Pay Me Now or Pay Me Later – Iraq and Oil
December 7, 2006
The Iraq Study Group just released their report and as expected the report paints a very bleak picture of the situation on the ground and our prospects for success. On top of this, total expenditures for this campaign are now cresting $400 billion and our weekly run rate is estimated at $2 billion dollars! While our Army is at war, the majority of the American people have yet to participate or sacrifice in any way. Worse, our government has decided to borrow money to pay for the war versus asking you and me to foot the bill. Of course the bill will come due, but we’ll let future generations figure out how to pay off our massive $9 trillion dollar national debt.
While the charter of the Iraq Study Group was to find a way out of the current quagmire, they failed to address one of the primary drivers for why that part of the world is so critically important to US interests in the first place – oil. Can any government or power base in Iraq or anywhere in the Middle East trust our motives when we are so dependent upon a resource in which they have 75% of the world’s known reserves?
Of course not, especially given our 50 year history of intervening in the region to protect our “strategic interests”. The Iraq Study Group report states: “Most of the region’s countries are wary of U.S. efforts to promote democracy in Iraq and the Middle East.” The current war and our past forays are exactly why we need to make Middle East oil strategically irrelevant.
As we drive around our gas guzzlers with yellow “support the troops” ribbons, we fail to see, or worse, we refuse to see that our own behaviors are driving our government’s actions and indirectly aiding our enemies. We now consume over 130 billion gallons of gasoline each year which comes from 7.3 billion barrels of oil. Nearly 60% of which is imported. Twenty two percent of the world's oil is in the hands of state sponsors of terrorism and under U.S./UN sanctions and this does not include Saudi Arabia. Our intelligence community has already gone on record stating that wealthy individuals from Saudi Arabia, UAE and Kuwait (our allies in the region) have been funneling money to insurgents in Iraq and to terrorist organizations around the world.
There are no silver bullets that will end our Middle East oil dependence overnight. We do know that the only area where we can make quick and sudden reductions in oil consumption is in the transportation sector. This means using less gasoline – period. If you research the US energy situation you will see that the transportation sector not only ranks the highest in oil consumption but it is also on an out-of-control growth trajectory.
What can we do?
Proactively, Americans can decide to:
a) use public transportation or bicycle,
b) drive less by consolidating trips and
c) buy a more fuel efficient vehicle for your daily commute
We purchase 16 million new passenger vehicles annually which relates to replacing 7% of the US fleet of 200 million passenger vehicles every year. If we strive to improve our fuel efficiency by 20% every time we go to buy our next car, we can radically impact our oil consumption in as little as 5 years.
What should we ask our elected representatives to do?
Legislatively, our new congress needs to:
a) update the 30 year old CAFE standards for vehicle fuel efficiency and
eliminate the loop holes for light trucks and SUVs,
b) add a dollar “war tax” to each gallon of gasoline
c) make all Department of Transportation funds going to states contingent
upon their adopting vehicle registration fees tied to fuel efficiency
The gasoline “war tax” would generate over $130 billion dollars per year. This would enable us to pay the current $2 billion per week the war is costing us and we would have enough left over to start paying down the $400 billion dollars this war has added to our national debt. Even with this tax, it would take us 13 years to pay off the $400 billion and that's without adding in the interest!
Ouch. Yes, this tax would hurt every time we fill up our vehicles. The value of this tax is that it gets all Americans to shoulder some of the pain associated with the war effort and it would drive us to make vehicle fuel efficiency a top personal priority.
Only by slowing and reversing our nation’s demand for oil can we reestablish our nation’s foreign policy reputation. Lowering oil demand in the transportation sector is the only short-term solution that can yield measurable results and individual Americans can decide to do this even before we have a much needed national energy strategy.
In November, voters showed Washington that the status quo of the Iraq war was no longer acceptable. The question remains as to the average American’s willingness to sacrifice in order to truly support our troops and to help pay for the war effort now versus leaving this to our children to worry about later.
Americans for Energy Independence
Ron Bengtson from ID
12/8/2006 6:01:59 PM
Great Article Chris!
A gas tax at the pump would help reduce demand. But, I think the money should be entirely committed to R&D.;
Please support the idea recommended by Nobel Laureate Dr. Richard E. Smalley (Father of nanotechnology), see:
I think Dr. Smalley is agreeing with you, except for your idea about 'shouldering the pain' as a remedy. Yes, the gas tax will 'hurt', but Dr. Smalley wants the gas tax money invested in the development of new nanotechnology that holds promise for producing advanced energy technology. I would not want to see a gas tax just for pain, one that would go into the general fund.
Chris W from CA
12/8/2006 10:49:05 PM
I'll research what Dr. Smalley is proposing. The tax I propose would go toward paying for the ongoing costs of the war and paying down the debt caused by the war - not into the "general fund". Once this tax is implemented, I believe the war would be very short lived.
Bill from IL
12/10/2006 9:55:46 AM
Unfornuately a dollar isn't enough. Americans were paying almost a dollar more earlier this year and while people complained, it didn't stop the travel habits to any great degree. What needs to happen is more than a dollar gas tax, the whole tax base needs to be changed. Go cold turkey and close all the loopholes as shown in the article about the true cost of gas. Reduce income tax so that the net effect is zero (or close to it) tax increase which is the only way to pass such a measure. The slap a large tax on gas gussling car and trucks and rebates on high gas mileage cars and trucks. This would kick start the market toward conservation instead of the reverse. Let the market do the job.
Chris W from CA
12/10/2006 8:45:00 PM
I agree that there needs to be a complete rewrite of the tax code as part of a full-on energy independence strategy (which we do not have). This editorial is mainly geared to addressing the war debt and ongoing expenditures. A dollar more from today's gasoline prices would make consumers buy more fuel efficient vehicles. e.g. SUV and truck sales are phenomenally below where they were a year ago.
Bill from IL
12/11/2006 10:31:27 AM
While I understand the "war tax" concept, I don't think it's polically viable. One side of the fence will simply say they need to get out of Iraq and there would be no need to have a surcharge, the other side would fight it as being bad for the economy and inflation (which it would be). This is the one case where the "full on" change is more politically possible. As far as paying for the war, that should be pretty simple, charge Iraq. That's what most American's thought would happen anyway, it's polically doable and when Iraq realizes it's a lot cheaper to pay for their own security they'll be kicking the troops out in no time.