November–December 2002
If you want to rule the world you need to control the oil. All the oil. Anywhere.
THE REGION that comprises Iraq, Iran, Kuwait, and Saudi Arabia is at the epicenter of the pending U.S. war on Iraq. Despite all the rhetoric about weapons of mass destruction, one glaring fact stands out: These four countries have more proven oil reserves under their soil than the rest of the world combined.
A quick glance at the Bush administration’s corporate ties reveals close connections to virtually the whole oil and gas industry. Vice President Dick Cheney was the head of Halliburton, the world’s largest oil services firm. Secretary of Commerce Don Evans was a partner at Tom Brown, a Denver-based oil exploration firm. Exxon, the world’s largest corporation in terms of revenue, was second only to scandal-ridden Enron in contributions to the Republican Party, and National Security Advisor Condeleezza Rice, the administration’s “Russian expert,” was on the board of directors of Chevronóthe contractor for the development of the Caspian’s largest oil field and pipeline network in Kazakhstan. Yet, the coming war with Iraq is less about satiating the U.S. thirst for oil and lining the pockets of Bush administration croniesóthough it will help do bothóthan it is about the control of oil.
Oil is the world’s most important commodity. Without oil, today’s industrial society would simply be impossible. Oil and natural gas are the fuel for the engine of modern capitalism, with Organization for Economic Cooperation and Development (OECD) nations accounting for two-thirds of all oil consumed in the world.
Oil and gas are not only the source of 62 percent of the energy used in the world, they are integrated into the production of many goods and products that we take for granted.2 But just as important, every tank, every airplaneófrom the B-52 to the stealth bomberóevery cruise missile, and most war ships in the U.S. or any other nation’s military arsenal, rely on oil to wage their terror. In fact, the U.S. Department of Defense is the consumer of over 80 percent of all the energy used by the U.S. government.
Overall, oil and gas make up 65 to 70 percent of all the energy consumed by the three largest economies in the worldóthe U.S., Japan, and the European Union. And many of the industrializing countries of the Third World, such as South Korea, China, Brazil, and Mexico, have seen their oil and gas consumption skyrocket.
Iraq: Too many birds with one stone?
The events of September 11 have provided the Bush gang with the unique opportunity to move from containing the tensions in the Persian Gulf to resolving them once and for all in its favor. It now wants to settle its “Iraqi and Iranian problems,” bring Saudi Arabia back into orbit, and roll back OPEC to its preñ1970s irrelevance. In the words of one recent Pentagon presentation, Iraq is seen by the U.S. as “the tactical pivot” for re-molding the Middle East on Israeli-American lines.49
In the event of a U.S. invasion, Iraq would become a vast source of cheap oil under U.S. control which could be used to undermine OPEC, provide the battering ram to deal with Iran and Saudi Arabia, and be a lever against Washington’s potential political or economic rivals.
At some 112 billion barrels, Iraq now has the second largest proven reserves in the world after Saudi Arabia’s 265 billion barrels. And like all other Middle East oil, Iraqi oil is cheap to produce. Iraq’s oil, just like the Saudi’s, is geographically concentrated, with fields containing as much as 10 to 30 billion barrels in one location. This translates into low production and exploration costs.
In addition to giving the U.S. leverage over the price of oil, control of Iraqi oil will also be an economic boon to U.S. oil giants. After the last Gulf war in 1991, there was a bonanza for American oil companies such as Dick Cheney’s Halliburton, to rebuild Kuwaiti and Saudi oil infrastructure damaged in the war. The same will be repeated in Iraq. The only question is how many of the contracts will go to American companies, and which crumbs will be thrown to the Russian and French companies to win their acquiescence.
Lower oil prices will tighten the noose around Iran’s ailing oil-dependent economy. Why not let economics soften up Iran, and make of the job of regime change in evil number two on Bush’s “axis of evil” list easier? The same economic pressures, combined with enough “diplomatic” persuasion, could also force Saudi Arabia back under U.S. control.
Iraqi oil could also be a lever against stronger opponents of the U.S., providing a useful tool to undermine competitors such as Russia and China, and hampering Russia’s bid to expand its oil development plans. The U.S. can also keep France, Germany, and Japan, who could pose a threat to its undisputed dominance, in check. As Asia Times writer Pepe Escobar put it: “Oil and gas are not the U.S.’s ultimate aim. It’s about control. If the U.S. controls the sources of energy of its rivals—Europe, Japan, China, and other nations aspiring to be more independent—they win.”
The naked fist
But there is also a political dimension to the United States push to invade Iraq, which is just as important as control of oil. And that is simply the fact that the new Bush Doctrine cannot be considered “credible” so long as Saddam Hussein remains in power. As Angelo Codevilla, professor of International relations at Boston University put it: “Anybody who hates America can look at Iraq and say, ëThey have successfully thumbed their nose at America and lived to tell about it.’”51 The concern, then, is not that Iraq poses a real military threat, but that it has “thumbed its nose” at the U.S.
The point is underscored by Gregory Copley, head of the International Strategic Studies Association: “Iraq is a stage on the way to securing U.S. interests, and U.S. credibility will be absolutely lost unless it follows through effectively. The U.S. has got to be perceived to have had its way with the world community. This is the reality of historic power.”52
Today, the United States is leading with its strongest suit, its unchallenged military might, to maintain its advantage over rivals and friends (who may be tomorrow’s rivals). While in peacetime, agreements, treaties, and trade pacts are negotiated over a period of months, even years, to settle disputes on how to carve up the world markets, in war the questions are settled faster and more directly.
One first occupies, then gets whatever treaties one wants. In war, possession is nine-tenths of the law. If U.S. oil firms are behind their Russian and French competitors in scoring oil concessions in Iraq, or if they have been kept out of Iran by U.S.-imposed economic sanctions while European, Japanese, and Russian firms have been signing lucrative deals, “regime change” can change all that. Old time imperialism is back.
http://www.isreview.org/issues/26/oil_geopolitics.shtml
