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Mapping The Oil Motive


What role did oil play in the U.S. decision to invade Iraq?  If oil did play a significant role, what, exactly, did President Bush and his associates hope to accomplish in this regard? To what degree did they succeed? These are questions that will no doubt occupy analysts for many years to come, but that can and should be answered now — as the American people debate the validity of the invasion and Bush administration gears up for a possible war against Iran under circumstances very similar to those prevailing in Iraq in early 2003.

 

In addressing these questions, it should be noted that the U.S. invasion of Iraq was a matter of choice, not of necessity. The United States did not act in response to an aggressive move by a hostile power directed against this country or one of its allies, but rather employed force on its own volition to advance (what the administration viewed as) U.S. national interests. This means that we cannot identify a precipitating action for war, but instead must examine the calculus of costs and benefits that persuaded President Bush to invade Iraq at that particular moment.  On one side of this ledger were the disincentives to war: the loss of American lives, the expenditure of vast sums of money and the alienation of America’s allies.  To outweigh these negatives, and opt for war, would require powerful incentives. But what were they? This is the question that has so bedeviled pundits and analysts since the onset of combat.

 

It is highly doubtful that any one factor tipped the balance toward invasion.  A war of choice is rarely precipitated by a single objective, but rather stems from a combination of contributing factors.  In this case, many come to mind: legitimate concern over Saddam Hussein’s weapons of mass destruction; an inclination to demonstrate the effectiveness of the administration’s “pre-emptive” war doctrine; increased security for Israel; the promotion of democracy in the Middle East; U.S. domination of the Persian Gulf region; and a thirst for Iraqi oil.  All of these, and possibly others, are likely to have figured to some degree in the president’s decision to invade.  What is difficult is to ascertain is how these factors were ranked in the administration’s calculus; what we can do, however, is to put them into some sort of context, to show how they formed an overpowering nexus of motives that outweighed the disincentives to war. And here, oil proves essential.

 

The starting point for such an assessment is the locale for this war: the Persian Gulf region, home to two-thirds of the world’s known oil reserves.  For more than 40 years, U.S. foreign policy has been guided by America’s growing dependence on oil supplies from the Middle East. Embraced by both Republicans and Democrats, this policy is known as the Carter doctrine because it was articulated most clearly by President Jimmy Carter in 1980.

 

Presidents Reagan, Bush 41 and Clinton have all acted under the banner of the Carter Doctrine: supporting Iraq during the Iran-Iraq war (1980-88), opposing Iraq by liberating Kuwait in 1991, imposing sanctions and no-fly zones between 1991 and 2003. As I described in the December issue of The Progressive, Bush and the neocons used the banner of the war on terror after 9/11 to massively expand American capacity to employ force in the pursuit of global oil reserves.

 

Setting The Stage For War

 

When George W. Bush entered the White House in February 2001, Iraq was still under sanctions, and Saddam Hussein remained in power.  At this point, Bush ordered two major reviews of American policy: an assessment of the effectiveness of sanctions by then Secretary of State Colin Powell, and a review if U.S. energy policy by Vice President Dick Cheney. Although prompted by separate concerns — the survival of Saddam Hussein in one case, persistent energy shortages in the other — these two reviews both focused attention on developments in the Persian Gulf and together set the stage for the 2003 invasion of Iraq.

 

The first review, completed at some point in the late spring, concluded that sanctions had not only failed in their intended purpose of unseating Hussein, but had also strengthened his position by making it appear that the United States was victimizing the poor and downtrodden population of Iraq.  To make matters worse, Hussein appeared to be using the United Nation’s “oil for food” program to accumulate funds for the acquisition of arms and illicit weapons technology.

 

The second review, released as the National Energy Policy on May 17, 2001, also described a worrisome situation: domestic oil production in the United States was in irreversible decline at a time of soaring energy demand, and so the nation was becoming increasingly dependent on imported energy.  But while expressing concern over the dangers inherent in this situation, the authors of the report concluded that the United States had no choice but to increase its reliance on imports in order to fuel the nation’s cars and factories.  And because so much of the world’s remaining untapped petroleum lay in the Persian Gulf area, U.S. energy policy would have to concentrate on gaining greater access to these supplies.  “By any estimation, Middle East oil producers will remain central to world oil security,” the NEP affirmed.  Hence, “The Gulf will be a primary focus of U.S. international energy policy.

 

The NEP also made it clear that the existing oil infrastructure in the Persian Gulf was inadequate to produce the much higher levels of oil that would be needed to satisfy projected U.S. and international requirements in the years ahead. According to the 2001 edition of the Department of Energy’s International Energy Outlook, the Gulf countries would have to nearly double their combined output, from approximately 24 million barrel per day (mbd) to 45 million barrels, in order to meet anticipated world demand in 2020 — a Herculean task that exceeded the capacities of many of the region’s prevailing regimes, including those in Iran and Iraq.  Only if U.S. firms were allowed to come in and take over production in these Gulf countries, the NEP hinted, would it be possible to quench the world’s insatiable thirst for oil.

 

The two reviews thus reached several complementary conclusions: the sanctions regime was in disarray; Hussein continued to pose a threat to Persian Gulf security; the United States needed more Persian Gulf oil; and ways had to be found to insert U.S. oil firms into the region.  How, then, to reconcile all of these concerns?  In the end, only one option promised to secure all of these objectives: the forcible removal of Saddam Hussein and his replacement by a regime disposed to satisfy U.S. energy objectives.  And so, in late 2001 or early 2002, the administration decided to invade Iraq.

 

That these various factors were intertwined in the administration’s thinking is clearly evident from the most important speech given by Vice President Dick Cheney on the reasons for war, in an address before the Veterans of Foreign Wars on Aug. 25, 2002.  “Should all [of Hussein's WMD] ambitions be realized, the implications would be enormous,” he declared.  “Armed with an arsenal of these weapons of terror and a set atop 10 percent of the world’s oil reserves, Saddam Hussein could then be expected to seek domination of the entire Middle East, take control of a great portion of the world’s energy supplies, directly threaten America’s friends throughout the region, and subject the United States or any other nation to nuclear blackmail.”  From this perspective, inaction was unthinkable.

 

Hands In the Honeypot

 

Having decided to eliminate Hussein, the Bush administration set out to ensure that any successor regime would be predisposed to satisfy U.S. energy objectives.  Ahmad Chalabi, a former Iraqi banker who was being groomed by the Department of Defense to serve as Iraq’s future ruler, was encouraged to meet with representatives U.S. energy firms and arrange for their participation in the postwar rehabilitation of Iraq’s oil infrastructure.  “American companies will have a big shot at Iraqi oil,” he promised after one such meeting.  Meanwhile, the Working Group on Oil and Energy — a collection of expatriate Iraqi oil experts assembled by the Department of State — developed plans for the privatization of Iraq’s state-owned oil company and its acquisition by foreign firms.  And, to ensure that none of Iraq’s oil assets would be damaged by Saddam Hussein loyalists, the Pentagon assembled a special force to seize Iraqi oilfields at the very onset of hostilities.

 

And so the Bush administration went to war confidently, believing that it would both eliminate a major threat to Persian Gulf stability and ensure a substantial American role in the exploitation of Iraq’s prolific oil fields.  All was set for this favorable outcome in April 2003, when triumphant American forces occupied the Oil Ministry headquarters in downtown Baghdad, blithely ignoring the rampant looting taking place in surrounding areas.  But now, two years later, the situation appears far less promising.  We return, then, to our final question: To what extent did the administration achieve its intended objectives in Iraq?

 

Mission Accomplished?

 

Certainly, Saddam Hussein has been removed from office, and his ability to wreak havoc in the Gulf has been eliminated. The Iraqi National Oil Company (INOC) is now in the hands of American-installed technocrats, and some progress has been made toward restoring production to prewar levels.  But it is scarcely apparent that the Persian Gulf is more secure than it was two years ago, or that America’s ambitious oil objectives will ever be realized.  By failing to deploy sufficient numbers of ground troops in Iraq and imposing a modicum of civic order, the United States squandered its initial advantage and opened the space for a virulent insurgency and the emergence of ethnic and religious factionalism. This, in turn, has curtailed Iraq’s oil output and threatened to tear the INOC apart.

 

Looking at Iraq today, one can see several powerful impediments to the accomplishment of U.S. objectives:

 

* The insurgency has crippled Iraq’s capacity to export more oil.  When U.S. forces first entered Baghdad in April 2003, U.S. officials confidently spoke of boosting Iraq’s prewar production of 2.5 million barrels per day to 3 mbd in 2004 and 5-6 mbd by the end of this decade. Today, because of persistent sabotage of pipelines and refineries, Iraq is producing less oil than it did before the war — about 2 mbd.  In northern Iraq, insurgents have repeatedly bombed the main export pipeline to Turkey, taking it out of operation for months at a time; in the south, saboteurs have periodically crippled key pipelines and loading platforms, curtailing exports by sea.  The United States has spent billions of dollars to repair these facilities and to enhance security along the pipeline routes, all to no avail.  According to a recent report in Oil and Gas Journal , Iraqi output is expected to remain below prewar levels in 2005 and to begin a slow recovery in 2006 — but only if the security situation has improved by then.  And no one is willing to predict when, if ever, the country will reach the fabled level of 6 million barrels per day.

 

* Ethnic and religious antagonism between Kurds, Sunnis, and Shiites threatens to dismember the INOC .  When invading Iraq, the Bush administration assumed that a U.S.-installed government under Ahmad Chalabi would unify the country and quickly restore central government authority.  Now, the country is split into three more or less autonomous regions: a self-governing Kurdish enclave in the north; the beleaguered “Sunni Triangle” in the center; and the clerical-dominated Shiite zone in the south. Rather than bridge these divisions, the recent elections — widely touted as a victory for democracy — have tended to strengthen the forces of dissolution.  Each community is jockeying for political and economic advantage, with Iraq’s oil reserves as the major prize.  The Kurds, with one-fourth of the seats in the new national assembly, are demanding control over the Northern Oil Company (the INOC’s northern affiliate in Kirkuk) as the price for their participation in any future federal system; the Shiites, for their part, seek control over the Southern Oil Company in Basra; and many Sunnis, seeing themselves excluded from the possible division of Iraq’s oil wealth, appear inclined to support the continuing insurgency.  Under these circumstances, foreign oil companies are reluctant to invest in any major projects in Iraq, preferring to wait until the insurgency has been brought under control and the future status of the INOC has been decided — steps that may take years to accomplish.

 

* Insurgency and ethnic factionalism in Iraq threaten to destabilize the entire Persian Gulf region .  By invading Iraq and removing Saddam Hussein, the Bush administration sought to bring greater security to the Gulf area and thereby ensure the safe production of oil.  But while the removal of Hussein has eliminated one serious threat to Gulf security, the ensuing insurgency and ethnic disorder have introduced a whole new array of dangers.  By demonstrating a capacity to stand up to American military might and inflict significant U.S. casualties, the insurgents have emboldened Islamic jihadists in neighboring countries.  The resurgence of violent extremism in Saudi Arabia has been particularly striking, with a series of major terrorist strikes in Riyadh and in the oil centers of Khobar and Yanbu.  Meanwhile, the various armed bands in Iraq appear to be receiving financial aid from other countries, Iran in the case of the Shiite militias and Saudi Arabia in the case of the Sunnis.  And Turkey, with a large and restive Kurdish population of its own, has hinted at full-scale military intervention in northern Iraq if the Kurds establish an autonomous nation in that area.  Given these developments, it is very hard to argue that the Gulf is more secure today than it was in March 2003, before the war began.

 

When all is said and done, therefore, it appears that the U.S. incursion into Iraq — begun with such high expectations two years ago — has largely failed to achieve its intended purposes.  No weapons of mass destruction were ever found in Iraq, so the invasion cannot be said to have eliminated a potential WMD threat.  The danger posed by terrorism is no less severe now than it was in 2003, and in some cases has grown stronger.  It is true that democracy has made some inroads in Iraq, but it is not al all evident that elections will produce a stable, unified state.  And it is clear that Iraq is in no position to quench America’s voracious thirst for petroleum.

 

This assessment has obvious implications for many key aspects of U.S. foreign policy. For one thing, it casts considerable doubt on the utility of pre-emptive military action as a tool for promoting stability in unsettled regions like the Middle East — a conclusion that deserves close attention as we move closer to a possible war with Iran.  Many aspects of U.S. policy for postwar “nation building” also need to be re-examined.  But what is most evident is that the administration’s strategy of using military force to achieve its energy objectives in the Middle East is hopelessly flawed. Despite all the loss of human life, it appears highly unlikely that the major Gulf producers will achieve the 85 percent increase in daily petroleum output deemed essential to meet U.S. and international oil requirements in 2020, and so we should expect recurring oil shortages and price increases. Only by diminishing our day-to-day consumption of petroleum and demilitarizing our foreign energy policy can we hope to reduce our exposure to costly oil-supply disruptions in the Middle East and lower the risk of further bloodshed.

 

 

Michael T. Klare is a professor of peace and world security studies at Hampshire College and the author, most recently, of Blood and Oil: The Dangers and Consequences of America’s Growing Petroleum Dependency (Metropolitan Books).

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