A friend of mine who works in finance sent the following analysis to me….

So, we will spend $700 billion on the iraq war.

Iraq currently is producing 2.02m bbl/day of oil. At $70 a barrel, this works out to $140m/day or $51 billion a year. Given extraction costs of about $15/barrel, we are looking at net profits of $40 billion a year. This means we would have to steal all of Iraq’s oil production until early 2022 to break even.

Another way to look at it…..

In 2002, we were importing about 11m bbl/month (Dec 2002 import statistics). Quite a bit, surprisingly. This worked out to $9 billion a year. So, we could have just bought 70 years worth of oil from Iraq instead of the war.

Another way to look at it…..

For $700 billion, we could have bought approximately 140 nuclear power plants (each reactor is about 5 billion). This would more than double the current nuclear output (now at 19.3% of US energy needs) to over 40%. Our breakdown is as follows of US energy needs (2005 stats from EEI’s statistical yearbook)

Coal - 49.7%
Nuclear - 19.3%
Gas - 18.7%
Hydro - 6.5%
Fuel Oil - 3.0%
Biomass - 1.6%
Other (solar, etc..) - 1.3%

Effectively, this would have allowed us to close all of our current Gas and Oil electricity producing plants. Moreover, since nuclear fired energy is now cheaper than all other forms (although only barely cheaper than coal), energy prices would decrease. This would allow the US to be a completely independent energy producing country - with only our transportation and our plastic toys dependent on oil.

Final way to look at it

Average house price in 2004 for the US was $264,540 (I use 2004 because that’s a nice mid-point in the war). We could have bought 2.646m houses with that 700 billion. In Kansas there are 1.037 million households, in oklahoma, 1.342 million households. We could have bought a brand new house for everyone in both states. By the way, there are 3.4 million households in New Jersey, so we almost could have bought a house for everyone there……