“Oil in the next war will occupy the place of coal in the present war, or at least a parallel place to coal. The only big potential supply that we can get under British control is the Persian [now Iran] and Mesopotamian [now Iraq] supply….Control over these oil supplies becomes a first class British war aim.”
— Sir Maurice Hankey, Britain’s First Secretary of the War Cabinet, 1918
“Whatever their publicized angst over Saddam Hussein’s ‘weapons of mass destruction,’ American and British authorities were also concerned about violence in an area that harbors a resource indispensable for the functioning of the world economy.”
— Alan Greenspan, Fed Chairman 1987-2006
[We cannot leave Iraq because] “extremists [may] be in a position to use oil as a tool to blackmail the West… and they will do so unless we abandon Israel.“
— George W. Bush, November 1, 2006
“When there is a regime change in Iraq, you could add 3 million to 5 million barrels of production to world supply,”
— Lawrence Lindsey, former George W. Bush’s then-chief economic adviser, 2002
“Secure supplies of energy are essential to our prosperity and security. The concentration of 65 percent of the world’s known oil reserves in the Persian Gulf means we must continue to ensure reliable access to competitively priced oil and a prompt, adequate response to any major oil supply disruption.”
— U.S. White House, “National Security Strategy of the United States”, March 1990
When the Bush-Cheney administration took over in January 2001, the international price of oil was about $22 a barrel. Now, nearly eight years later, the price of oil is hovering around $120 a barrel, a more than five hundred percent increase. Thus, as far as oil is concerned, things have not unfolded in Iraq as planned and expected by the Neocons in the Bush-Cheney administration. First, they thought that gushing Iraqi oil would pay for the invasion and occupation of the country. Instead, the cash outlay for this adventure is likely to reach one trillion dollars, and the total cost to the U.S. economy will likely surpass three trillion dollars. Second, the price of oil is reaching record levels with no top in sight and this is threatening to tip the U.S. and the world economies into a protracted economic recession. This is partly due to the fact that Iraqi oil output has not increased as planned and is rather below where it was when the United States invaded and occupied Iraq in 2003. From a macroeconomic point of view, this ill-advised and illegal war has been an unmitigated disaster.
Nevertheless, despite sporadic pious declarations about leaving Iraq when asked, the Bush-Cheney administration is planning a 50-Year American military occupation of Iraq. They do not want to set a date to end the occupation of Iraq, because they see it as an open-ended military occupation. -This is to be expected, since the real reasons they invaded Iraq in the first place was to pursue the long run goal of controlling Middle East oil and of protecting the state of Israel from its Muslim neighbors. Indeed, everybody knows that the military invasion of Iraq by American forces had nothing to do with “democracy” or the wishes of the people. It had everything to do with securing Iraq’s oil reserves and with removing one of Israel’s enemies in the person of Saddam Hussein.
Last May 31 (2007), Secretary of Defense Robert Gates confirmed these long-term plans when he said that the United States was looking for a “long and enduring presence” in Iraq. That is the reason the U.S. has built the largest embassy in the world, 21 buildings on a 100-acre site on the banks of the Tigris, which will be capable of housing one thousand employees. That is also why they are consolidating some 100 plus military bases in that Muslim country into 14 permanent super-military bases – all geared to control militarily that part of the world for a very long time.
This is also why the Bush-Cheney administration is pushing the Iraqi Parliament hard to adopt a law that would privatize the Iraqi oil industry. If the current puppet regime now in place in Iraq were to refuse passing such a law, the so-called “Hydrocarbon Act”, it would lose over a billion dollars in reconstruction funds that would be blocked by the Bush-Cheney administration.
This overt military grab of the oil resources of a Middle East nation is a sure recipe for feeding permanent terrorism in the world and permanent war in the Middle East for as long as one can see. And if Americans elect a Republican president for a third term next November, by voting for presumptive Republican presidential nominee, Senator John McCain (R-AZ), that is what will happen since this politician is already committed to a one hundred year war in that part of the world.
According to polls, a vast majority of Iraqis is opposed to the privatization of their oil industry. Nevertheless, privatization of Iraqi oil is one of the main “benchmarks” that the Bush-Cheney administration is imposing on the Iraqi government.
It has installed in occupied Iraq a puppet government of its own that is delivering the merchandise, even though some arm-twisting pressure has been necessary. Last July 3 (2007), for instance, the U.S.-controlled al-Maliki’s Cabinet approved, with no Sunni ministers present, a US-backed draft oil law that will share Iraqi oil wealth between the three main Iraqi groups, but which will, above all, let American and foreign oil companies into the Iraqi oil sector and enact privatization under so called production sharing agreements. This has been a key political target and even a “benchmark” set by the Bush-Cheney White House, but so far the Iraqi Parliament has balked in approving the required controversial legislation, because there have been many protests, many Iraqis being very reluctant to adopt a policy of sharing oil production and revenues with foreign oil companies, especially when they have been taken away from them “at gunpoint”.
The Iraqi oil industry has been nationalized since 1975, some thirty-three years ago. Indeed, before the American-led military invasion and occupation of Iraq, the Iraqi oil fields were controlled by the Iraqi government through a state-owned corporation. This was the foundation for a relatively high standard of living in Iraq, which had one of the best health care systems in the region and was producing more Ph.D.s per capita than the U.S. It is this prosperity and this wealth that are being destroyed by the Bush-Cheney administration. Under their military occupation of Iraq and the contemplated oil arrangements, much of Iraqi oil production and oil revenues would fall under the control of foreign oil companies, mainly American and British [Exxon/Mobil, Chevron/Texaco, BP/Amoco, and Royal Dutch/Shell].
One of the two main rationales for launching the illegal invasion of Iraq would have been accomplished, i.e. to keep the flow of oil going, under the surveillance of American troops, the other rationale being the destruction of one of Israel’s strategic enemies. – Many knowledgeable observers, such as Australian Defense Minister Brendan Nelson, have confirmed that Oil Supply Security was a paramount reason for the Iraq invasion and occupation when he said that maintaining “resource security” in the Middle East was a priority. That is the reason why, when the American armies arrived in Baghdad, in early April 2003, their orders were to secure only one kind of public buildings, those of the Iraqi Oil Ministry. All the rest did not matter.
Finally, let us remember that on October 11, 2002, the U.S. Senate voted 77-23 to give George W. Bush and Dick Cheney a blank check authorization to launch a war of aggression against Iraq. Two current presidential candidates, John McCain and Hillary Clinton voted for the resolution. Let us remind ourselves also that ten days earlier, the Central Intelligence Agency (CIA) had issued a confidential 90-page classified version of the National Intelligence Estimate, which contained a long list of dire consequences to follow if the USA were to invade Iraq. The report was made available to all 100 senators, but only six of them bothered to avail themselves of the opportunity to read it. Thanks to that knowledge, people have a glimpse now about how decisions were made in Washington D.C. before the onset of this war. Even on questions of life and death, improvisation prevailed on a high scale. And now, the seeds have been sown for permanent military occupations, permanent wars and permanent terrorism in the Middle East and in the world.
The price for such a misguided policy will be high and will linger on for years to come. Indeed, many Americans are beginning to see that there is a link between Iraq war spending and deficit, and the ongoing recession and accelerating inflation. Such waste and spending on wars reduce the amount of financial resources available to finance other essential government programs at home, from education to infrastructure. They increase the balance of payments deficit and force the U.S. to borrow abroad. And when the Fed lowers interest rates to mitigate the banking crisis, the dollar plummets, which feeds inflation further when oil prices and all other prices connected with transportation and world-traded commodities go up. The current stagflation is a direct consequence of excessive U.S. military spending abroad. The sooner a majority of Americans see that, the better.
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal.
Visit his blog site at: www.thenewamericanempire.com/blog.
Author’s Website: www.thenewamericanempire.com/