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4 US eyes still on the Iraqi
prize By Michael Schwartz
The struggle over Iraqi oil has been going
on for a long, long time. One could date it to
1980 when president Jimmy Carter - before his
Habitat for Humanity days - declared that Persian
Gulf oil was "vital" to US national interests. So
vital was it, he announced, that the United States
would use "any means necessary, including military
force", to sustain access to it.
Soon
afterward, Carter announced the creation of a
Rapid Deployment Joint Task Force, a new military
command structure
that
would eventually develop into US Central Command
(Centcom) and give future presidents the ability
to intervene relatively quickly and massively in
the region.
Or we could date it back to
World War II, when British officials declared
Middle Eastern oil "a vital prize for any power
interested in world influence or domination" and
US officials seconded the thought, calling it "a
stupendous source of strategic power and one of
the greatest material prizes in world history".
The date when the struggle for Iraqi oil
began is less critical than our ability to trace
the ever-growing willingness to use "any means
necessary" to control such a "vital prize" into
the present. We know, for example, that before and
after he ascended to the US vice presidency, Dick
Cheney has had his eye squarely on the prize. In
1999, for example, he told the Institute of
Petroleum Engineers that when it came to
satisfying the exploding demand for oil, "The
Middle East, with two-thirds of the world's oil
and the lowest cost, is still where the prize
ultimately lies."
The mysterious Energy
Task Force he headed on taking office in 2001
eschewed conservation or developing alternative
sources as the main response to any impending
energy crisis, preferring instead to make the
Middle East "a primary focus of US international
energy policy". As part of this focus, the task
force recommended that the administration put its
energy, so to speak, into persuading Middle
Eastern countries "to open up areas of their
energy sectors to foreign investment" - in other
words, into a policy of reversing 25 years of
state control over the petroleum industry in the
region.
The Energy Task Force set about
planning how to accomplish this historic reversal.
We know, for instance, that it scrutinized a
detailed map of Iraq's oilfields, together with
the (non-US) oil companies scheduled to develop
them (once the United Nations sanctions still in
place on Saddam Hussein's regime were lifted). It
then worked jointly with the administration's
national-security team to find a compatible
combination of military and economic policies that
might inject US power into this equation.
According to Jane Mayer of The New Yorker,
the National Security Council directed its staff
"to cooperate fully with the Energy Task Force as
it considered the 'melding' of two seemingly
unrelated areas of policy: 'the review of
operational policies towards rogue states', such
as Iraq, and 'actions regarding the capture of new
and existing oil and gas fields'".
While
we cannot be sure that this planning itself was
instrumental in setting the US on a course toward
invading Iraq, we can be sure that plenty of
energy was being expended in Washington planning
for the disposition of Iraq's massive oil reserves
once that invasion was successfully executed.
In 2002, just a year after Cheney's task
force completed its work, and before the US had
officially decided to invade Iraq, the State
Department "established a working group on oil and
energy", as part of its "Future of Iraq" project.
It brought together influential Iraqi exiles, US
government officials and international
consultants. Later, several Iraqi members of the
group became part of the Iraqi government. The
result of the project's work was a "draft
framework for Iraq's oil policy" that would form
the foundation for the energy policy now being
considered by the Iraqi Parliament.
The
prize The specific prize in Iraq is
certainly worthy of almost any kind of
preoccupation. Indeed, Iraq could some day become
the most important source of petrochemical energy
on the planet.
According to the US Energy
Information Administration, Iraq possesses 115
billion barrels of proven oil reserves,
third-largest in the world (after Saudi Arabia and
Iran). About two-thirds of its known oil reserves
are in Shi'ite southern Iraq, and the final third
in Kurdish northern Iraq. However, in energy
terms, only about 10% of the country has actually
been explored, and there is good reason to believe
that modern methods - which have not been applied
since the beginning of the Iran-Iraq War in 1980 -
might well uncover magnitudes more oil.
Estimates of the possible new finds
offered by officials of various interested
governments range from 45 billion to 214 billion
additional barrels, depending on the source; but
some non-governmental experts see the final
treasure exceeding 400 billion barrels. If the
last figure is correct, then Iraq would likely
become the world's largest source of oil.
For the most part, Iraq's petroleum has
"attractive chemical properties", that is, its oil
is considered to be of very high quality.
Moreover, both its current fields and many of the
potential new discoveries would be extremely cheap
to access, if security weren't such a problem
today in Iraq. James Paul of the international
policy-monitoring group the Global Policy Forum,
offers this positive view:
According to Oil and Gas Journal,
Western oil companies estimate that they can
produce a barrel of Iraqi oil for less than
$1.50 and possibly as little as $1 ... This is
similar to production costs in Saudi Arabia and
lower than virtually any other
country.
With the price of a barrel of
crude oil today above $64, the potential for
profits is stupendous, and the only question is:
Who will pocket them - the oil companies or the
Iraqi government - and, if the former, which oil
companies will those be? It is not inconceivable
that any major oil companies able to claim a large
portion of the Iraqi oil spoils could double,
triple or even quintuple their already gigantic
global profits.
Under Saddam Hussein,
Iraqi oil never fulfilled the potential of even
its proven oilfields. A modest goal for the
country's oil industry would have been producing
3.5 million barrels per day, but the temporary
disruptions caused by the Iran-Iraq War and the
more permanent ones caused by UN sanctions imposed
after the Gulf War in 1991 severely limited
production. From the late 1990s until the US
invasion in 2003, Iraq averaged about 2.5 million
barrels per day.
Knowledge of this level
of underproduction was certainly one factor in
deputy secretary of defense Paul Wolfowitz' prewar
prediction that the administration's invasion and
occupation of Iraq would pay for itself; he hoped
for a quick postwar increase in production to 3.5
million barrels per day or, at the $30 per barrel
price of oil at that time, close to $40 billion
per year in revenues.
An expected
expansion in production levels (once the oil
giants were brought into the mix) to perhaps 6.5
million barrels, through the development of new
oilfields or more efficient exploitation of
existing fields, had the potential to more than
cover the expected US short-term military costs
and leave the new Iraqi government flush as well.
This, then, was the allure of melding
energy policy and military policy, as Cheney's
energy group and allied administration officials
envisaged it.
The initial campaign to
capture Iraqi oil With all this history,
the particular way the US sprang into action
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