$10.86/gallon Gasoline

While researching an article on energy for America Votes I tripped across testimony given to the Senate Foereign Relations Committee that jolted me. This evidence was given by the President of the National Defense Council Foundation, Milton R. Copulos. The testimony, given this past March 30th, pegs the real cost of a gallon of gasoline at $10.86. Let's take a look at the method Mr. Copulos used to reach this conclusion. It's rather eye opening.

The first thing we need to do is recognize and accept the real reason George W. Bush invaded Iraq (as mr. Copulos has). We all know it wasn't for the reasons publicly aired: weapons of mass destruction, ties to Al Qaeda, responsibility for the attacks of September 11th, the noble cause of spreading democracy. No, we all realize it was to seize control of Iraq's oil in light of sharply increasing global demand for petroleum.

According to Mr. Copulos "China alone has accounted for 40 percent of the total increase in world oil consumption over the past several years." Economic expansion in India and Eastern Europe have also increased demand for oil. Faced with sharply increasing demand for a military ever more dependent on petroleum, the United States made a strategic decision to seize control of Iraq and secure the world's second largest producer of oil for its own economy and defense. In fact, according to the United Nations Security Council, the United States insured that the new Iraqi constitution guarantees a major role for foreign oil companies within that country. What more needs to be said?

Therefore Copulos concludes that we must calculate the cost of the war in Iraq along with the all other costs to determine its real price. He calculates the "hidden cost" of oil in 2003 at $304.9 billion. This escalated to $779.5 billion in 2005. He then figures these costs into the per barrel cost and translates that to a pump price of $10.86/gallon. You can read his testimony for the full explanation.

It also seems to me he's omitting one other hidden cost. That would be the interest. Since President Bush is refusing to raise taxes to pay for this war it is being financed via deficit spending. The Treasury Bonds issued to finance the war are also costing the average American. This is an additional cost unaccounted for even in Copulos' figures.

Here's an interesting irony: we invaded Iraq to gain control of its oil partly because of the rapidly expanding economy of China which, in turn, is being fueled by cheap imports manufactured there for the American market. That war is also being financed by China through its purchase of U.S. Treasury Bonds. Americans are losing good jobs to China and, as a result, are paying through the nose at the pump. Their taxes will, someday, have to rise sharply to repay the interest on the massive debt being amassed by the costs of this war, further eroding their purchasing power. Not only have they lost their jobs to China at some point they will lose their savings and their capital to them.

All so they can drive their Suburbans, Expeditions, Hummers and Explorers.

All this mumbo jumbo reminds me of an old axiom: what a tangled web we weave when first we practice to deceive.