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Iraq oil deals fulfill Cheney's
goals
Jason Leopold
Online
Journal
Thursday, July 3, 2008
Two years before the invasion of Iraq, oil executives and foreign
policy advisers told the Bush administration that the United States
would remain “a prisoner of its energy dilemma” as
long as Saddam Hussein was in power.
That April 2001 report, “Strategic Policy Challenges for
the 21st Century,” was prepared by the James A. Baker Institute
for Public Policy and the U.S. Council on Foreign Relations at
the request of Vice President Dick Cheney.
In retrospect, it appears that the report helped focus administration
thinking on why it made geopolitical sense to oust Hussein, whose
country sat on the world’s second largest oil reserves.
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“Iraq remains a de-stabilizing influence to the flow of
oil to international markets from the Middle East,” the
report said.
“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 Therefore the U.S. should conduct an
immediate policy review toward Iraq including military, energy,
economic and political/diplomatic assessments.”
The advisory committee that helped prepare the report included
Luis Giusti, a Shell Corp. non-executive director; John Manzoni,
regional president of British Petroleum; and David O'Reilly, chief
executive of ChevronTexaco.
Those companies now stand to earn tens of billions of dollars
in no-bid contracts in a U.S.-brokered deal that was recently
announced to drill Iraq’s untapped oil fields.
James Baker, the namesake for the public policy institute, was
a prominent oil industry lawyer who also served as secretary of
state under President George H.W. Bush and was counsel to the
Bush/Cheney campaign during the Florida recount in 2000.
Ken Lay, then chairman of the energy-trading Enron Corp., also
made recommendations that were included in the Baker report.
At the time of the report, Cheney was leading an energy task
force made up of powerful industry executives who assisted him
in drafting a comprehensive “National Energy Policy”
for President George W. Bush.
A focus on oil
It was believed then that Cheney’s secretive task force
was focusing on ways to reduce environmental regulations and fend
off the Kyoto protocol on global warming.
But Bush’s first treasury secretary, Paul O’Neill,
later described a White House interest in invading Iraq and controlling
its vast oil reserves, dating back to the first days of the Bush
presidency.
In Ron Suskind’s 2004 book, The Price of Loyalty, O’Neill
said an invasion of Iraq was on the agenda at the first National
Security Council (NSC) meeting. There was even a map for a post-war
occupation, marking out how Iraq’s oil fields would be carved
up.
At that early date, the message from Bush was “find a way
to do this,” according to O’Neill, a critic of the
Iraq invasion who was forced out of his job in December 2002.
The New Yorker’s Jane Mayer later made another discovery:
a secret NSC document dated Feb. 3, 2001 -- only two weeks after
Bush took office -- instructing NSC officials to cooperate with
Cheney’s task force, which was “melding” two
previously unrelated areas of policy: “the review of operational
policies towards rogue states” and “actions regarding
the capture of new and existing oil and gas fields.” [The
New Yorker, Feb. 16, 2004]
By March 2001, Cheney’s task force had prepared a set of
documents with a map of Iraqi oilfields, pipelines, refineries
and terminals, as well as two charts detailing Iraqi oil and gas
projects, and a list titled “Foreign Suitors for Iraqi Oilfield
Contracts,” according to information released in July 2003
under a Freedom of Information Act lawsuit filed by the conservative
watchdog group, Judicial Watch.
A Commerce Department spokesman issued a brief statement when
those documents were released stating that Cheney’s energy
task force "evaluated regions of the world that are vital
to global energy supply."
There has long been speculation that a key reason why Cheney
fought so hard to keep his task force documents secret was that
they may have included information about the administration’s
plans toward Iraq.
‘Conspiracy theory’
However, both before and after the invasion, much of the U.S.
political press treated the notion that oil was a motive for invading
Iraq in March 2003 as a laughable conspiracy theory.
Generally, business news outlets were much more frank about the
realpolitik importance of Iraq’s oil fields.
For instance, Ray Rodon, a former executive at Halliburton, the
oil-service giant that Cheney once headed, said he was dispatched
to Iraq in October 2002 to assess the country’s oil infrastructure
and map out plans for operating Iraq’s oil industry, according
to an April 14, 2003, story in Fortune magazine.
“From behind the obsidian mirrors of his wraparound sunglasses,
Ray Rodon surveys the vast desert landscape of southern Iraq's
Rumailah oilfield,” Fortune’s story said. “A
project manager with Halliburton's engineering and construction
division, Kellogg Brown & Root, Rodon has spent months preparing
for the daunting task of repairing Iraq's oil industry.”
“Working first at headquarters in Houston and then out
of a hotel room in Kuwait City, he has studied the intricacies
of the Iraqi national oil company, even reviewing the firm's organizational
charts so that Halliburton and the Army can ascertain which Iraqis
are reliable technocrats and which are Saddam loyalists.”
At about the same time as Rodon’s trip to Iraq -- October
2002 -- Oil and Gas International, an industry publication, reported
that the State Department and the Pentagon had put together pre-war
planning groups that focused heavily on protecting Iraq’s
oil infrastructure.
The next month, November 2002, the Department of Defense recommended
that the Army Corps of Engineers award a contract to Kellogg,
Brown & Root to extinguish Iraqi oil well fires.
The contract also called for “assessing the condition of
oil-related infrastructure; cleaning up oil spills or other environmental
damage at oil facilities; engineering design and repair or reconstruction
of damaged infrastructure; assisting in making facilities operational;
distribution of petroleum products; and assisting the Iraqis in
resuming Iraqi oil company operations.”
In January 2003, as President Bush was presenting the looming
war with Iraq as necessary to protect Americans, the Wall Street
Journal reported that oil industry executives met with Cheney's
staff to plan the post-war revival of Iraq's oil industry.
“Facing a possible war with Iraq, U.S. oil companies are
starting to prepare for the day when they may get a chance to
work in one of the world's most oil-rich countries,” the
Journal reported on Jan. 16, 2003.
“Executives of U.S. oil companies are conferring with officials
from the White House, the Department of Defense and the State
Department to figure out how best to jump-start Iraq's oil industry
following a war, industry officials say.
“The Bush administration is eager to secure Iraq's oil
fields and rehabilitate them, industry officials say. They say
Mr. Cheney's staff hosted an informational meeting with industry
executives in October [2002], with Exxon Mobil Corp., ChevronTexaco
Corp., ConocoPhillips and Halliburton among the companies represented.
“Both the Bush administration and the companies say such
a meeting never took place. Since then, industry officials say,
the Bush administration has sought input, formally and informally,
from executives and industry experts on how best to overhaul Iraq's
oil sector.”
Guarding the Oil Ministry
Despite the Bush administration’s denials about oil as
a motivation for war, the Bush administration’s focus on
Iraqi oil was firmly set.
On April 5, 2003, Reuters reported that the State Department's
“Future of Iraq” project headed by Thomas Warrick,
special adviser to the assistant secretary of state for Near Eastern
Affairs, held its fourth meeting of the oil and energy-working
group.
Documents obtained by Reuters showed that “a clear consensus
among expert opinion favoring production-sharing agreements to
attract the major oil companies.”
“That is likely to thrill oil companies harboring hopes
of lucrative contracts to develop Iraqi oil reserves,” the
news agency reported. “Short-term rehabilitation of southern
Iraqi oil fields already is under way, with oil well fires being
extinguished by U.S. contractor Kellogg Brown and Root . . .
“Long-term contracts are expected to see U.S. companies
ExxonMobil, ChevronTexaco and ConocoPhillips compete with Anglo-Dutch
Shell, Britain's BP, TotalFinaElf of France, Russia's LUKOIL and
Chinese state companies.”
After U.S. troops captured Baghdad in April 2003, they were ordered
to protect the Oil Ministry even as looters ransacked priceless
antiquities from Iraq’s national museums and stole explosives
from unguarded military arsenals.
Now, the long-held dreams of U.S. dominance over the Iraqi oil
spigot seem close to fulfillment.
Last weekend, The New York Times reported that State and Commerce
department officials have been secretly working with Iraq’s
Oil Ministry in drawing up contracts between the Iraqi government
and Western oil companies to develop Iraq’s oil fields.
Unacceptable options
This outcome for U.S. and other Western oil companies now appears
to have been foretold by the Baker Institute report more than
seven years ago.
In April 2001, the report laid out a series of unacceptable options,
including helping Iraq under Saddam Hussein extract more oil by
easing embargoes that were meant to hem Hussein in.
“The U.S. could consider reducing restrictions on oil investment
inside Iraq,” the report said. But if Hussein’s “access
to oil revenues was to be increased by adjustments in oil sanctions,
Saddam Hussein could be a greater security threat to U.S. allies
in the region if weapons of mass destruction, sanctions, weapons
regimes and the coalition against him are not strengthened.”
Iraq is a “key swing producer turning its taps on and off
when it has felt such action was in its strategic interest,”
the report said, adding that there even was a ''possibility that
Saddam Hussein may remove Iraqi oil from the market for an extended
period of time'' in order to drive up prices.
“Under this scenario, the United States remains a prisoner
of its energy dilemma, suffering on a recurring basis from the
negative consequences of sporadic energy shortages,” the
report said. “These consequences can include recession,
social dislocation of the poorest Americans, and at the extremes,
a need for military intervention.”
The report recommended Cheney move swiftly to integrate energy
and national security policy as a means to stop ''manipulations
of markets by any state” and suggested that his task force
include “representation from the Department of Defense.”
“Unless the United States assumes a leadership role in
the formation of new rules of the game,'' the report said, ''U.S.
firms, U.S. consumers and the U.S. government [will be left] in
a weaker position.”
Two years after the Baker report, the United States -- along
with Great Britain and other allies -- invaded Iraq. Now, more
than five years after that, with Hussein dead and a U.S. expeditionary
force still occupying Iraq, the U.S. oil industry finally appears
to be in a strong position relative to Iraq’s oil riches.
However, the price that has been paid by American troops, Iraqi
civilians and the U.S. taxpayers has been enormous.
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BECAUSE THERE'S A WAR ON FOR YOUR MIND
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