Shortly after the Marines rolled into Baghdad and tore down a statue of Saddam Hussein, I visited the Ministry of Oil. American troops surrounded the sand-colored building, protecting it like a strategic jewel. But not far away, looters were relieving the National Museum of its actual jewels. Baghdad had become a carnival of looting. A few dozen Iraqis who worked at the Oil Ministry were gathered outside the American cordon, and one of them, noting the protection afforded his workplace and the lack of protection everywhere else, remarked to me, "It is all about oil."
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The issue he raised is central to figuring out what we truly pay for a gallon of gas. The BP spill in the Gulf of Mexico has reminded Americans that the price at the pump is only a down payment; an honest calculation must include the contamination of our waters, land, and air. Yet the calculation remains incomplete if we don't consider other factors too, especially what might be the largest externalized cost of all: the military one. To what extent is oil linked to the wars we fight and the more than half-trillion dollars we spend on our military every year? We are in an era of massive deficits, so it pays to know what we are paying for and how much it costs.
The debate often hovers at a sandbox level of did-so/did-not. Donald Rumsfeld, the former defense secretary, insisted the invasion of Iraq had "nothing to do with oil." But even Alan Greenspan, the former Federal Reserve chairman, rejected that line. "It is politically inconvenient to acknowledge what everyone knows," Greenspan wrote in his memoir. "The Iraq war is largely about oil." If it is even partly true that we invade for oil and maintain a navy and army for oil, how much is that costing? This is one of the tricky things about oil, the hidden costs, and one of the reasons we are addicted to the substance -- we don't acknowledge its full price.
If we wish to know, we can. An innovative approach comes from Roger Stern, an economic geographer at Princeton University who in April published a peer-reviewed study on the cost of keeping aircraft carriers in the Persian Gulf from 1976 to 2007. Because carriers patrol the gulf for the explicit mission of securing oil shipments, Stern was on solid ground in attributing that cost to oil. He had found an excellent metric. He combed through the Defense Department's data -- which is not easy to do because the Pentagon does not disaggregate its expenditures by region or mission -- and came up with a total, over three decades, of $7.3 trillion. Yes, trillion.
And that's just a partial accounting of peacetime spending. It's far trickier to figure out the extent to which America's wars are linked to oil and then put a price tag on it. But let's assume that Rumsfeld, in an off-the-record moment of retirement candor, might be persuaded to acknowledge that the invasion of Iraq was somewhat related to oil. A 2008 study by Nobel Prize-winner Joseph Stiglitz and Harvard University budget expert Linda Bilmes put the cost of that war -- everything spent up to that point and likely to be spent in the years ahead -- at a minimum of $3 trillion (and probably much more). Again, trillion.
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