The Beleaguered State Of The Iraqi Oil Industry

eOne of the grand hopes of the Bush Administration was that a new government in Iraq could be self-supporting with revenues from oil. Instead what we have seen is a badly beleaguered industry with output levels far below those of 1990 before the first Gulf War.

Since the second 2003 war, an estimated loss of $11.35 billion in damage and lost oil revenues from insurgent acts has continued to hobble this industry. In 2005 an estimated $6.5 billion in damage from insurgent attacks as well as the loss of life of 47 oil workers and 100 police protectors too place. There were 186 reported attacks on oil production in 2005, and this helped to cut oil production from 2.0 million barrels a day down to 1.8 million barrels, or about half of the 1990 preGulf War production.

Without a strong base of economic support from oil revenues it is difficult to see where Iraq can ever be a fully independent state from the support of the U.S. any time in the near future. It is as though the U.S. is now locked into support for a giant welfare state that requires vast finances to rebuild an infrastructuture to build an economy that can support a government, build school, build roads, light streets, provide clean drinking water, pay police or military members.

It is ironic that conservative supporters of the Bush Administration vote to cut vital social services for the poor of America, while continueing to vote for massive funds for Iraq and Afghanistan which cost $2 billion American dollars a week and show little success so far, only a worsened state in many areas including declining oil production and oil revenues to ever get the Iraqi economy standing on it's own.