It's The Oil

[j.d.walker]

On Oct 22, 9:34 pm, therm... at india.com wrote:
> Hiroshima,Nagasaki,Genocide in Australia and North America
>
> http://countercurrents.org/holt221007.htm
>
> It's The Oil
>
> By Jim Holt
>
> 22 October, 2007
> London Review Of Books
>
> Iraq is 'unwinnable', a 'quagmire', a 'fiasco': so goes the received
> opinion. But there is good reason to think that, from the Bush-Cheney
> perspective, it is none of these things. Indeed, the US may be 'stuck'
> precisely where Bush et al want it to be, which is why there is no
> 'exit strategy'.
>
> Iraq has 115 billion barrels of known oil reserves. That is more than
> five times the total in the United States. And, because of its long
> isolation, it is the least explored of the world's oil-rich nations. A
> mere two thousand wells have been drilled across the entire country;
> in Texas alone there are a million. 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.
>
> Who will get Iraq's oil? One of the Bush administration's 'benchmarks'
> for the Iraqi government is the passage of a law to distribute oil
> revenues. The draft law that the US has written for the Iraqi congress
> would cede nearly all the oil to Western companies. 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. 'The foreign companies
> would not have to invest their earnings in the Iraqi economy,' the
> analyst Antonia Juhasz wrote in the New York Times in March, after the
> draft law was leaked. 'They could even ride out Iraq's current
> "instability" by signing contracts now, while the Iraqi government is
> at its weakest, and then wait at least two years before even setting
> foot in the country.' As negotiations over the oil law stalled in
> September, the provincial government in Kurdistan simply signed a
> separate deal with the Dallas-based Hunt Oil Company, headed by a
> close political ally of President Bush.
>
> 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. Although few of the 20,000 American
> troops stationed there have ever had any contact with an Iraqi, the
> runway at the base is one of the world's busiest. 'We are behind only
> Heathrow right now,' an air force commander told Ricks.
>
> The Defense Department was initially coy about these bases. In 2003,
> Donald Rumsfeld said: 'I have never, that I can recall, heard the
> subject of a permanent base in Iraq discussed in any meeting.' But
> this summer the Bush administration began to talk openly about
> stationing American troops in Iraq for years, even decades, to come.
> Several visitors to the White House have told the New York Times that
> the president himself has become fond of referring to the 'Korea
> model'. When the House of Representatives voted to bar funding for
> 'permanent bases' in Iraq, the new term of choice became 'enduring
> bases', as if three or four decades wasn't effectively an eternity.
>
> But will the US be able to maintain an indefinite military presence in
> Iraq? It will plausibly claim a rationale to stay there for as long as
> civil conflict simmers, or until every groupuscule that conveniently
> brands itself as 'al-Qaida' is exterminated. The civil war may
> gradually lose intensity as Shias, Sunnis and Kurds withdraw into
> separate enclaves, reducing the surface area for sectarian friction,
> and as warlords consolidate local authority. De facto partition will
> be the result. But this partition can never become de jure. (An
> independent Kurdistan in the north might upset Turkey, an independent
> Shia region in the east might become a satellite of Iran, and an
> independent Sunni region in the west might harbour al-Qaida.)
> Presiding over this Balkanised Iraq will be a weak federal government
> in Baghdad, propped up and overseen by the Pentagon-scale US embassy
> that has just been constructed - a green zone within the Green Zone.
> As for the number of US troops permanently stationed in Iraq, the
> defence secretary, Robert Gates, told Congress at the end of September
> that 'in his head' he saw the long-term force as consisting of five
> combat brigades, a quarter of the current number, which, with support
> personnel, would mean 35,000 troops at the very minimum, probably
> accompanied by an equal number of mercenary contractors. (He may have
> been erring on the side of modesty, since the five super-bases can
> accommodate between ten and twenty thousand troops each.) These forces
> will occasionally leave their bases to tamp down civil skirmishes, at
> a declining cost in casualties. As a senior Bush administration
> official told the New York Times in June, the long-term bases 'are all
> places we could fly in and out of without putting Americans on every
> street corner'. But their main day-to-day function will be to protect
> the oil infrastructure.
>
> This is the 'mess' that Bush-Cheney is going to hand on to the next
> administration. What if that administration is a Democratic one? Will
> it dismantle the bases and withdraw US forces entirely? That seems
> unlikely, considering the many beneficiaries of the continued
> occupation of Iraq and the exploitation of its oil resources. The
> three principal Democratic candidates - Hillary Clinton, Barack Obama
> and John Edwards - have already hedged their bets, refusing to promise
> that, if elected, they would remove American forces from Iraq before
> 2013, the end of their first term.
>
> Among the winners: oil-services companies like Halliburton; the oil
> companies themselves (the profits will be unimaginable, and even
> Democrats can be bought); US voters, who will be guaranteed price
> stability at the gas pump (which sometimes seems to be all they care
> about); Europe and Japan, which will both benefit from Western control
> of such a large part of the world's oil reserves, and whose leaders
> will therefore wink at the permanent occupation; and, oddly enough,
> Osama bin Laden, who will never again have to worry about US troops
> profaning the holy places of Mecca and Medina, since the stability of
> the House of Saud will no longer be paramount among American concerns.
> Among the losers is Russia, which will no longer be able to lord its
> own energy resources over Europe. Another big loser is Opec, and
> especially Saudi Arabia, whose power to keep oil prices high by
> enforcing production quotas will be seriously compromised.
>
> Then there is the case of Iran, which is more complicated. In the
> short term, Iran has done quite well out of the Iraq war. Iraq's
> ruling Shia coalition is now dominated by a faction friendly to
> Tehran, and the US has willy-nilly armed and trained the most pro-
> Iranian elements in the Iraqi military. As for Iran's nuclear
> programme, neither air strikes nor negotiations seem likely to derail
> it at the moment. 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 think of the United States vis-à-vis China. As a consequence of
> our trade deficit, around a trillion dollars' worth of US denominated
> debt (including $400 billion in US Treasury bonds) is held by China.
> This gives Beijing enormous leverage over Washington: by offloading
> big chunks of US debt, China could bring the American economy to its
> knees. China's own economy is, according to official figures,
> expanding at something like 10 per cent a year. Even if the actual
> figure is closer to 4 or 5 per cent, as some believe, China's
> increasing heft poses a threat to US interests. (One fact: China is
> acquiring new submarines five times faster than the US.) 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.
>
> Many people are still perplexed by exactly what moved Bush-Cheney to
> invade and occupy Iraq. In the 27 September issue of the New York
> Review of Books, Thomas Powers, one of the most astute watchers of the
> intelligence world, admitted to a degree of bafflement. 'What's
> particularly odd,' he wrote, 'is that there seems to be no
> sophisticated, professional, insiders' version of the thinking that
> drove events.' Alan Greenspan, in his just published memoir, is
> clearer on the matter. 'I am saddened,' he writes, 'that it is
> politically inconvenient to acknowledge what everyone knows: the Iraq
> war is largely about oil.'
>
> Was the strategy of invading Iraq to take control of its oil resources
> actually hammered out by Cheney's 2001 energy task force? One can't
> know for sure, since the deliberations of that task force, made up
> largely of oil and energy company executives, have been kept secret by
> the administration on the grounds of 'executive privilege'. One can't
> say for certain that oil supplied the prime motive. But the hypothesis
> is quite powerful when it comes to explaining what has actually
> happened in Iraq. 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. In terms of
> realpolitik, the invasion of Iraq is not a fiasco; it is a resounding
> success.
>
> Still, there is reason to be sceptical of the picture I have drawn: it
> implies that a secret and highly ambitious plan turned out just the
> way its devisers foresaw, and that almost never happens.
>
> Jim Holt writes for the New York Times Magazine and the New Yorker.