The Oils of War

by Paul Donahue
February 2003

The American way of life is not up for negotiation. - George H. W. Bush

We need an energy bill that encourages consumption. —George W. Bush, Trenton, N.J., Sept. 23, 2002

Oil is our civilization and we will never permit any demon to sit over it. - then-US Secretary of State James Baker speaking to India's foreign minister in 1990.

How did our oil get under their sand? - protestor's sign at anti-war demonstration in Washington, D.C. on January 18th, 2003.

If you are among the many Americans still struggling to understand the Bush-Cheney Oilygarchy's desire to rush into a war against Iraq, maybe the excerpts below will help. They are from Strategic Energy Policy Challenges for the 21st Century, the report of an independent task force sponsored by the James A. Baker III Institute for Public Policy of Rice University and the Council on Foreign Relations, and submitted to Vice-President Cheney in April 2001.

“Americans face long-term energy delivery challenges and volatile energy prices……As the 21st century opens, the energy sector is in critical condition. A crisis could erupt at any time from any number of factors and would inevitably affect every country in today’s globalized world. While the origins of a crisis are hard to pinpoint, it is clear that energy disruptions could have a potentially enormous impact on the U.S. and the world economy, and would affect U.S. national security and foreign policy in dramatic ways……the world is currently precariously close to utilizing all of its available global oil production capacity……the American people continue to demand plentiful and cheap energy without sacrifice or inconvenience……Over the past year, Iraq has effectively become a swing producer, turning its taps on and off when it has felt such action was in its strategic interest to do so……Iraq remains a destabilizing influence to U.S. allies in the Middle East, as well as to regional and global order, and to the flow of oil to international markets from the Middle East. Saddam Hussein has also demonstrated a willingness to threaten to use the oil weapon and to use his own export program to manipulate oil markets……Like it or not, Iraqi reserves represent a major asset that can quickly add capacity to world oil markets and inject a more competitive tenor to oil trade. However, such a policy will be quite costly as this trade-off will encourage Saddam Hussein to boast of his “victory” against the United States, fuel his ambitions, and potentially strengthen his regime. Once so encouraged and if his access to oil revenues were to be increased by adjustments in oil sanctions, Saddam Hussein could be a greater security threat to U.S. allies in the region…..”

It would be reassuring to think that our illustrious leaders only considered war as a last resort, and then only to right some terrible wrong in the world. It would be consoling to think that whenever our soldiers went marching off to war it was in support of a noble cause. I, for one, would dearly love to believe those things. But forget it, that is not how the world works.

Wars are fundamentally about resources - water, arable land, hunting or fishing grounds, mineral wealth, even human labor - either defending one's own resources or trying to seize someone else's. Conventional wisdom aside, access to resources may quite possibly be at the root of all wars, ever. It is true among our closest living relatives, the chimpanzees, it was true in the time of Cro-Magnon man, it has been true with tribal societies, it was true in medieval times, and it has been true throughout modern times. Most importantly, it is true today as we move closer and closer to waging mass slaughter against the people of Iraq.

The views of many outside the US are not very popular here at home. As author Jeremy Rifkin wrote, "While most Americans think that we are planning an attack on Iraq to save the world from a madman, most Europeans think that Bush is the madman, with the evil intention of grabbing a foothold in the oil-rich Middle East to extend the American empire."

Unfortunately, war is a very, very nasty business. It is horrible and bloody and many, many innocent people are inevitably killed and maimed. So, to assuage our guilt at resorting to the ultimate barbarism of war, we are always desperate to produce adequate justifications, excuses, and explanations. We will tenuously cling to even the flimsiest of justifications to provide moral cover for our actions. Inevitably, the aggressors portray themselves as noble…the righteous defenders of freedom, the liberators, the avengers. Perhaps Mark Twain said it best, "Statesmen will invent cheap lies, putting blame upon the nation that is attacked, and every man will be glad of those conscience-soothing falsities, and will diligently study them, and refuse to examine any refutations of them; and thus he will by and by convince himself that the war is just, and will thank God for the better sleep he enjoys after this process of grotesque self-deception." In the end, however, despite our protestations, it always seems to boil down to resources…who owns them, who controls them, who exploits them, and who profits from them.

Oil is the ultimate resource. Due to our inconceivably short-sighted national energy policy, oil has come to occupy a role in our lives and our society that is topped in importance only by oxygen, water, and food. It heats and lights our homes, schools, offices and factories. It powers our industry, and runs our transportation systems. In its reincarnation as plastic, it has been molded into what at times seems like 90% of the material goods we produce and use, supplanting metals, wood and glass. As I sit here at my desk, typing on a plastic keyboard, in front of a plastic computer monitor casing, I can quickly glance around my office and easily see a hundred or more items made of plastic or incorporating plastic bits. With most of my paper now being recycled, even the discarded material in my plastic waste basket these days seems to be principally composed of unrecyclable plastics. In short, if the flow of oil suddenly stopped tomorrow, so would life in the United States as we know it. So, on the list of resources worth fighting for, oil is pretty close to the top.

However, when it comes to energy issues in general, and oil issues, in particular, many Americans seem disconnected. Many never understood the oil connection with the first Gulf War, despite Bush I publicly stating as much in the beginning. We have not yet grasped the oil connection with Afghanistan, despite the fact that we have been bombing and killing there for over a year with the oil pipeline now under construction. And now many of us are still missing the critical oil connection with Iraq. Yes, of course, oil is alluded to now and then by the media and politicians, but more like it is an afterthought and of only incidental importance. We just do not seem capable of comprehending the absolutely critical role that oil plays in our foreign policy decisions. Given the central role that oil does play in our society, the near total lack of restraint we exhibit at every turn in our use of oil, and the staggering quantities of the stuff that we import into this country on a daily basis, one might reasonably assume that we would understand all the implications of our oil use.

So why is it that we can not come to terms with the crucial oil connection? Well, one reason might be that for us here in the United States, absurd as it might seem, gasoline is actually cheaper than bottled water! While Germans are paying about $4.00 US per gallon for gasoline, here in the United States (as of late January 2003) "regular" grade gasoline is selling at the pump for about $1.37 to $1.59 a gallon. At the same time, supermarkets in California are selling Evian brand bottled water for $4.99 to $7.55 a gallon!

How can that be? How can water, which is simply filtered and poured into bottles, cost up to 5 1/2 times as much as oil? (If oil is "black gold", what should we call bottled water?) In contrast, the sticky black liquid is pumped up from below ground, at great expense, in some foreign land that is left polluted and contaminated by the oil operations. As likely as not, indigenous people have been displaced in the process. The crude oil may then have to travel along a pipeline that was very expensive to construct, and which caused the displacement of more indigenous peoples as well as more environmental damage. The crude oil is then transported at further expense across the oceans in oil tankers that regularly cause devastating oil spills, fouling coastlines and destroying fishing grounds. Next, it is refined in some huge petrochemical plant that pollutes the air and causes cancers in the local population. Finally, it is transported yet again at great expense by more tankers and trucks before finally arriving at some gasoline vending machine near you. And if all that is not enough, the burning of oil causes another set of serious environmental and health problems - global warming, air pollution, acid rain, asthma, etc. Yet it is less expensive to buy than bottled water?!

One reason that gasoline is so cheap is because we subsidize the oil industry to the tune of $86 billion a year. It is the most subsidized, most profitable and yet least taxed industry in the world. That $86 billion does not even include the immense cost of maintaining the massive military machine required to defend our access to large reserves of oil.

For whatever reasons - profit, greed, terminal shortsightedness, boundless stupidity, advanced brain decay - our exalted leaders have chosen to peg our future to the almighty hydrocarbon molecule. They could choose instead to utilize the considerable financial and technological assets of this country to develop sustainable/renewable energy sources, but now the White House brain trust has decided instead to use that great potential to crush the citizenry of Iraq and steal their oil.

I could take the time to painstakingly dissect and refute every reason that the Bush-Cheney Oilygarchy has put forth for going to war against Iraq, but the lies and obfuscations of Bush, Cheney, Rumsfeld, and Powell have already been exposed over and over by many writers with a far better grasp of our history with Iraq than I possess. (A quick check of the Common Dreams website - - will reveal a large collection of essays on that topic.) Besides, as Daniel Ellsberg writes, "You don't have to be an ichthyologist to know when a fish stinks." I will instead list some of the more significant oil facts, connections, and history in regard to Iraq.

1. The US leads the world in oil consumption, accounting for about 25% of the world total. In 2000 the US consumed nearly 20 million barrels of oil per day, almost three gallons per person per day, twice as high as in Europe. More than half of that oil (10.4 million barrels per day net) came from imports. Imports from the Persian Gulf in 2000 were 2.5 million barrels per day, which amounts to 12.6% of U.S. consumption. At the beginning of January 2003 the US Dept. of Energy announced that by 2025 oil imports will account for perhaps 70% of US domestic oil use. According to Dick Cheney's energy policy, that could mean imports of 17 million barrels per day. The bulk of future oil imports will have to come from the Persian Gulf region.

2. Iraq holds more than 112 billion barrels of oil, the world's second largest proven reserves (after Saudi Arabia), representing about 11% of the world total. Many experts believe that Iraq has even more unproven reserves that could bring the figure up to almost 25% of the world total. Iraq also contains 110 trillion cubic feet of natural gas.

3. In 1972 Saddam Hussein and his Ba'ath party began taking steps to gain greater control of Iraq's oil, including the nationalization of the Iraq Petroleum Company. Previous to this, US and British oil companies had a 75% share in Iraq's oil production. In an attempt to force Hussein to re-privatize oil production, the US and Great Britain launched an embargo of Iraq. A year later the 11 members of OPEC agreed to pricing solidarity, forcing oil importing countries to pay dramatically more for oil. The OPEC cartel gained the upper hand in negotiating with western oil companies and insulated Iraq from economic attack.

4. In 1977, US National Security Advisor Zbigniew Brzezinski met with Saddam Hussein, the Emir of Kuwait, and a Saudi representative, to propose that Iraq invade Iran, seizing the Khuzestan oil fields.

5. During the latter years of the Iran-Iraq War, Kuwait moved its border 90 miles north, annexing approximately 900 square miles of the Rumailah oil field in southern Iraq. In this newly-acquired territory the Sante Fe Drilling Co., a US company whose board chair was Brent Scowcroft (national security adviser under Presidents Gerald Ford and George H.W. Bush), began slant drilling into the 95% of the Rumailah oil field still lying within Iraq. This was one of the important reasons behind Iraq's August 1990 invasion of Kuwait.

6. The US consumption of Iraqi oil increased by 24 % in January 2003 in response to the two-month strike in Venezuela that slashed that country's supply of oil to the international market. The US share of official Iraqi crude exports in the UN-monitored oil-for-food program has risen from 58 percent of Iraq's crude shipped in December to 67 percent - an average of 1.15 million barrels per day.

7. The US ranks first in the corporate oil sector, with the United Kingdom second, and these two countries are the headquarters of the world's four largest oil companies. Not coincidentally, these are also the two countries leading the push for a war against Iraq.

8. At least 41 top officials in the Bush-Cheney Oilygarchy have close ties to the oil industry, including Bush and Cheney themselves. This is the closest relationship between a US administration and the oil industry in American history.

9. The US National Energy Policy Report of 2001, authored by Vice President Cheney, placed a high a priority on easing US access to Persian Gulf oil reserves.

10. Iraq currently exports about 4% of the oil exported on world markets, amounting to about 1.7 million barrels a day in January 2003. With the US in control of Iraq's oil, production would likely be boosted to 3-5 million barrels a day. Some oil industry analysts think that five years from now Iraq could be producing up to 10 million barrels of oil per day. This would likely break the back of OPEC. According to a report in The Observer by Peter Beaumont and Faisal Islam, the true aim of the Bush Administration appears to be the destruction of OPEC, which is viewed as incompatible with American interests, i.e. the perceived right to an unlimited supply of cheap oil. The current slump in the US economy is blamed in part on what are perceived as high oil prices.

11. In an article titled "Oil Iraq and America" published in the Dec. 16, 2002 issue of The Nation, Dilip Hiro reported, "The process of non-American oil and gas corporations acquiring stakes in Iraq's bountiful hydrocarbons got going in the spring of 1997, after the UN's oil-for-food scheme, introduced the previous December, brought relief to Iraqis and restored confidence in the durability of the Saddam regime in the international community (apart from the US-British alliance).
"A consortium of Russian companies, led by the state-owned Lukoil, took a 75 percent share (with the state-owned Iraq National Oil Company taking 25 percent) of a joint corporation to develop the West Qurna oilfield in southern Iraq, which holds 11 billion barrels--a third of the total US oil reserves--and extract oil over the next twenty-three years. Then came the China National Petroleum Corporation and its agreement to develop the Adhab oilfield.
"Their lead was followed by Total Societe Anonyme of France (now TotalFinaElf), which agreed to develop Nahr Omar oilfield in the south - almost as bountiful as the West Qurna. Then Ranger Oil of Canada secured a $250 million contract for field development and exploration in the Western Desert, followed by India's Oil & Natural Gas Corporation and Reliance Petroleum's signing of a deal to develop the Tuba oilfield." A Spanish oil company also has a contract with Baghdad. According to the International Energy Agency's World Energy Outlook 2001, the total value of these foreign contracts could reach $1.1 trillion.

12. In January 16, 2003 The Wall Street Journal quoted oil industry officials saying that the Bush administration is eager to rehabilitate the Iraqi oil industry. According to the officials, Vice President Cheney's staff held a meeting in October with Exxon Mobil Corporation, ChevronTexaco Corporation, ConcocoPhilips, Slumberger and Haliburton, but both the US administration and the companies deny it. Larry Goldstein, president of the Petroleum Industry Research Foundation told The Wall Street Journal, "If we go to war, it's not about oil. But the day the war ends, it has everything to do with oil."

13. In December 2002 the Pentagon disclosed that if we go to war against Iraq, they plan to secure and protect Iraq's oilfields "as rapidly as possible."

14. However, the leader of the U.S.-backed Iraqi National Congress, Ahmed Chalabi, has told the Bush Administration that if Saddam is ousted, an INC-led government would not honor such contracts. As a reward for removing Saddam Hussein, “American companies will have a big shot at Iraqi oil,” he said. One can only wonder at what deals the US may cut with these other countries in exchange for their support in ousting Saddam Hussein.
As far back as October, Ahmed Chalabi began meeting with executives of US oil corporations to begin negotiating the carve-up of Iraq's massive oil reserves in a post-Saddam Iraq. In the words of one oil industry analyst, "There's not an oil company out there that wouldn't be interested in Iraq."

If we do attack Iraq and successfully remove Saddam Hussein from power, it will likely prove to be the biggest oil grab in modern history, providing hundreds of billions of dollars in revenue to US oil firms, many with links to senior officials in the Bush-Cheney Oilygarchy. But remember, if it comes to war, the blame will not lie solely with the Bush-Cheney Oilygarchy and the oil corporations. We all play a critical role in these affairs as it is our extremely consumptive and wasteful lifestyle that drives their search for oil profits. THIS IS A KEY POINT! Until we come to terms with that and begin to make significant changes in the American lifestyle, we can expect more oil wars to come.