By OLGS, guest blogger
Well, it finally happened. It cost $51 to fill up the car. It’s the first time I had to pay fifty dollars for a fill-up. Sure, I’ve seen other motorists spend that much and more to fill up their SUVs and their pick-up trucks, but not for a car. Gas in Minneapolis is in the $3.65/gallon range. Joe College-on-leave tells me it is at $4/gallon in Southern California. I suppose we will see that $4 price-tag in Minnesota by Memorial Day, if not sooner.
Today’s crude oil futures are selling at $125/barrel and are also likely to go up. Secretary of State Rice’s standard answer to difficult questions “Who could have expected such a thing” is literally true in this case, but also misleading.
In my spare time, I’ve been reading some of the unclassified and now published documents of the Bush Administration in the lead-up to the invasion of Iraq. Last fall, the Senate Intelligence Committee published two documents written in January 2003 for the Administration, one on the likely effects of invasion on Iraqi society (short summary: unwelcoming to U.S. occupiers for a year or so, but they’ll get over it), and the second on the likely effects of invasion on other Middle East countries. One item particularly caught my eye—crude oil prices might skyrocket from $15/barrel to as high as $40/barrel, but that after a period of uncertainty, the prices would decline because western oil companies would come in to modernize the Iraqi oilfield production and increase output from Saddam’s 3 million barrels/day to perhaps twice that figure. So the Administration, and in particular, Dr. Rice's staff, was warned that it might have a difficult first year of occupying Iraq with corresponding higher oil prices, but that by 2005, the promised liberation would start to reward the invaders. Here we are in 2008 with $4/gal gas and $125/bb oil….Who could have expected such a thing….
