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.
