The tactical cost of doing business

When doing business, opportunity costs are of great importance when decisions must be made. Usually, an opportunity cost discussion will go something like this -
“If we invest in property “A”, what will it benefit us compared to the potential loss of not being able to use that capital to invest somewhere else?” I know it’s overly-simple, but when options are weighed, the choice with the greatest potential benefit usually wins. The benefit can be financial or, in this case, security-focused.
And I believe… no, I’m convinced that energy independence has a direct impact on our national security.

When was the last time you heard someone compare cost and/or energy savings to a decrease in support for regimes who do not have our national security interest in mind?

I’d say it’s not heard often enough…

Let’s look at the cost of a barrel of crude and compare it to the cost of one ammo can full of 7.62 mm AK-47 rounds. Or maybe a picture can better illustrate:

Let’s assume that a barrel of crude is going for $55 and we purchase that crude from Mr. A, who happens to be a Wahabist-loving supporter of terror (not all are, mind you, and this is simply an illustration).

Mr. A takes that $55 and pays out his production cost of $5/barrel, leaving him with $50 to do what?

Well, we won’t delve into all the unpleasantries such as renting an entire floor of the Ritz Carlton when only one room is needed, or any of the other lurid details. Let’s just assume he gives a small portion of the remaining $50 to support Hamas, Al Qaida, Al Aksa, or any number of nasty folks. Let’s say 1%, or 50 cents as his “zakat” or alms giving, which is one of the 5 pillars of Islam. I’ve chosen 1% although 2.5% is the customary figure.

In most countries, 50 cents can buy you 10-20 rounds for your Ak-47. 10-20 rounds is about a full magazine depending on the size the end-user chooses. They can even be cheaper and in a country like Iraq, still overflowing with the legacy of Sadam’s penchant for hording weaponry, 7.62 mm rounds are as common as rice.

Maybe this picture will further illustrate my point:

Next time you fill up, think about Hugo Chavez, our Venezuelan neighbor, or Hamas and any number of questionable characters, all of whom benefit from the sale of oil and our dependance on it. We can even go so far as to say that the model we’ve established will continue to do damage even after we’ve hopefully changed our ways. Indians and Chinese by the billions are striving to attain our level of comfort and, in turn, consuming more and more.

Here is a link to a New York Times article related to this topic and how migration caused by “global warming” impacts national security.

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