Friedman and Oil Prices

Man, Tom Friedman sure is annoying today, getting all sanctimonious about how Bush needs to either get with the alternative-energy program or else STFU. But why is Friedman so angry? Bush already had a strategy to lower oil prices: invade Iraq. And he did so with the blessings of… Tom Friedman.

Back in ’02, Friedman wrote that the invasion of Iraq could lead to either $6/barrel or $60/barrel oil, but he spilled a lot more ink on the glorious benefits of the $6 scenario:

The scenario that could produce $6-a-barrel oil goes like this: Iraq under Saddam has been pumping up to two million barrels of oil a day, under the U.N. oil-for-food program. Let’s say a U.S. invasion works and in short order Saddam is ousted and replaced by an Iraqi Thomas Jefferson, or just a ”nice” general ready to abandon Iraq’s nuclear weapons program and rejoin the family of nations.

That would mean Iraq would be able to modernize all its oilfields, attract foreign investment and in short order ramp up its oil production to its long-sought capacity of five million barrels a day. That is at least three million barrels of oil a day more on the world market, and Iraq, which will be desperate for cash to rebuild, is not likely to restrain itself. (Now you understand why Saudi Arabia, Iran and Kuwait all have an economic interest in Saddam’s staying in power and Iraq’s remaining a pariah state, so it can’t produce more oil.)

Today, Iraq is producing roughly the same (or less) as before the invasion. And though the Saudis and Kuwaitis would have preferred to keep Saddam in power, it wasn’t because they feared its massive increase in production capacity. They simply liked the stability.

Oh, and, of course, $6/barrel oil would have unleashed a torrent of increased consumption. We’d all be driving Hummers today. It would have led to an environmental disaster that would make 2008 Friedman’s head spin. But 2002 Friedman had other priorities.