I will play devil's advocate here and say that the Invasion of Iraq, when viewed in the greater scheme of things, may have been worthwile, the jury is still out.
Iraq holds the second largest proven oil reserves in the world - over 100 billion barrels. It also has over 100 trillion cubic feet of natural gas and are located in an extremely important geopolitical area of the world - between the Persian Gulf energy supplies and the Caspian Sea Basin - another area rich in energy resources. Under the Saddam Hussein regime, and the then current framework of UN sanctions, Iraq was not performing at maximum oil production. And to encourage Iraq to produce more would in effect benefit Saddam Hussein - a man that flaunted the "rules" of International behavior.
I am a believer in Peak Oil - and what I mean by that is that we are in an era where the easy to get cheap oil is becoming increasingly scarce. Nonetheless, with China and India's ascension into the global economy, and oil producing regions' increasing consumption of their own oil, production will likely have difficulties in the future with keeping up with demand.
Dick Cheney, as CEO of Haliburton alluded to this in his speech to the London Petroleum Institute in 1999:
"From the standpoint of the oil industry obviously and Iâll talk a little later on about gas, but obviously for over a hundred years we as an industry have had to deal with the pesky problem that once you find oil and pump it out of the ground youâve got to turn around and find more or go out of business. Producing oil is obviously a self-depleting activity. Every year youâve got to find and develop reserves equal to your output just to stand still, just to stay even. This is true for companies as well in the broader economic sense as it is for the world. A new merged company like Exxon-Mobil will have to secure over a billion and a half barrels of new oil equivalent reserves every year just to replace existing production. Itâs like making one hundred per cent interest discovery in another major field of some five hundred million barrels equivalent every four months or finding two Hibernias a year.
For the world as a whole, oil companies are expected to keep finding and developing enough oil to offset our seventy one million plus barrel a day of oil depletion, but also to meet new demand. By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from?
Governments and the national oil companies are obviously controlling about ninety per cent of the assets. Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two thirds of the worldâs oil and the lowest cost, is still where the prize ultimately lies, even though companies are anxious for greater access there, progress continues to be slow."
"Oil is unique in that it is so strategic in nature. We are not talking about soapflakes or leisurewear here. Energy is truly fundamental to the worldâs economy. The Gulf War was a reflection of that reality. The degree of government involvement also makes oil a unique commodity. This is true in both the overwhelming control of oil resources by national oil companies and governments as well as in the consuming nations where oil products are heavily taxed and regulated. "
source:
http://www.energybulletin.net/node/559
Now let's think this through. If in 1999, they believed that oil demand would increase by such that we need 50 million barrels a day by 2010 (it didn't and won't IMHO due to the depression.) Where would they get that extra production? Obviously from many ongoing discoveries... but one glaring area was of course, Iraq.
When oil production dips below demand, prices skyrocket. Who get's hurt? The entire global economy. And the US, with 5% of the world's population that consumes 25% of the world's annual production, would get hurt the most. This is a serious concern. Such an oil shock would affect the US and world economy by trillions of dollars in productivity and tens of trillions in paper wealth - much more in my opinion, than even the projected cost of the war.
Understand this - that all the numbers we see when we look at balance sheets of banks, corporate profits, and mostly, projected GDP growth of nations - all that is really dependent on cheap and abundant energy. Whereas energy is real, money is merely an abstraction that represents energy. Without cheap energy, every company's budget and revenue expectations collapse. Economies suffer, global trade contracts.
So, did the US go into Iraq to merely benefit a few oil execs and defense contractors? That's a simplistic argument IMHO - one that I used to believe in until I started studying the peak oil view, and how important oil is to our modern economy. My view now is that they did it to stave off an upcoming catastrophic hit to the world economy caused by a severe oil shock.
Did it work? Will it work?
It's too early to tell.
