Thursday, March 23, 2006

BBC's Greg Palast: Iraq War to cap OIL production

While the Bushies bent over backwards to say the Iraq War wasn't about oil, a couple of their surrogates like neocon Tom Friedman and religious nut Pat Robertson, directly said invading Iraq would mean cheap, plentiful oil for average Americans.

Thomas Friedman in New York Times said the best case scenario was breaking the back of OPEC by increasing Iraq's production, and could lead to oil as cheap as $6 a barrel:

Depending on how the war went, that impact could be very bad and lead to a sharp spike in oil prices, like $60-a-barrel oil. But -- wait a minute -- it could also be very good, and lead to $6-a-barrel oil that would weaken OPEC and, maybe, also weaken the Arab autocrats who depend on high oil prices to finance their illegitimate regimes and buy off opponents.,11319,769845,00.html

He also said if the war went badly, he said there might be an embargo and it could go as high as $60. He was half right. There was no embargo, but oil is over $60 a barrel today.

To people who didn't quite buy the terror/WMD bullshit, this was like a second layer of lies: we'll get cheap oil that keeps our economy and Hummers humming. That has a certain realpolitik appeal.

But Palast has torn away even that fig leaf. As sanctions were coming off, the oil companies wanted to keep Iraq from pumping more, which would have knocked down prices as hurt profits. We are paying our tax dollars and soldiers lives to ensure that oil companies can charge us more.

If we had a real democracy, you'd here some Democrats talking about this.

I won't hold my breath.


The Guardian
Monday, March 20, 2006
by Greg Palast

"It's about oil," Robert Ebel told me. Who is Ebel? Formerly the CIA's top oil analyst, he was sent by the Pentagon, about a month before the invasion, to a secret confab in London with Saddam's former oil minister to finalize the plans for "liberating" Iraq's oil industry. In London, Bush's emissary Ebel also instructed Ibrahim Bahr al-Ulum, the man the Pentagon would choose as post-OIF oil minister for Iraq, on the correct method of disposing Iraq's crude.

And what did the USA want Iraq to do with Iraq's oil? The answer will surprise many of you: and it is uglier, more twisted, devilish and devious than anything imagined by the most conspiracy-addicted blogger. The answer can be found in a 323-page plan for Iraq's oil secretly drafted by the State Department. Our team got a hold of a copy; how, doesn't matter. The key thing is what's inside this thick Bush diktat: a directive to Iraqis to maintain a state oil company that will "enhance its relationship with OPEC."

Enhance its relationship with OPEC??? How strange: the government of the United States ordering Iraq to support the very OPEC oil cartel which is strangling our nation with outrageously high prices for crude.

Specifically, the system ordered up by the Bush cabal would keep a lid on Iraq's oil production -- limiting Iraq's oil pumping to the tight quota set by Saudi Arabia and the OPEC cartel.

You must keep in mind who paid for George's ranch and Dick's bunker: Big Oil. And Big Oil -- and their buck-buddies, the Saudis -- don't make money from pumping more oil, but from pumping less of it. The lower the supply, the higher the price.

It's Economics 101. The oil industry is run by a cartel, OPEC, and what economists call an "oligopoly" -- a tiny handful of operators who make more money when there's less oil, not more of it. So, every time the "insurgents" blow up a pipeline in Basra, every time Mad Mahmoud in Tehran threatens to cut supply, the price of oil leaps. And Dick and George just love it.

Dick and George didn't want more oil from Iraq, they wanted less. I know some of you, no matter what I write, insist that our President and his Veep are on the hunt for more crude so you can cheaply fill your family Hummer; that somehow, these two oil-patch babies are concerned that the price of gas in the USA is bumping up to $3 a gallon.

Not so, gentle souls. Three bucks a gallon in the States (and a quid a litre in Britain) means colossal profits for Big Oil, and that makes Dick's ticker go pitty-pat with joy. The top oily-gopolists, the five largest oil companies, pulled in $113 billion in profit in 2005 -- compared to a piddly $34 billion in 2002 before Operation Iraqi Liberation. In other words, it's been a good war for Big Oil.

As per Plan Bush, Bahr Al-Ulum became Iraq's occupation oil minister; the conquered nation "enhanced its relationship with OPEC;" and the price of oil, from Clinton peace-time to Bush war-time, shot up 317%.


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JasonSpalding said...

Buy oil if you think this is a war about oil! Could it just be a simple Russia that supports any passive aggressive group against the U.S.? Didn’t the U.S.A. do that in Afghanistan? Could it be that the cold war never really ended. The war for the control of OIL in Iraq is just another State Department screw-up! This whole war started because they didn't have the foresight to see that when the U.S.S.R. dissolved that we still needed to keep our friend Saddam on the payroll. Maybe a brief history lesson is needed! U.S.S.R. was before its dismemberment was allied with Iran in its war against Iraq. Iraq at the time had the support of the State Department of the United States. You remember the Axiom the enemy of my enemy is my friend. So when the U.S.S.R. dissolved some in the state department that were thinking that they no longer had to keep supporting Iraq. So Saddam stopped getting the due he was felt so he tried to conquer Kuwait. This pissed off to many in the world so the U.S.A. and the rest of the world stepped in and sent his soldiers packing back to Iraq. Now when Iraq became has become further destabilized the U.S. had to go in and insure the safety of our worlds needed oil supply. Flash forward till now and what is happening Iran wants to control its nuclear destiny and who is supporting them Russia a former member of the U.S.S.R. club. So the real question is Russia attempting a come back? Could this be right? People have always done that which their family needed. You need oil to power you blog people die to get it for you. Since 81.2% of electricity is generated by oil and its derivatives. Paul Revere died doing what his people needed didn't he. All wars are simple they are about control!

Professor Smartass said...

Thanks for your comment.

If you read the original Thomas Friedman piece, he made the same point you did, that the war was about securing oil for the US and driving down the price. While this wasn't an argument the Bushies made publicly, it was obviously implicit.

There are two problems with saying the war was for oil for our economy:

1. Before World War II, we were the Saudi Arabia of oil. That was a tremendous asset during the war, but before that, that wealth didn't trickle down to the average American like during the Great Depression.

2. If our goal was simply to secure oil for our economy, we could have done with Saddam what China did with Iran and the tar sands of Canada: buy it with long term contracts.

But Saddam had given the pumping contracts to the French, Chinese, and Russians, so our oil companies wouldn't profit as much even if the oil itself got over here.

As we have seen after the invasion, the oil companies aren't repaying the favor we did them by giving us lower prices--instead, they are keeping the flow low to keep prices high.

You might read THE PRIZE, the Pulitzer Prize winning history of oil by Daniel Yergin, a guy who now works with Papa Bush at the Carlyle group.

In the past, when oil companies call presidents and senators, it's not to ask for favors, but to give orders.

Russia is not a threat to us militarily. Their military spending is a bzillionth of what ours is, and we have bases in the former soviet republics above Afghanistan, Iran, and Iraq.

There is a military danger in what we are doing there from Russia and China because they correctly perceive our invasion of Iraq and threatened invasion of Iran as a threat to them, just as we would if China invaded Canada for those tar sands instead of buying them.

And you may recall our principle problem in the Korean War was that even though we had a technological advantage, China had a lot of people they could send in human wave attacks, which is why McArthur said it was unwise to get involved in any fight China can walk to.