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IRAQ: IF IT ISN'T ABOUT OIL TODAY IT SHOULD BE

Tuesday, July 08, 2008
Joseph Mazzafro

The Defense Supplemental Appropriations Bill was passed during the last week in June and action on the compromise FISA legislation was deferred until after the Congress' 4th of July recess so the Intelligence Community (IC) will at least have funds if not complete authority to operate for the rest of FY 08 on behalf of the nation's security. Other than that I am at loss for topics of significance (at least to me) about the health and status of the IC that has pretty much been the staple of this blog. Of course, spending $45.00 two to three times a week to fill up my Honda CR-V could have me distracted, so let's talk about energy, the IC and national security.Even before oil shot through the $140 dollar a barrel hurdle, power and cooling have been much on the minds of the directors of most IC agencies, primarily because of the impact on data center operations. With no hedges in either the FY 08 or FY 09 National Intelligence Program (NIP), concern must be rising about diverting money in the year of execution from mission programs of record to heat/cool IC work spaces, fund travel, and operate motor pools as well as running data centers. Moreover, IC workers will be less than enthralled with paying more for the "privilege" of longer commutes on roads with traffic beyond their design capacity due BRAC actions. Worse yet, past history tells us Research and Development(R&D), training, and infra-structure recapitalization will be the first bill payers to cover the IC's raising energy costs. Noticeably reducing funds in these three areas makes organizational stagnation a likely outcome. Short changing R&D allows adversaries the time they need to adjust IC collection and processing advantages. Cutting back training for a workforce where 50% of its members have been with the IC for less than five years means a capability gap as IC baby boomers retire in increasing larger numbers. Failure to make adequate investments in IC Information Technology (IT) upgrades means adversaries will have state of the art IT hardware, software and networks that will make them both more dangerous and harder for the IC to thwart.I suppose here is were I should make the case that the United States must end its dependence on foreign oil by shifting to alternative energy sources, but since that seems to have been the policy of every President since the "oil shocks" of the 1973 OPEC boycott I shall spare you my sophistry on "energy independence." In the mean time to maintain America's standard of living if not its national security we must decrease the price of oil quickly by strengthening the dollar, decreasing demand, and increasing supply. At $4.00 a gallon Americans have apparently found the point were the price of energy becomes more elastic since demand is dropping, but I don't see much progress in terms increasing the value of the dollar and I am not sure what the economic incentive is for exporting nations to increase the supply of oil so they can charge less for it. I know there is the national strategic petroleum reserve, opening Anwar, and offshore drilling as viable ways for quickly increasing supply but that discussion is on the "GREENPEACE" blog! President Bush (XLIII) has visited Saudi Arabia twice in the last six months to, among other things, encourage them to increase their oil production, but the Saudi Royal Family seems to have forgotten that it was the United States that protected them for the Iranian Revolution in the 80s and then kept Saddam's army in 1991 from marching out of Kuwait into their oil fields. Perhaps we should make Kuwait and Saudi Arabia "an offer they can't refuse!" We could tell these two monarchies that because of the rising cost of energy that United States must withdraw its forces to the region even though this will likely result in an Iranian Shia dominated Iraq on their northern borders. Relative to the threat this presents to Islam's holy shrines in Mecca and Medina falling under Iranian Shia control, the oil fields in Saudi Arabia are of secondary concern. Since that is old school power politics that may not be so well suited to the era of globalization and interconnected economies, perhaps turning to Iraq as an alternative exclusive supplier of oil to the US is the way to go?The oil reserves in ancient Mesopotamia are second only to Saudi Arabia, but to tap them in the short term will take a massive investment to recapitalize Iraq's petroleum infra-structure to get the oil flowing. Since I am talking about national security here I would fund this investment by matching windfall profit dollars from American oil companies with DoD/IC money from suspended funding from some large over budget behind schedule programs (SBIRS, FCS, LCS, FIA follow on, SBInet, etc. come immediately to mind).You need to refer to only one State of the Union Address since 2004 to know the U.S. did not go to Iraq for its oil, but to seize its weapons of mass destruction (WMD) and remove Saddam Hussein from power, and bring freedom to the Iraqi people. We got Saddam, didn't find any WMD, and we are still working on freedom for Iraq, but in the mean time the price of oil has increased three fold! Given that price increase and that OPEC’s largest oil producer is prospering because of the protection provided by America's presence in Iraq, the United States' national interest is now demanding that the continue presence of American forces in Iraq be tied to making that country our leading foreign energy supplier. We need their oil to maintain our economy and freedom and they need our money to establish their economy and freedom!That's what I think ------ what do you think?

Comments

Why is it that gasoline at $4.00+/gallon is deemed an outrage, but a cup of Starbuck's very bad coffee at the equivalent of $15.00/gallon seems OK?

By Mark Lowenthal

I don't understand the relevance of Iraq's oil reserves to the US economy. After all, the US imports most of its oil from:
#1 Canada
#2 Mexico
#3 Venezuela
#4 Saudi Arabia

So how is the $10,000,000,000 per month cost of operations in Iraq justified on the basis of energy security? Clearly, I'm missing something here.

By Peter Grimes

Iraqi oil revenues are relevant to me in two ways ----- first increase in supply of oil lowers the price of oil regardless of where imported from; second Iraqi oil revenues can be used to lower US costs for operations in Iraq by Iraq reimbursing the US for more of what we do there. joemaz

By joemaz