dihard:

The cost to produce one barrel of oil in Iraq is about $1. In Saudi Arabia it’s $2. Remember that oil is currently traded on the NYMEX at $99.63 per barrel.

So where does that margin go? Through a variety of mechanisms like taxes, royalties, production shares, the governments of oil producing countries get between 45-90% of the profits. For example, the Nigerian government made $2M an hour on Nigeria’s oil revenue.

This article tells of the $370M that the President of Equatorial Guinea received from its oil production (while its people were living off of less than $1 a day). The IMF predicts that Iraq’s economy, boosted by the increase in oil revenues, will grow by 7% this year as compared to 1.3% last year!

From a 2007 NYT survey “Respondents said they would support higher gasoline prices to reduce dependence on foreign oil but would oppose higher prices to combat global warming.”

The impetus to change our dirty energy ways will not be in response to Al Gore’s scare tactics about the rising of California’s coast, New York City turning into Venice, or more Katrina-like catastrophes. Rather, it will be in response to oil shocks caused by those men down in the bunker and our fear of increasing foreign control. Just a thought.