Once again by simple math 58,230 is the figure arrived at for the duration in Iraq till stability is achieved. Say half these will fully recover (to be optimistic) leaving 29,115 who are permanently damaged and significantly disabled. Disable troops are massively expensive ? they have to be replaced, they generally do not lead productive lives and hence do not contribute to the economy, and generally need to rely on government benefits and might need expensive professional care and expensive equipment. The replacement costs for the wounded personnel will be (as described above and calculated likewise) $7,278,750,000. The boffins who do calculations for the actual cost a chronically disabled person to the country take a lot of things into account ? lack a productive job, non payment of income tax, benefits for housing costs, benefits for living costs, care costs etc. so the current calculated figure for such of $57,200 is not outlandish, and of course in no way reflects how much a chronically disabled person actually gets in cash each year from the state. So say for the sake of argument that the average seriously wounded military person from Iraq lives 45 years after being discharged from the forces ? this (for the 29,115 wounded) gives a figure of $74,942,010,000 in costs to USA.
Note that of 580,000 soldiers who served in the first ?Gulf War? in Iraq, 325,000 are on permanent medical disabilty (a figure of 56%). This translates to a figure of 840,000 military personnel from this ?Gulf War? being on permenat disability, which in turn translates to a cost to the USA of $2,162,160,000,000 (over 2 trillion dollars!)
Finally, there are some hidden costs in trade, exports and tourism to be borne by the USA for the Iraq war (which is generally seen as illegal, brutal and based on corruption, by most of the world?s population). A middle estimate from the experts is that $6,500,000,000, over the 10-year period till stability is achieved in Iraq, will be lost to the US economy.
So to sum up the current Iraq mess will eventually cost the USA taxpayers (if it lasts another 7 years ? as is expected):
$920 billion officially (we deduct this for the real total arrived at).
$2 billion to recruit and train personnel to replace the dead.
$1 trillion of hardware destroyed or written-off.
$497 billion in above-inflation on personnel pay.
$7.3 billion to replace the 29,115 wounded military personnel (who can no longer serve in the forces).
$75 billion (low) to $2.2 trillion (high) in benefits for the 29,115 (low) to 840,000 (high) left chronically disabled as serious wounds or trauma.
$6.5 billion lost in tourism, trade and exports.
Remember that these costs to the USA are over and above the monies appropriated to the US military in the normal budget (about $440 billion for the fiscal year 2006).
So, ((2 + 1000 + 497 + 7.3 + 75 + 6.5) ? 920) = $667.8 billion over budget if the wildly optimistic estimate for number of chronically disabled service personnel is accepted. This gives a total spend of 667.8 + 920 = $1587.8 billion for the cost of the Iraq war over and above the normal defence spending.
However, if the number of chronically disabled service personnel is similar in scale and ratio to the first ?Gulf War? we get ((2 + 1000 + 497 + 7.3 + 2162 + 6.5) ? 920) = $2,754.8 billion over budget and a total spend of $3,674.8 billion.
Note that I have not bothered factoring in USA reconstruction aid to Iraq (paid for by US taxpayers), as this only amounts to about $30 billion and is therefore negligible in the context of the other costs. Nevertheless, it is worth bearing in mind that virtually all of the Iraq reconstruction aid has been thieved from US taxpayers by Halliburton (Dick Cheney?s money laundering company) and that what has been spent on infrastructure has gone into thieving the maximum amount of Iraq?s oil. It is estimated that Bush, Cheney, Rumsfeld and the rest of the NeoCon criminals running the US government will have thieved in excess of $1 trillion from US taxpayers and Iraq in the 10 year period from the start of the Iraq war to point at which stability and accountability is achieved.
A startling fact is that $3 trillion is just about the amount needed for the USA to convert its? economy from dependence on crude oil to other sources. What a stupid waste of lives, money and resources the war in Iraq is!
