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So was it a war for oil?
January 27th, 2014
By Greg Muttitt.
Tony Blair always did like to think of himself as a world statesman. I sometimes wonder whether he had an eye on Winston Churchill when he said of the Iraq War in 2003, “the oil conspiracy theory is honestly one of the most absurd”. Back in 1920, Churchill told parliament that the idea of an oil motive behind Britain´s Mesopotamia Campaign during the First World War was “too absurd for acceptance.
Six years earlier, as First Lord of the Admiralty, Churchill had championed the half-nationalisation of Anglo Persian Oil Company (later renamed BP) – which had recently found oil in Persia (now Iran) and was looking to expand into neighbouring Mesopotamia (Iraq) – in order to secure fuel for the Royal Navy´s battleship fleet. Just 11 days after the British state´s acquisition of 51% of Anglo Persian was approved, Archduke Franz Ferdinand was assassinated in Sarajevo.
Ok, it´s a little more complicated these days. Oil no longer flows through closed supply chains from a BP well to a BP forecourt, or from a British colony to the British military. Since the 1980s oil has been mostly traded on open markets, between any buyer and any seller. Nor is access to oil any more such a decisive factor in warfare, as any other army can buy it too. The result is that Western strategists are not so much trying to get oil into their own (or their own companies´) hands, but rather to maintain plentiful and cheap global supplies – as expensive oil can cripple their economies.
To that end, they aim to maximize foreign investment in oilfields, so as to boost the flow. At the time of the Iraq War, three quarters of the world´s oil was off-limits to the oil companies, as governments preferred to run their oil industries in-house, and their economies were not generally best served by pumping as fast as possible.
To me, fighting a war to break open a country´s oil industry to foreign investment sounds no more justified than fighting one to seize the oil as loot.
I still get asked ´So was it a war for oil?´ I find it a surprising question, as it´s no secret that Iraq has nearly a tenth of the world´s remaining oil, nor that the Persian Gulf region as a whole has nearly a half (and at the time of the war it was more like two thirds). It´s only because of the insistence with which our politicians (Donald Trump aside) denied any role for oil that it became a question at all. And perhaps those very denials stimulated suspicions of a bigger conspiracy than it was.
No, it was not some Cheneyesque masterplan that played out over the years. In fact the approach to oil changed several times – for example from outright privatization, to contracting by a US authority, to contacting by an Iraqi authority – and different people in the US and British governments disagreed on the details, such as whether to treat their own companies more favourably or whether to break OPEC.
But the strategic interests were certainly there. They were acknowledged in public documents – most famously Cheney´s 2001 energy task force report, which stated, “By any estimation, Middle East oil producers will remain central to world oil security. The Gulf will be a primary focus of U.S. international energy policy.” Private government documents spelled the interests out even more explicitly. I obtained the UK´s strategy for Iraqi oil, dated May 2003, which baldly stated that “The future shape of the Iraqi industry will affect oil markets, and the functioning of OPEC, in both of which we have a vital interest”.
And the governments certainly formulated plans to achieve those interests. In the months leading up to the war, both the State Department´s Future of Iraq Project and the Pentagon´sEnergy Infrastructure Planning Group worked out the details of a future Iraqi oil industry with foreign multinationals in charge.
In late 2002 and early 2003, BP and Shell held at least five meetings with the British government on the subject of Iraq. The minutes of one such meeting in the Foreign Office, in October 2002, began, “Iraq is the big oil prospect. BP are desperate to get in there.” In another meeting, Blair´s Trade Minister Baroness Symons said she believed that if Britain fought in the war, British oil companies deserved to get a share of the spoils, and she promised to lobby the US government to that effect. At the time the companies and government denied any such meetings happened; it took me a five-year struggle under the Freedom of Information Act to get hold of the minutes.
Then once the war had taken place, the US and UK worked hard throughout the occupation to turn Iraq over to Big Oil. This began with ensuring the right Iraqis were running the Oil Ministry, and writing the blueprint for the industry´s future. The Brits even hired a former BP executive to draft Iraq´s contracts to be signed with companies like BP! (That initiative failed).
In 2007, President Bush announced a surge of an extra 30,000 troops to be sent to Iraq. The surge is generally remembered (wrongly) as what turned things around in Iraq, ending the sectarian bloodshed and marking the first sensible US policymaking. At the time, even critics accepted at face value the claimed noble aims, and simply argued that it would not work in achieving them. They neglected the surge’s political purposes: firstly to shore up the US allies in the Iraqi government (many of whom were implicated in sectarian violence) and secondly to pressure them to deliver political “benchmarks”, most importantly to pass a law to restructure the Iraqi oil industry in favour of foreign oil companies.
Throughout 2007, on surprise visits to Baghdad by members of Bush’s national security team, it was the oil law that dominated discussions. During biweekly video conferences with Iraqi Prime Minister Maliki, Bush warned that U.S. patience had grown thin, and repeatedly pressed Maliki on the oil law. The US made threats (sec.1314) to cut off aid and reconstruction funds if the law were not passed, and even to remove Maliki from office.
In this approach, like many others, the US failed. The law was not passed, largely because of a popular Iraqi campaign against it. In the end, it was decided to sign long-term contracts even without any legal basis for doing so, and Iraq´s oil industry is now almost entirely run by companies like BP, Shell and ExxonMobil. These stories – the hidden stories of the war – are told in Fuel on the Fire.
So the US and UK had a motive for handing Iraq´s oil to multinational companies, and a series of plans for how to do so; they then consistently acted so as to achieve that end. Isn´t that enough to answer the question about whether it was a war for oil? Apparently not for some. The initiatives to bring in the oil companies were largely dressed up as being for the benefit of Iraqis, as of course they would need a modern oil industry with the advantages of investment and technology from the likes of ExxonMobil.
In the run-up to the war ten years ago, a popular cliché among policy-makers became that the war was not about oil, but the day after the war it would become all about oil. As if war hawks hadn´t noticed Iraq had all this oil, but once the war had taken place, they discovered it would conveniently be a good idea to bring in Big Oil.Perhaps they even believed it. After all, human beings are very capable of believing what is in their interests to believe. Psychologists use the term ´confirmation bias´, to describe people accumulating and interpreting information such as to reinforce their pre-existing beliefs. Blair even once suggestedthat his belief in the rightness of the war was sufficient justification, regardless of whether there was solid basis for that belief. Again, even if he did genuinely believe in what he was doing, that does not justify it.
So let´s not get hung up on whether the governments consciously drew the link between oil motive, oil plans and the decision to go to war, on whether they ever said “let´s go to war for oil”. In fact the issue is quite simple. A few years ago I put the war-for-oil question to Robert Ebel, the State Department’s senior pre-war adviser on Iraqi oil. He replied, “What was it that the Iraqis had that we would like to have? It wasn’t the sand”.
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A respond to Greg Palast’s blood-for-no-oil theory
November 26th, 2013
By Greg Muttitt.
The world, according to writer Greg Palast, is a frightening place, but one that ultimately functions in very simple ways. The bad guys generally conspire with each other to hurt the good guys. And thank heaven, we have Palast to tell us about their dastardly plans.
In his latest piece for Vice magazine, he has some undisputed villains – the Saudi government and Exxon – working to enrich themselves while hurting the good American car-driving public. The Iraq War wasn’t a war for oil, as we all thought. Thanks to his investigation, we discover it was in fact a war for no-oil, where the US government – the ones you voted for – took the side of the villains by keeping Iraqi oil in the ground so as to push up prices.
It’s a good yarn. And it’s true that Big Oil wanted to restrict Iraqi oil production. The only trouble is, that was in the 1950s and 1960s. Back then, they controlled the majority of world oil production and ran the oil market – the US Senate called them the ‘International Petroleum Cartel’ in a 1952 report. So they held back production in Iraq in order to push up the price and make higher profits in other countries where they operated.
Unfortunately for Palast, things are nothing like that now. Most major oil-producing countries have nationalized their industries, and the market is controlled more by a cartel of governments, OPEC, which rivals the multinational companies for market share.
It’s not even the case – contrary to popular belief – that oil companies want the oil price to be as high as possible. True, a high price does maximize their profits, but in the longer term it harms them by encouraging producing governments to manage without them, or at least to do any deals with them on less profitable terms. Like Goldilocks, oil companies want a price neither too high nor too low: high enough to gove them good profits, but not so high that governments get any impertinent ideas.
Several facts inconveniently fail to fit Palast’s story. Most obviously, if Big Oil really wanted to hold Iraq back, why are the companies now there en masse extracting oil? Sure, it took them eight years to get there, during which time the oil price went up from $25 to $150. But Palast doesn’t tell us why they might have dropped their earlier plan.
He also neglects the fact that the oil companies were demanding access to Iraq – in secret at first, but in public certainly by 2004. And the fact that throughout 2006 and 2007, tied to the ‘Surge’, the Bush administration was demanding the Iraqis pass a law to let Big Oil take the lion’s share.
More specifically, he gets plenty wrong. US oil adviser Robert McKee (who incidentally was from Conoco not Halliburton) was not cautious like his predecessor Phil Carroll, but instead was the one who really started the process toward getting Big Oil into Iraq.
Nor is it true that the neocons in the Pentagon were rabid privatisers while the State Department ‘realists’ wanted to help out OPEC. In fact, the State Department generally pushed harder for Big Oil’s entry into Iraq, whereas the neocons believed that once “set free” Iraqis would naturally want to privatise (because that’s what free people do), without a US intervention.
Well, perhaps Palast didn’t know about any of that. But even documents he did have he (at best) quoted out of context. For example, Palast leaps from 10 words of a December 2003 US government document on Iraqi oil policy – “A single state-owned company …enhances a government’s relationship with OPEC” – to the conclusion that the US had ruled out privatisation as part of a conspiracy with OPEC, by restricting investment and hence production. When seen in context however, this is not in fact a prescription to keep the oil industry in public hands, but rather a discussion of the relative roles of oil ministry and state company (alongside multinational oil companies).
The document, entitled Options for Developing a Long-term Sustainable Iraqi Oil Industry, was indeed intended to establish a blueprint for what came next. But looked at as a whole, its purpose is actually to recommend how to bring in investment from Big Oil in order to achieve higher rates of production – the precise opposite of what Palast claims.
Palast doesn’t publish his source documents, perhaps so no-one can call him out on his more fictional reports. In fact, it’s worse than that. When he published a version of the same story in Harper’s magazine and on BBC Newsnight in 2005, I asked him for a copy of the document, to share with Iraqi trade unionists who wanted to know what was planned for their oil industry, he refused, on grounds that he was working on a book and wanted to use it in that.
The first half of Palast’s article is devoted to how he got hold of the document. “I’d just beaten the Military-Petroleum Complex in a lying contest, so I had a right to be chuffed”, he recounted modestly. When he refused to share it with the people who really needed to know – Iraqis – I got hold of the document myself, using my own cunning investigative methods: phoning USAID (the government agency that sponsored it) and asking for it. I put it on my organisation’s website, and shared the contents with Iraqi colleagues.
One reason the Iraqi oil story wasn’t told by media is the insistence with which the US and UK denied an oil motive. Another reason was that some activists adopted far-fetched conspiracy theories that served as straw men for the governments. In this sense, Palast’s
investigation hinders more than it helps.