Thursday, June 19, 2008

Just in Case Anyone Still Wondered Why

We invaded and waged war against Iraq for its vast reserves of OIL. Not because Saddam had WMD. Not because he was tyrannizing his people. Not because he had aided al-Qaeda in planning or executing any terrorist attack. It really is this simple.

Today, the New York Times reports that "[F]our Western oil companies are in the final negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power." These are no-bid contracts, by the way, "which prevailed over others by more than 40 companies, including some from Russia, China, and India." The contracts are "relatively small by industry standards," but give Exxon-Mobil, BP, Shell, and Chevron an advantage when bidding on future contracts.

The Iraqi government called these no-bid deals "stop-gap measures" to get highly-skilled oil workers in the fields. The plan is to increase oil production by 20% to 3 million barrels a day within six months, then to double it to 6 million a day after new fields are tapped.

Once the short term contracts expire, however, the Western companies "will be allowed to match bids offered by competing companies to retain the work once it has been opened to bidding."

It's estimated that Iraq has approximately 115 billion known barrels of light crude oil in its oil fields, plus about 220-300 billion more that may be undiscovered according to the Council on Foreign Relations. These assets are valued at $30 trillion at today's prices. The cost of the Iraq War is, by comparison, about $1 trillion (these were the estimates about eight months ago, so the value of the oil is probably double now, and the cost is still less than 5% of the value of the oil). You don't think that the administration weighed the cost of a few billion dollars and a few dozen American lives lost each month against access to an asset that large? If you don't, you probably still think "they hate us for our freedom."

How will the US ensure its dominance over Iraqi oil? Why, by establishing permanent military bases in Iraq, of course! You didn't think they were there to demonstrate American goodwill, did you? This is the OIL bidness (or should I say "no-bidness"?).

Sullivan doesn't believe it was a plot from the beginning, but I strongly disagree. Those secret meetings Cheney had with oil company executives early in Bush's first term, purportedly to hammer out the country's energy policy, could easily have included discussions on how the big oil companies could leverage US military power to get its grips on Iraqi oil reserves (which, as we can see, is believed to be largely undiscovered). Maybe Bush didn't know about it, but I wouldn't for a minute put it past the sneering Cheney to have all that figured out years in advance. Remember, he was Defense Secretary under Bush 41 and had the highest security clearance the US allows. To think he didn't bring with him a wide knowledge of military options considered by the Pentagon through the late '80 and early '90s to his next job as CEO of oil giant Halliburton would be just unbelievably naive.

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