A matter of life, death - and oil
Weapons of mass destruction are cited as the spur for action. Perhaps the real motive is something just as urgent?
Terry Macalister, Ewen MacAskill, Rory McCarthy in Baghdad and Nick Paton-Walsh in Moscow
Thursday January 23, 2003
One of the most popular themes on the placards of anti-war demonstrators across the US and Europe is that the looming confrontation is primarily about oil. US and British ministers dismiss such a charge as the stuff of conspiracy theorists, and instead argue that the Iraqi president, Saddam Hussein, has to be dealt with for one reason: the threat posed by weapons of mass destruction.
And, yet, western powers have been fighting over Iraq's "black gold" for decades. Travelling through the country, it is immediately obvious why this is such a great prize in energy terms.
Around Mosul in the north, flares from oil wells can be seen at regular intervals in the otherwise empty grasslands; even in the centre of the country, in Baghdad, the skyline is lit by the al-Dohra oil refinery; and further south, in the desert scrubland round Basra, there is a huge concentration of wells.
Iraq has the second biggest known oil reserves in the world, after Saudi Arabia. But its facilities have been starved of investment over the last few decades, partly because of war and partly because of sanctions. The vast al-Dohra facility is a symbol of all that is wrong. In an advanced state of decay, rusting pipes link a series of large, sand-coloured storage tanks, almost every one of which is crudely patched with sheets of steel.
At present Iraq exports around 1.5m barrels a day but energy experts say this could be increased to 6m barrels within five years after reinvestment. The US needs access to new energy reserves. American industry and motorists are guzzling gasoline at a rate that easily outstrips the rest of the world while domestic reserves are running out at a time when demand is set to leap.
The US energy department frightened politicians with a study in 2001 known as the Cheney report after the former head of Halliburton oil services group, now US vice-president, who wrote it. He predicted that imported oil would need to rise from 10.4 million barrels a day at present to 16.7 million barrels a day by 2020.
The report spelled out the US dependence on a stable energy market and the need for a foreign policy that would protect America's energy supply. "In a global energy marketplace, US energy and economic security are directly linked not only to our domestic and international energy supplies, but to those of our trading partners as well," it said. "A significant disruption in world oil supplies could adversely affect our economy and/or ability to promote foreign and economic policy objectives, regardless of the level of US dependence on oil imports."
George Bush, like Mr Cheney, is a former oil man, as are many of his close staff, so they need no lessons on how the energy world works. As politicians, they also know that their voters' commitment to cheap and available petrol for their car is seen as an inalienable right not far short of bearing arms.
Traditionally, America looked to Saudi Arabia and Venezuela for its crude supplies. But since the September 11 terrorist attacks, carried out in the main by Saudi nationals, the former important Middle East ally has been deemed unreliable while political turmoil in Venezuela has virtually halted exports to the US.
Washington has been wooing Russia and African nations to secure future supplies but there is nothing like the ultra-cheap-to-produce reserves in Iraq sitting just below the desert sands.
Professor Peter Odell, professor emeritus of international energy studies at Erasmus University in Rotterdam and a visiting professor at the London School of Economics, rejected the view that oil was the main driving force behind the current Iraq frenzy. "Its not all about oil. There are other factors such as US fears about weapons of mass destruction, revenge for earlier failures and the fact they believe Iraq has not behaved properly towards the US for 20 years," he said. "My own view is that an attack will lead to destruction of Iraqi oilfields as happened in Kuwait and there could be severe oil market problems in the short term. Longer-term, Russia and France have pre-emptive rights for deals done or money owned by Iraq but clearly the US will get in on the act [on redeveloping Iraqi oilfields]."
Paul Slater, who owned and ran a tanker fleet hired out to Shell and is a leading figure in the independent tanker owners association (Intertanko), is less certain. "I think oil is a major issue which cannot be left out of the equation although whether it is the major driver I don't know."
It is not just wild-eyed western peaceniks that believe oil is at the centre - or close to the centre - of the pending conflict. It is quite a commonly held view even in the conservative business world but few are willing to express such things publicly.
Fadel Gheit, a former Mobil chemical engineer and now an investment specialist with New York brokerage firm Fahnestock & Co, told 50 of the largest pension funds and financial investors in America before Christmas that the expected war was "all about oil" and that the global fight against terrorism was just "camouflage" to mask the real purpose.
Later he told the Guardian: "The Americans have nothing against the people of Iraq but our way of life is dependent on 20m barrels a day and half of it has to be imported. We are like a patient on oil dialysis. It's a matter of life and death. The smart people [in Washington] all know this but its not generally advertised on the kind of shows that most people watch: MTV and soap operas."
Mr Gheit said a strike against Iraq has become vital in the eyes of Washington because politicians and security chiefs fear that Saudi Arabia, the traditional provider of US oil, is a political "powder keg" that is going to explode from within. "Of the 22m people in Saudi Arabia, half are under the age of 25 and half of them have no jobs. Many want to see the end of the ruling royal family and whether it takes five months or five years, their days are numbered. If Saudi Arabia fell into the hands of Muslim fundamentalists and the exports were stopped, there is not enough spare oil anywhere else to make up the shortfall."
But Dr Charles Tripp, head of politics at the School of Oriental and African Studies, argues that the idea that oilfields need to be physically seized in order to be controlled is outdated. "Oil is a part of this," said Dr Tripp. "But it is as much to do with asserting American power."
Oil was key factor in the first Gulf war, along with protecting the sovereignty of a United Nations member. This time round "oil" is a word that politicians and officials in both Washington and London are almost afraid to speak, fearful of how it will play in the Arab world.
An independent working group part-sponsored by the Council on Foreign Relations has just handed over a report to Mr Bush entitled Guilding Principles for US Post-Conflict Policy in Iraq. It argues: "Iraqis have the capability to manage the future direction of their oil industry. A heavy American hand will only convince them, and the rest of the world, that the operation against Iraq was undertaken for imperialist, rather than disarmament reasons. It is in America's interest to discourage such misconceptions."
The international oil companies are already circling. The US and British accuse the Russians and especially the French of playing dangerous games with Iraq, keeping in with Baghdad in the hope of securing favourable oil contracts.
The French foreign ministry is infuriated by the suggestion. One French diplomat challenged journalists to look at what was really happening and insisted that they would find it was US companies that were making the running to secure a share of Iraqi oil.
Senior oil executives generally want to avoid talking publicly about the issue but privately they say it is "rubbish" to suggest that they need Iraq so much that they would support a war. Mark Moody-Stuart, a director of Shell and its former chairman went further, telling the Guardian that a military strike would unhinge the Middle East and was therefore a "recipe for disaster".
So what do the people at the centre of the impending war think? "Our oil is the main reason America wants to attack Iraq," said Ali al-Rawi, head of the economics department at Baghdad University. "They want to control our oil and control price and production levels. They know the future oil resources for the world will continue to come from this area for many years."
US administration's foot on the gas
George W Bush
Unsuccessful Texas oilman. His prospecting company, Arbusto, was on the point of going bankrupt when it was bought out by another company, Spectrum, which in turn was bought out by another oil firm, Harken, which kept Bush on the board for his contacts, primarily with his father.
Before becoming vice-president, Cheney, below, was the chief executive of Halliburton, the world's largest oilfield services company. Halliburton does not drill for oil but it sells everything to the corporations that do the drilling. It also provides housing and services for the US military.
Before coming to the White House the national security adviser sat on the board of Chevron. They were clearly happy with her strategic advice and Bush family contacts as they named an oil tanker after her.
Old Bush friend from Texas oil days. Evans stayed in the oil business. Before becoming commerce secretary, he was the chairman of Tom Brown Inc, a $1.2bn oil and gas company based in Denver, and also sat on the board of TMBR/Sharp Drilling, an oil and gas drilling operation.
Environmentalists objected to her appointment as interior secretary because of her oil links. As a lawyer she had represented Delta Petroleum. She also ran an organisation called the Coalition of Republican Environmental Advocates, co-funded by BP Amoco.
Source: Centre for Responsive Politics
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