President George W. Bush has made it clear to the world that he wants the United States to lead a military invasion to change the government of Iraq. He has claimed that we must invade because Saddam Hussein has chemical and biological weapons and is developing nuclear weapons. Following the lead of the Bush administration, the U.S. mass media have given much publicity to the possibility that Saddam Hussein might have weapons of mass destruction.
But there is another reason that the U.S. government is so eager for a regime change in Iraq. U.S.-based multinational corporations want to get the oil out of Iraq. Saddam Hussein has already determined that oil companies based in Russia, and to a lesser extent in France and China, will be the ones to develop Iraq's oil industry and distribute Iraqi oil. Only if Hussein is overthrown can U.S. companies move in and get the oil.
Sound too conspiratorial? No, it's just business as usual. The mainstream press outside the United States, such as the Financial Times and the Guardian, regularly discuss the relationship between oil and U.S. foreign policy. This connection is not in the headlines in the U.S. media, in part because U.S. officials from Bush on down flatly deny the connection between oil and Iraq and refuse to discuss it with the media.
But in the back pages of the New York Times, the Washington Post and the business press it is possible to find evidence of a clear link between oil in Iraq and war against Iraq. Such evidence can also be found in the reports of several policy-planning groups and government task forces, where top business executives, expert advisors, and past, current and future officials of the U.S. government have formulated energy policy for the U.S. Getting oil out of Iraq has been a key component of this policy.
The Energy Policy of Business and Government Elites
The fundamentals of U.S. energy policy have long been established by discussions among elite policy-making groups, such as the Trilateral Commission and the Council on Foreign Relations. These groups agree that the U.S. economy will need more and more energy in the future, and, therefore, the U.S. should act to obtain increased supplies of coal, nuclear power, natural gas and oil.
In 1996, for example, the Trilateral Commission, composed of elites from the United States, Europe, and Japan argued that by the year 2010, the world will need 90 to 97 million barrels of oil per day. Half of this will have to come out of the Middle East.
These views were echoed in 2001 by Bush Administration Cabinet members, headed by Vice President Dick Cheney, who issued a report on national energy policy. The report argued that U.S. oil consumption would increase by 33 percent over the next two decades. A top priority would have to be increasing supplies of oil and gas from around the world, which could be accomplished if Middle Eastern countries would just open their doors to investments by U.S. energy companies.....
Why Rob Iraq? That's Where the Oil Is.
Iraq has 112 billion barrels of oil reserves, twice that in North America - more than Iran, Kuwait or the United Arab Emirates - second only to Saudi Arabia among nations in the Organization of Petroleum Exporting Countries (OPEC). Since 1928, when Rockefeller's Standard Oil of New Jersey joined British, French and Dutch oil companies in the Iraq Petroleum Company (IPC) that monopolized the rights to Iraqi oil, American-based oil companies have been eager to explore, drill, refine and distribute Iraqi oil. The government of Iraq took over the IPC in 1961, and American oil companies were largely shut out of Iraqi oil. After the U.S. fought Iraq in 1991, United Nations sanctions prohibited outright U.S. companies from doing business with Iraq, except for strictly limited trading in the oil for food program administered by the UN.....
Oil companies based outside the United States soon were increasing their trading in Iraqi oil. Russia got the largest share, some 40 percent of the UN oil for food program, and earned a handsome $4.3 billion distributing Iraqi oil. CEOs from U.S.-based oil industry companies, notably Dick Cheney(at the time head of oil drilling and equipment company Halliburton), argued for ending the sanctions against Iraq.
The Council on Foreign Relation's "Oil Province."
Another indication of the eagerness of American oil companies for oil out of Iraq is the task-force report, "Strategic Energy Policy," published by the Council on Foreign Relations in 2001. Funded by U.S.-based multinational corporations and foundations, the CFR is the leading U.S. foreign policy planning group. Among the corporations participating in the task force on energy were Enron (represented by Kenneth Lay, who has a professorship named after him at the University of Missouri), British Petroleum, Shell Oil (sent its CEO), Hess Energy Trading, Chevron-Texaco (sent CEO), Deutsche Banc's Alex Brown, Dynergy (sent CEO), ENI (an Italian oil company) and the Wedge Group.
The Council on Foreign Relations task force report includes recommendations to change U.S. policy toward Iraq. The reason for the policy change toward Iraq is not nuclear, chemical or biological weapons; nor is it Iraq's support for terrorism or violations of human rights. The focus of the task force was energy policy. The CFR task force echoed the Trilateral Commission, foreshadowed the Cheney energy policy report, and emphasized the need for U.S. companies to increase their supply of oil and increase their investments abroad: Several key producing countries in these important areas remained closed to investment. Opening of these areas to foreign investment could make a critical difference in providing surplus supplies to markets in the coming decade.
The CFR task force links the need for oil directly to Iraq. Iraq is called a "key oil province" by the CFR, which seems to have forgotten that Iraq is not a province of the U.S. Empire but stands as a sovereign nation. To get Iraqi oil, the sanctions that restrict trade and investment with Iraq must be discarded: In the case of Iraq, the UN sanctions imposed as a result of the Iraqi invasion of Kuwait have had a severe effect on potential Iraqi production. ... Sanctions that are not effective should be phased out. ...The United States should consider reducing restrictions on oil investment inside Iraq. Like it or not, Iraqi reserves represent a major asset that can quickly add capacity to world oil markets and inject a more competitive tenor to oil trade. The CFR envisions a competition among oil-producing "provinces" with lots of oil to unload, holding prices down.
Back at the Ranch
The CFR task force met between December 2000 and February 2001. As the task force was meeting, president-elect Bush (or rather, the unelected president-to-be) and his running mate Dick Cheney were trying to look presidential by posing in front of numerous American flags as they announced their picks for top advisors. For National Security Advisor they chose Condoleeza Rice, formerly a board member of Chevron. The corporation that would "love to have access" to Iraqi oil had named one of its supertankers in honor of Rice.
Cheney had already demonstrated that he had been recklessly eager to get into the Iraqi oil business. While Cheney was chairman and CEO, Halliburton subsidiaries, Dresser-Rand and Ingersoll Dresser Pump Co., trading through French affiliates, sold $73 million in oil equipment and parts to Iraq. Oil company eagerness to get a stake in Iraq led Halliburton to evade US/UN sanctions and even led Cheney to evade telling the truth. On July 30,2000, when Cheney was running for vice president, he was asked on the ABC-TV program "This Week" whether Halliburton subsidiaries traded with Iraq. He denied it. If Cheney was willing to evade U.S. law and the UN and lie for $73 million in oil business in Iraq, what would he do for 100 billion barrels of Iraqi oil worth $3 trillion? We will know soon.
Their Oil, Their Decision
Although U.S. companies are clear in their desire to invest and obtain oil in Iraq, Saddam Hussein, with all his faults, nevertheless, leads the internationally recognized and sovereign government of Iraq. Hussein gets to make the decision about who invests in his country and who gets the oil. Given the way the United States has treated his country, should it surprise us that his first choice is Russia, followed by France and China?
The largely French oil company Total Fina Elf has signed contracts with Iraq to develop the Majnoon oil field, which has reserves of 25 billion barrels. Lukoil, a Russian company, has a $4-billion contract dating from 1997 to develop the 15-billion-barrel West Quirna field. The biggest plum was pulled in 2002, when Russia and Iraq agreed to a 10-year, $40-billion plan for economic cooperation, encompassing projects in the oil, gas, petrochemical, transport and other industries, including the development of 49 oil fields.
If the current government of Iraq stays in power, the signed contracts will be implemented. If the UN inspectors find that Hussein has complied with Security Council resolutions, the sanctions on Iraq will be lifted and Russian companies will invest, obtain oil and profits out of Iraq, to the chagrin of Bush, Cheney and Rice.
The only way to change the oil flow is to get rid of the regime that made the contracts. If the U.S. invasion of Iraq is successful in toppling Hussein, the administration has a plan for the military occupation of Iraq. A U.S. military commander will govern Iraq for a year or more and would maintain the oil fields. There would be $1.5 billion worth of work to rehabilitate Iraqi oil fields, and companies like Halliburton are in the best position to gain the business, according to a Deutsche Bank report.
When the U.S. military finally turns over control to an Iraqi civilian government, the Iraqi National Congress (INC) is likely to play a leading role. The INC has emphasized that they will not be bound by the agreements with Russia, France or China to develop oil fields. Ahmed Chalabi, the INC leader, favors a U.S.-led consortium to take charge of the Iraqi oil industry. Chalabi says "American companies will have a big shot at Iraqi oil," according to the Washington Post.
Our Government, Our Decision
For evidence of the Iraq and oil connection, we shouldn't expect a smoking gun. We shouldn't expect oil company CEO's to be calling Bush now to tell him to invade Iraq to get oil. Oil companies don't second guess the day-to-day decisions on foreign policy when there is an administration in the White House that oil executives can trust. Nor should we expect oil company executives to be giving speeches gloating over their good fortune; their PR departments are well aware it would alienate the public and might turn people away from war. If the United States is successful in its invasion and eliminates Hussein, we shouldn't expect the U.S. to hog 100 percent of the Iraqi oil business for U.S. companies; our ally England will certainly be cut in, with lesser shares for France and Russia, whose economies can't be allowed to collapse.....
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