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supply of domestic coal. However, these truly plentiful hydrocarbons are not liquid assets and will require expensive mining and cracking to create clean burning synfuel. Switching to them as a major source of oil would require years of lead time and ungodly sums of upfront capital. A much simpler solution, for the near term, is to secure the oil reserves of Iraq, third largest in the world, for American and UK interests, and that's exactly what's been going on.

In general, our major media's war coverage has been consumed with the body count, the mounting costs, the impending troop surge, and a date for withdrawal. However, the real story is that a committee of high Iraqi officials has just unanimously approved the adoption of a new "hydrocarbon law" that drastically rewrites the rules and regulations, in effect since 1972, regarding foreign participation in their oil fields. This decision, which should be ratified by the Iraqi Parliament by early March, will make their reserves much more accessible and "friendly" to the US. It will also create a huge cash cow for the major oil companies through guaranteed profit margins (double those typically offered elsewhere) in what are commonly called PSA's or production sharing agreements.

We, the American public, are indeed paying a very high price for our energy needs. The argument can be made that roughly half our defense budget is being spent in or near the Middle East. If that's the case, the real price for the oil we currently consume is north of $200 per barrel (market cost of $50, plus amortized related defense costs). We need straight talk, not half-truths regarding our energy dependence, what we are going to do about it, and the real reason for war in Iraq. Feeling uneasy about Iraq? You should be....

* Data Source: CIA World Factbook

Learn more about this author, Samuel R. Kephart.
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