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Greg Muttitt: Whatever Happened to Iraqi Oil?

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This article originally appeared at TomDispatch.com. To receive TomDispatch in your inbox three times a week, click here.

 

It was never exactly rocket science.  You didn't have to be Einstein to figure it out.  In early 2003, the Bush administration was visibly preparing to invade Iraq, a nation with a nasty ruler who himself hadn't hesitated to invade another country, Iran, in the early 1980s for no purpose except self-aggrandizement.  (And the Reagan administration had backed him in that disastrous war because then, as now, Washington loathed the Iranians.)  There was never the slightest evidence of the involvement of Saddam Hussein's regime in the 9/11 attacks or in support of al-Qaeda; and despite the Bush administration's drumbeat of supposed information about Saddam's nuclear program (which was said, somehow, to threaten to put mushroom clouds over American cities), the evidence was always, at best, beyond thin and at worst, a potage of lies, concoctions, and wishful thinking. The program, of course, proved nonexistent, but too late to matter.

There was only one reason to invade Iraq and it could be captured in a single word, "oil," even if George W. Bush and his top officials generally went out of their way to avoid mentioning it.  (At one point, post-invasion, Deputy Secretary of Defense Paul Wolfowitz did point out that Iraq was indeed afloat "on a sea of oil.")  Unfortunately, oil as a significant factor in invasion planning was considered far too simpleminded for the sophisticated pundits and reporters of the mainstream media.  They were unimpressed by it even when, as the looting began in Baghdad, it turned out that U.S. troops only had orders to guard the Oil Ministry and Interior Ministry (which housed Saddam's dreaded secret police).

Mind you, far more than Iraqi oil was in the administration's crosshairs, though that country, with its then-crippled energy sector, was considered a giant oil reservoir just waiting for Big Oil to set it free.  To conquer and garrison -- "liberate" -- Iraq would put the U.S. in a position of ultimate domination in the oil heartlands of the planet, or so thought the top officials of the Bush administration, a number of whom had been in or associated with the energy business before scaling the heights of Washington. As Dick Cheney put it to the Institute of Petroleum Engineers in 1999, when he was still running the energy company Halliburton, "The Middle East, with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies."

And the millions of protestors who took to the streets of the great cities (and small towns) of the planet in unprecedented numbers to oppose the coming invasion, waving signs like "No Blood for Oil!" "How did USA's oil get under Iraq's sand?" and "Don't trade lives for oil!" grasped perfectly well just what they had in mind -- and more prescient still, they knew it would be a disaster.  If only they had been listened to.  Instead, they were generally dismissed in the mainstream media for their hopeless naïvete.

They were right.  It was about oil (though not oil alone, given the over-determined nature of all events on this planet of ours), while so many of the sophisticated types as well as the geopolitical visionaries of the Bush administration proved dismally wrong, completely mistaken in their assessment of our world of energy and how it might be controlled.  Now, more than eight years later, no one here even wants to think about Iraq and the multi-trillion-dollar war we fought there.  Mission accomplished?  You be the judge.  Recent headlines indicate that the new Iraq is actually helping Iran evade the Obama administration's oil sanctions.  Think of it as the grim geopolitical version of slapstick comedy.

As it happens, it took slightly longer than the disastrous invasion, occupation, and retreat from Iraq for a book to finally be published that actually focuses on oil as the pivotal commodity in America's debacle there. I'm talking about Greg Muttitt's new book, Fuel on the Fire: Oil and Politics in Occupied Iraq. For all those of you who marched in the global streets, holding signs warning Bush and his cronies not to do it, this is the book that tells the story of just exactly how right you were. Tom

Mission Accomplished for Big Oil?
How an American Disaster Paved the Way for Big Oil's Rise -- and Possible Fall -- in Iraq
By Greg Muttitt

In 2011, after nearly nine years of war and occupation, U.S. troops finally left Iraq. In their place, Big Oil is now present in force and the country's oil output, crippled for decades, is growing again. Iraq recently reclaimed the number two position in the Organization of the Petroleum Exporting Countries (OPEC), overtaking oil-sanctioned Iran. Now, there's talk of a new world petroleum glut. So is this finally mission accomplished?

Well, not exactly. In fact, any oil company victory in Iraq is likely to prove as temporary as George W. Bush's triumph in 2003. The main reason is yet another of those stories the mainstream media didn't quite find room for: the role of Iraqi civil society. But before telling that story, let's look at what's happening to Iraqi oil today, and how we got from the "no blood for oil" global protests of 2003 to the present moment.

Here, as a start, is a little scorecard of what's gone on in Iraq since Big Oil arrived two and a half years ago: corruption's skyrocketed; two Western oil companies are being investigated for either giving or receiving bribes; the Iraqi government is paying oil companies a per-barrel fee according to wildly unrealistic production targets they've set, whether or not they deliver that number of barrels; contractors are heavily over-charging for drilling wells, which the companies don't mind since the Iraqi government picks up the tab.

Meanwhile, to protect the oil giants from dissent and protest, trade union offices have been raided, computers seized and equipment smashed, leaders arrested and prosecuted. And that's just in the oil-rich southern part of the country. 

In Kurdistan in the north, the regional government awards contracts on land outside its jurisdiction, contracts which permit the government to transfer its stake in the oil projects -- up to 25% -- to private companies of its choice. Fuel is smuggled across the border to the tune of hundreds of tankers a day.

In Kurdistan, at least the approach is deliberate: the two ruling families of the region, the Barzanis and Talabanis, know that they can do whatever they like, since their Peshmerga militia control the territory. In contrast, the Iraqi federal government of Prime Minister Nouri al-Maliki has little control over anything. As a result, in the rest of the country the oil industry operates, gold-rush-style, in an almost complete absence of oversight or regulation.

Oil companies differ as to which of these two Iraqs they prefer to operate in. BP and Shell have opted to rush for black gold in the super-giant oilfields of southern Iraq. Exxon has hedged its bets by investing in both options. This summer, Chevron and the French oil company Total voted for the Kurdish approach, trading smaller oil fields for better terms and a bit more stability.

Keep in mind that the incapacity of the Iraqi government is hardly limited to the oil business: stagnation hangs over its every institution. Iraqis still have an average of just five hours of electricity a day, which in 130-degree heat causes tempers to boil over regularly. The country's two great rivers, the Tigris and Euphrates, which watered the cradle of civilization 5,000 years ago, are drying up.  This is largely due to the inability of the government to engage in effective regional diplomacy that would control upstream dam-building by Turkey.

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Tom Engelhardt, who runs the Nation Institute's Tomdispatch.com ("a regular antidote to the mainstream media"), is the co-founder of the American Empire Project and, most recently, the author of Mission Unaccomplished: Tomdispatch Interviews (more...)
 

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