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The politics of oil

October 18, 2002 | Pages 6 and 7

"If Kuwait grew carrots, we wouldn't give a damn."
--Lawrence Korb, assistant defense secretary under Ronald Reagan

HERE'S HOW Anthony Swofford, a former Marine corporal, described the 1991 Gulf War in an October 2 op-ed article in the New York Times: "From the ground, I witnessed the savage results of American air superiority: tanks and troop carriers turned upside down and ripped inside out; rotten, burned, half-buried bodies littering the desert like the detritus of years--not weeks--of combat."

"On the last day of the war, from a sniper hide, I observed a confused Marine infantry battalion attempt to overtake an airfield, while smoke from burning oil wells hampered command and control. Across the radio frequency, I heard medevac calls, after two Marines shot each other with rifles; on the other side of the airfield, hundreds of Iraqi soldiers surrendered, their boots hanging around their necks, white towels and propaganda surrender pamphlets clutched in their hands like jewels. I watched the fallout from the burning oil wells coat my uniform, and I knew that I was breathing into my lungs the crude oil I was fighting for."

Swofford makes it clear. Oil profit, plain and simple, was the bottom line in Bush Sr.'s bloody 1991 war on Iraq. And while Bush Jr. may talk about "liberating the Iraqi people" from Saddam Hussein, the real reasons for his new war have a familiar ring.

Oil isn't the only reason for the looming war on Iraq. The Bush gang has made it plain that it wants the U.S. to dominate the world, both economically and militarily. Iraq is the latest stop of a war to ensure Washington's position as world super-cop.

But that doesn't mean that old-fashioned greed for oil profits isn't central. ELIZABETH SCHULTE looks at the politics of oil.

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IRAQ IS one of the largest oil resources in the world--with proven reserves of 112 billion barrels of oil, second only to Saudi Arabia. This simple fact has shaped Iraq's relationship with the rest of the world from the beginning.

Iraq itself was carved out by Britain and France, which came together before the end of the First World War to divide their spheres of interest in the Middle East. The former Mesopotamian provinces of the Ottoman Empire became Iraq in 1921, under the control of a British puppet ruler, King Faisal. A line was drawn on the southern border to create Kuwait, making Iraq virtually landlocked. These borders would fuel future conflicts, as Iraq vied for waterways to transport goods in and out of the country.

With the discovery of massive quantities of oil in 1927, the right to exploit the wells was given to the Iraq Petroleum Co., which was jointly owned by Royal Dutch Shell, Anglo-Persian and an American and French consortium.

From the start, Iraq Petroleum's local managers acted more like colonial masters than managers of a private company. This situation fed widespread resentment among Iraqi Arabs, resulting in the king's overthrow in 1941. Britain, of course, would have none of this, taking out the new nationalist government of Rashid Ali with a pounding air bombardment.

At the end of the Second World War, a critical part of the U.S. government's plans to dominate the postwar world included control over oil resources. Believing that their main oil sources in the American Southwest, Mexico and Venezuela weren't enough, the State Department initiated an intensive study to find others.

According to the department's economic adviser, Herbert Feis, only one place would do. "In all surveys of the situation," Feis noted (in a statement quoted by Daniel Yergin in his book The Prize), "the pencil came to an awed pause at one point and place--the Middle East."

So President Franklin Roosevelt met with Saudi King Abd al-Aziz Ibn Saud on a U.S. warship in the Suez Canal following the February 1945 conference in Yalta between Roosevelt, Winston Churchill and Joseph Stalin. It's there that Roosevelt gave the king a promise of U.S. protection in return for privileged access to Saudi oil. This deal is at the center of the U.S.-Saudi relationship to this day.

In Iraq, whenever access to oil was threatened, Western powers intervened. In 1972, when Ba'ath Party leader Gen. Ahmad Hasan al-Bakr nationalized the oil industry, the U.S. was quick to act--as it was in 1951 when Iran nationalized its oil.

Nixon armed opposition among Iraqi Kurds to overthrow al-Bakr. But when then-Vice President Saddam Hussein agreed to give up the important Shatt-al-Arab waterway in the Persian Gulf to the U.S.-controlled Shah of Iran, U.S. arms to the Kurds dried up.

Two decades later, when Iraq invaded oil-rich Kuwait in 1990, the U.S. responded by organizing the most intensive bombing campaign in history--even after Iraq had begun to withdraw. As many as 200,000 Iraqis were killed in the war, and 1 million more have died over the last 10 years because of crippling economic sanctions.

Long before the September 11 attacks gave the Bush administration the green light for its never-ending "war on terrorism," Iraqi oil was already on the agenda. In April 2001, Dick Cheney, chair of the White House Energy Policy Development Group, commissioned a report on "energy security."

"The U.S. remains a prisoner of its energy dilemma," the report concludes. "Iraq remains a destabilizing influence to…the flow of oil to international markets from the Middle East. Saddam Hussein has also demonstrated a willingness to threaten to use the oil weapon and to use his own export program to manipulate oil markets.

"Therefore the U.S. should conduct an immediate policy review toward Iraq including military, energy, economic and political/ diplomatic assessments. The United States should then develop an integrated strategy with key allies in Europe and Asia, and with key countries in the Middle East, to restate goals with respect to Iraqi policy and to restore a cohesive coalition of key allies."

It looks like Cheney is getting what he wanted--a war for oil.

Washington is already using the promise of Iraqi oil flowing from a post-Saddam Iraq to buy support from its European allies, and Russia as well. And if they don't go along, they might not get a cut of the action.

The Iraqi National Congress, one opposition group that might be part of a new government in Iraq, has already announced that it plans to look into existing oil contracts, noting who supported the overthrow of Saddam.

This has left Russian oil companies such as Lukoil scrambling to save their oil deals. "We're against this war," said Dmitry Dolgov of Lukoil, which signed an exploration contract in 1997. "We don't know about the U.S., [but] we know that our government and our president promised to back all our interests in Iraq under any possible event."

But whatever happens, you can be sure that the U.S. will be calling the shots. And with control over Iraq's vast oil resources, the U.S. will be positioned to undercut Saudi Arabia--the top oil producer.

"This could prove to be the biggest oil grab in modern history, providing hundreds of billions of dollars to U.S. oil firms--many linked to senior officials in the Bush administration--and helping to avert a future energy crunch in the U.S.," Michael Klare wrote in the Nation magazine. "But is oil worth spilling the blood of American soldiers and Iraqi civilians who get caught in the way?"

The oil-for-food sham

THE UNITED Nations (UN) oil-for-food program was supposed to lessen the impact of UN sanctions that have been in place against Iraq since 1990--and are responsible for the death of at least 1 million Iraqis.

Under the program, Iraq is allowed to sell a limited amount of oil and use the revenues to purchase food, medicine and other basic necessities. But this is only after Iraq pays war reparations to the obscenely wealthy rulers of Kuwait--and covers the cost of the UN's expenses in administering the program.

Two former directors of the program, Hans von Sponeck and Denis Halliday, have resigned in protest over the sanctions. "Oil-for-food is a stranglehold," said Halliday, who resigned in the fall of 1998 after 34 years of working in the UN system. "It's just keeping 22 million people in a refugee camp."

Oil-for-food is no solution. The sanctions must be ended now!

Texas oil men in the White House

TO FIND the men who call the shots in the White House, all you need to do is follow the trail of oil.

Before he was baying for blood in Iraq, Vice President Dick Cheney made a killing as CEO of Halliburton, the world's largest oil services firm. The company made a small fortune on contracts to clean up Kuwait's oil industry after the Gulf War--a war that Cheney pushed for as Bush Sr.'s defense secretary.

Cheney made $39 million in salary and stock options over just five years at Halliburton. Today, he might call Saddam Hussein a madman, but when Cheney was running Halliburton, the company sold more equipment to Iraq than any other U.S. company.

In November 2000, the Financial Times reported that Halliburton subsidiaries submitted $23.8 million worth of contracts with Iraq to the United Nations in 1998 and 1999 for approval by its sanctions committee.

Before he got into politics, George W. Bush was a Texas oilman. And though Texas law--filled with oil industry tax breaks--makes it hard to fail, Bush almost did several times. Lucky for George that his dad's name is Bush, too--so his oil ventures were bailed out time and time again by friends of his politically connected father.

In the 2000 election, Bush and Cheney received $12.6 million in campaign contributions from the oil and energy sectors. In return, they gave the energy bosses what they wanted.

When Bush took over the White House, Enron CEO Kenneth Lay, Bush's biggest financial backer since he first ran for Texas governor in the early 1990s, effectively became the informal U.S. chief of energy policy--until Enron went belly up amid an embarrassing corporate scandal.

In order to make the energy kingpins happy, the Bush administration pushed for oil drilling in Alaska's Arctic Wildlife Refuge, "clean" coal and nuclear power. And next on their list is a war on Iraq.

Oil profits come first for U.S. in Colombia

EARLIER THIS year, the Bush administration added an extra $100 million to the already swollen package of military aid for the South American country of Colombia.

For years, Washington justified shoveling money at the Colombian government as part of the "war on drugs"--though it was an open secret that the aid fueled the regime's four-decade-old dirty war against left-wing rebels.

But this time, the Bush gang didn't even use the drug war cover story. Administration officials admitted that the extra $100 million would be used to protect a 483-mile-long pipeline that takes oil from the country's interior to the coast. The pipeline is owned U.S.-based oil giant Occidental Petroleum, which gets 5 percent of its revenue from the Colombia pipeline.

"We thought a $98 million investment in Colombian brigades to help protect this pipeline is a wise one and a prudent one," Secretary of State Colin Powell said before a congressional hearing. "What makes this pipeline unique is that it is such a major source of income." And that means it's worth violence and war.

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