It is true that in a perfect world, we would like to see Iraq deliver to the market 5 million barrels of oil per day. This would provide the necessary revenue to fund the rebuilding effort. Unfortunately, it is not a perfect environment and the insurgents depend on Iraq spending large sums of money to rebuild oil and natural gas infrastructure so that they can once again destroy the facilities. The insurgents want chaos and what better way to produce chaos then to destroy infrastructure especially when that infrastructure is viewed as helping to fund one faction over the other. And when Iraq spends large sums on oil infrastructure, it takes away money from local economy and reconstruction in otherwords, it has an opportunity loss factor. The achilles heal is that without oil revenue the country cannot rebuild, but if we fund oil infrastructure and it gets destroyed, recovery will not take place. It is a catch 22. The answer is really fundamental--sell the oil in the ground as "futures." A foreign exchange credit to those countries willing to fund reconstruction. It can be likened to selling war bonds during WWII only these bonds are backed by future oil deliveries. As a future however and fortunately for those obtaining the oil credit, the oil cannot be sold at market value. It must be sold at below the current opportunity cost of the oil.

In a paper that I will be delivering in July to the University of Massachusetts titled "Creating a Sustainable Iraq" I discuss this topic in great detail. Oil is the only answer, but don't expect it to be delivered anytime soon.