Saturday, June 21, 2008

Blast from the past: self-referencing (again!)

Okay - repeated self-referencing isn't cool... nevertheless, with oil now around $135/bbl, I just can't help myself!
A deal for Saddam: What might have been
Suppose that 5 years ago today, 19 March 2003, the Congress had voted to strike a deal with Saddam:
We'll buy all Iraq's oil for $90/bbl, starting immediately - 20 March 2003.

The going price was ~$30/bbl.
This proposal would have represented about a 200% mark-up over then-current market price.

Would Saddam have accepted the offer?
For a 200% mark-up over market, I'm betting, "yes".
We might even have been able to throw in a couple of provisions:
- Give U.N. weapons inspectors full access.
- Devote at least 1/3 of the $$ to improving infrastructure.
- Act bellicose towards Iran.

Iraq's pre-war production was about 2.5Mn bbl/day. Let's be generous and say it was 3Mn bbl/day.

To date we would have paid (20 March 2003 - 19 March 2008):

What has the war cost to date?
[as of about 10 p.m. MDT, Tues, 18 March 2008. Click link for current estimate.]
[Latest direct cost of the war - as of 21 June 2008? $530,322,349,849. If this post were updated today, 21 June 2008, the cost of the proposed deal would be $518,670,000,000... again, less than estimated direct cost of the war... and, again: we'd have the oil!]
The $90/bbl deal would have cost about $8Bn dollars less than the war so far.
(... and war costs are accelerating!)

Saddam might have given us a big bear hug in return for our largesse.

AND: we'd have the oil! - paid for with U.S. taxpayer $$.
We could have simply GIVEN IT AWAY to Exxon-Mobil, or any other of W's oil-patch buds.

They'd have had to pay for shipping & handling, but paid $0 for the crude!

What might have been.
$90/bbl vs $135/bbl. Hmmm... doesn't sound like such a bad deal in retrospect.

Stop the madness!

1 comment:

  1. I'm seeing more and more blogs saying "stop the madness." I think you started something.