The theory that Bush invaded Iraq to steal oil has much to recommend it -- for one thing, as Greg Palast has documented, the oil was indeed stolen. But the argument against the theory is compelling: If we now own all this new crude, why has the price at the gas pump risen so high?
And will it stay high?
Holt's piece contributes to our understanding (emphases added by me):
It has been estimated, by the Council on Foreign Relations, that Iraq may have a further 220 billion barrels of undiscovered oil; another study puts the figure at 300 billion. If these estimates are anywhere close to the mark, US forces are now sitting on one quarter of the world’s oil resources. The value of Iraqi oil, largely light crude with low production costs, would be of the order of $30 trillion at today’s prices. For purposes of comparison, the projected total cost of the US invasion/occupation is around $1 trillion.
The Iraq National Oil Company would retain control of 17 of Iraq’s 80 existing oilfields, leaving the rest – including all yet to be discovered oil – under foreign corporate control for 30 years.
How will the US maintain hegemony over Iraqi oil? By establishing permanent military bases in Iraq. Five self-sufficient ‘super-bases’ are in various stages of completion. All are well away from the urban areas where most casualties have occurred. There has been precious little reporting on these bases in the American press, whose dwindling corps of correspondents in Iraq cannot move around freely because of the dangerous conditions. (It takes a brave reporter to leave the Green Zone without a military escort.) In February last year, the Washington Post reporter Thomas Ricks described one such facility, the Balad Air Base, forty miles north of Baghdad. A piece of (well-fortified) American suburbia in the middle of the Iraqi desert, Balad has fast-food joints, a miniature golf course, a football field, a cinema and distinct neighbourhoods – among them, ‘KBR-land’, named after the Halliburton subsidiary that has done most of the construction work at the base.When the talk turns to Iran, things get really interesting...
But the Iranian regime is precarious. Unpopular mullahs hold onto power by financing internal security services and buying off elites with oil money, which accounts for 70 per cent of government revenues. If the price of oil were suddenly to drop to, say, $40 a barrel (from a current price just north of $80), the repressive regime in Tehran would lose its steady income. And that is an outcome the US could easily achieve by opening the Iraqi oil spigot for as long as necessary (perhaps taking down Venezuela’s oil-cocky Hugo Chávez into the bargain).
And the main constraint on China’s growth is its access to energy – which, with the US in control of the biggest share of world oil, would largely be at Washington’s sufferance. Thus is the Chinese threat neutralised.
The occupation may seem horribly botched on the face of it, but the Bush administration’s cavalier attitude towards ‘nation-building’ has all but ensured that Iraq will end up as an American protectorate for the next few decades – a necessary condition for the extraction of its oil wealth. If the US had managed to create a strong, democratic government in an Iraq effectively secured by its own army and police force, and had then departed, what would have stopped that government from taking control of its own oil, like every other regime in the Middle East? On the assumption that the Bush-Cheney strategy is oil-centred, the tactics – dissolving the army, de-Baathification, a final ‘surge’ that has hastened internal migration – could scarcely have been more effective. The costs – a few billion dollars a month plus a few dozen American fatalities (a figure which will probably diminish, and which is in any case comparable to the number of US motorcyclists killed because of repealed helmet laws) – are negligible compared to $30 trillion in oil wealth, assured American geopolitical supremacy and cheap gas for voters.I'm not sure I agree with Holt's scenario. We certainly haven't seen that cheap gas yet. Quite the opposite: The oil barons seem to be luxuriating in sky-high prices. Perhaps they'll keep the spigot in the "off" position until China and Iran force an economic showdown.
But then there's the problem of transporting the stuff from field to port through Iraq's unstable territory. Holt does not address that poser. It's the biggest problem afflicting his scenario, and the best reason to search out alternative motives for Bush's vile war.
Even so, I would like to hear further discussion of these interesting ideas.
6 comments:
Joe neither you nor Holt mentioned that big oil has always, by internal agreement, kept the oil in the ground to keep the price high. Yes I know they make an obscene profit but three dollars a gallon is not so high compared to real-dollar prices since 1960 or before. One might argue that hydrocarbon fuel is still too cheap, contributing to unsustainable growth.
The oil grab was a strong enough rationale for invasion of Iraq all by itself, but there are others too, like Zionists stated desire to own "greater Israel", and a perceived risk that Russia could step in to prevent the takeover if it weren't accomplished post-haste like it was.
BTW I am radically antiwar and a bushcheney hater; I am not excusing any of this mideast invasion stuff.
And who's going to man them? The current army is going to run out of people next year, the recruiting is going poorly. Where too, are the technicians going to come from? Iraqi technicians have probably already fled the country and will wind up working for Putin someday far away from the mess. American techs won't make a long-term commitment without a situation that is safe enough to bring their families.
Interesting stuff, no surprise that it comes from a literary source. Relying on data from the Council on Foreign Relations impresses me, but I know there's a semiliterate horde of millions who regard the CFR as a front for the Trilateral Commission, or is it the other way around? Maybe someone can Illuminate me further. Do you know anyone on the Council of Foreign Relations? My high school locker partner for four years, and fellow high school club member, and very personal friend for 50+ years sits on the CFR; a very ordinary fellow who lives in the same middle class as you and I, meaning he has prospered because he could prosper, not because he was born on third base (Wow, I just remembered his home run in a 6th-grade softball game, over the left field schoolyard fence, off the kid who inherited a food catering business but now walks stooped over, owing to his having to do most of the heavy lifting, who has had to work long hours just to make it in the same middle class).
Some of the reporting about "$100-a-barrel" oil is agitprop. The US dollar has lost a lot of its value, so it takes more dollars to buy the same barrel of crude. That's not the same as the cost of a barrel being raised. But since the US dollar won't recover in the foreseeable future, and prices of most things will be rising, it's probably a distinction without much difference. Loud bells go off and it's time to blame Exxon-Mobil for price gauging again. Exxon-Mobil's profit margin is tiny, but its sales volume is greater than any wholesale or retail exchange in history. Most cars and trucks made in the last 25 years are still on the roads, most of them were sold like subprime mortgages, easy to get. The true national security is bound up in our cars, trucks, and roads, their access to getting and spending.
There's an historical model or analogy for our present state of affairs, and it's the sudden rise of England's Protestantism and the sudden fall of Spanish dominance, high-seas piracy being the effective catalyst. Expansion, colonial rule, and the forcible appropriation of resources made sense as America's 'Manifest Destiny' pushed the English mercantile system across the continent. And then at that same moment oil was discovered under ground in Pennsylvania. Not long after that, when Japan started to build a navy and repeat the ways of military colonial piracy, the US and GB ordered a moratorium on imperialism; but the Great War had to enforce the decree, and the Second World War had to secure the world's vital resources for those societies who could secure them. That was 3 billion people ago, half of today's 6 billions. Economists estimate that if China and India adopted the European and American life style, it would require seven Earths to sustain everyone.
Most of the earth's inhabitants don't require crude oil and its refined products; a relatively small number rely on it, and that small number tend to dominate and control everyone's life on the planet. In 1970, 250 million people in India didn't even know the United States existed. It's safe to say that more than a billion people in 1970 never heard of the United States. In little more than a generation, the planet has become hip.
In 1971, John Lennon said there are a billion people who live south of the equator, and they're going to be asking for their rights.
If the huge and powerful economies aren't willing to raise every poor person's standard of living -- everyone's, without exception, then they have to continue to live defensively and justify the piracy.
Nothing much has changed since the Spanish, the Portuguese, and the British robbed and enslaved entire populations, except for the technological methods and some superficial shifts in power structure. Nothing much in those terms. But the establishment of an enlightened government called the United States sprung up suddenly, and it's now hanging on by its greasy fingernails, still only a political theory.
Among the great pieces of writing in the English language (I think it's the greatest by far), is the dedication address at Gettysburg that Lincoln composed and delivered in November 1863, not long after oil was discovered nearby in Titusville.
His extended and sustained metaphor of conception and birth gets to me every time:
http://www.loc.gov/exhibits/gadd/gatr2.html
I tend to believe that nothing as major as the invasion of Iraq happens without a coalition of interests agreeing on it. (Which may be why nothing has as yet moved with regard to Iran.) The oil party might have been one of those interests, but I can think of at least three others.
- The geostrategists, with their semi-occult theories about dominance of Central Asia being the key to global dominance, who see a strong US presence in that region as being necessary to hold Russia and China at bay. For these people -- who are largely the same as the Bush Sr. "realists" -- Iraq's importance is mainly as a permanent regional toehold.
- The Neocons, with their "Clean Break" strategy of fragmenting and Balkanizing the rest of the Middle East in order to ensure Israel's security.
- Various pro-business interests, generally with a pro-Saudi slant, who wanted Saddam overthrown to make way for free enterprise.
This last group (of which I believe Chalabi was a part) clearly did *not* want chaos in Iraq, and became fairly disgusted when it became clear in 2004 where things were headed. However, for the other two, chaos is definitely in their best interests.
However, the deeper point may be that even though there was a coalition for invasion, there was no coalition for what to do next -- and that in itself guaranteed anarchy and confusion.
You only need to read the RAD (Rebuilding America's Defenses) to see what the PNAC'ers plan was. That they put it on the internet is still astonishing to me. Some major themes are being carried out in Iraq. 1. Move US troops from Europe to the Middle East. 2. Secure resources necessary for the multinationals to flourish for the long term. 3. Name your place in history, they chose 'Pax Americana'. They chose the name poorly. The plan is working pretty well though, they've drained the treasury, got mucho cash using the national credit card and the oil sector is seeing record profits. A good job all around they must think.
They wrote it, they then did it, why are you the suprised?
With respect to the U.S. claiming some level of entitlement over Iraqi oil reserves...the largest consumer will be the U.S. military trying to protect oil coming out of the ground in the hopes of someday transporting crude back to the U.S.
Those who advocate the possibility of "Peak Oil" usually relegate the theory to what is in the ground. You make an excellent observation when you speak of moving the crude to the refinery. Limited, to zero, access to crude that has to be moved to the U.S. could easily "Peak" supplies regardless of what's still in the ground. Insert reference to Economics 101 - Scarcity here.
So, batten-down-the-hatches for now. China, Russia and to a lesser extent, Iran, Venezuala, et al, would much rather watch the U.S. dig it's own grave, while they build alliances and a plurality of petro-monies that are not pegged to the dollar.
The upside to the range of scenarios that have been presented is that if a floor is imposed, wherein oil per bbl will go no lower than $70, private business has a larger incentive to explore alternative energies as a for-profit endeavor. The caveat is that there will be no "moonshot" proposition from leadership, especially Bush to begin taking a fresh look at an antiquated energy policy. Else, we have the status quo with water wars next on the agenda.
sig. Mentor
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