US plans to ditch industry
rivals and force end of Opec, write Peter Beaumont and Faisal
Islam
Sunday November 3, 2002
The Observer
The leader
of the London-based Iraqi National Congress, Ahmed Chalabi, has
met executives of three US oil multinationals to negotiate the
carve-up of Iraq's massive oil reserves post-Saddam.
Disclosure of the meetings in October in
Washington - confirmed by an INC spokesman - comes as Lord Browne,
the head of BP, has warned that British oil companies have been
squeezed out of post-war Iraq even before the first shot has been
fired in any US-led land invasion.
Confirming the meetings to US journalists,
INC spokesman Zaab Sethna said: 'The oil people are naturally
nervous. We've had discussions with them, but they're not in the
habit of going around talking about them.'
Next month oil executives will gather at
a country retreat near Sandringham to discuss Iraq and the future
of the oil market. The conference, hosted by Sheikh Yamani, the
former Oil Minister of Saudi Arabia, will feature a former Iraqi
head of military intelligence, an ex-Minister and City financiers.
Topics for discussion include the country's oil potential, whether
it can become as big a supplier as Saudi Arabia, and whether a
post-Saddam Iraq might destroy the Organisation of Petroleum Exporting
Countries.
Disclosure of talks between the oil executives
and the INC -- which enjoys the support of Bush administration
officials -- is bound to exacerbate friction on the UN Security
Council between permanent members and veto-holders Russia, France
and China, who fear they will be squeezed out of a post-Saddam
oil industry in Iraq.
Although Russia, France and China have
existing deals with Iraq, Chalabi has made clear that he would
reward the US for removing Saddam with lucrative oil contracts,
telling the Washington Post recently: 'American companies will
have a big shot at Iraqi oil.'
Indeed, the issue of who gets their hands
on the world's second largest oil reserves has been a major factor
driving splits in the Security Council over a new resolution on
Iraq.
If true, it is hardly surprising, given
the size of the potential deals. As of last month, Iraq had reportedly
signed several multi-billion-dollar deals with foreign oil companies,
mainly from China, France and Russia.
Among these Russia, which is owed billions
of dollars by Iraq for past arms deliveries, has the strongest
interest in Iraqi oil development, including a $3.5 billion, 23-year
deal to rehabilitate oilfields, particularly the 11-15 billion-barrel
West Qurna field, located west of Basra near the Rumaila field.
Since the agreement was signed in March
1997, Russia's Lukoil has prepared a plan to install equipment
with capacity to produce 100,000 barrels per day from West Qurna's
Mishrif formation.
French interest is also intense. TotalFinaElf
has been in negotiations with Iraq on development of the Nahr
Umar field.
Planning for Iraq's post-Saddam oil industry
is being driven by a coalition of neo-conservatives in Washington
think-tanks with close links to the Bush administration, and with
INC officials who have long enjoyed their support. Those hawks
have long argued that US control of Iraq's oil would help deliver
a second objective. That is the destruction of Opec, the oil producers'
cartel, which they argue is 'evil' - that is, incompatible with
American interests.
Larry Lindsey, President Bush's economic
adviser, recently said that a successful war on Iraq would be
good for business.
'When there is a regime change in Iraq,
you could add three to five million barrels [per day] of production
to world supply,' he said in September. 'The successful prosecution
of the war would be good for the economy.'
Analysts believe that after five years
Iraq could be pumping 10m barrels of oil per day. Opec is already
starting to implode, with member nations breaking quotas in an
attempt to grab market share before oil prices fall.
Russian concern over a future INC-inspired
carve-up of Iraq's oil to the benefit of the US has become so
intense that it recently sent a diplomat to hold talks with INC
officials. At that meeting in Washington on 29 August the diplomat
expressed concern that Russia would be kept out of the oil markets
by the US.
A model for the carve-up of Iraq's oil
industry was presented in September by Ariel Cohen of the right-wing
Heritage Foundation, which has close links to the Bush administration.
In The Future of a Post-Saddam Iraq: A
Blueprint for American Involvement, Cohen strikes a similar note
to Chalabi, putting forward a road map for the privatisation of
Iraq's nationalised oil industry, and warning that France, Russia
and China were likely to find that a new INC-led government would
not honour their oil contracts.
Cohen's proposal would see Iraq's oil industry
split up into three large companies, along the areas of ethnic
separation, with one company in the largely Shia south, another
for the Sunni region around Baghdad, and the last in the Kurdish
north.
1) Introduction: Energy Policy=Foreign Policy?
2) One Link: Axis of Oil
3) Consumption and Production
4) The Bush Administration and Energy Policy
5) The "War on Terrorism"
6) Iraq
7) Alternatives
8) Credits
9) About the MoveOn bulletin and MoveOn.org
1) INTRODUCTION: ENERGY POLICY=FOREIGN POLICY?
"Together, oil and coal constitute the biggest single industry
in history."
- Ross Gelbspan, in his book, The Heat is On
Energy is the keystone of the quality of life characteristic
of much of the modern industrialized world. It makes our technology
possible. It touches our lives in thousands of ways each day--from
the heat we use in our homes, to the materials that make up the
many products we use, to the types of medical services we enjoy,
to the ways we communicate and travel.
Yet we take energy largely for granted. We treat it as though
it will always be available. And we underestimate its importance
in our everyday lives.
Most of our energy comes from oil, gas, and petroleum products.
These non-renewable resources not only fuel our cars, but they
are also used in literally thousands of ways to support our industrialized
lifestyle. They are the key to the current world economy. But
they will not last forever. By some estimates, oil production
may reach its peak as soon as 2003; by other estimates, 2010.
Either way, oil production will most certainly peak within the
lifetimes of most people around today. Meanwhile, we have done
little to reduce our dependence on this source of energy, thereby
assuring that the demand will remain. Once the oil resources of
the world begin to diminish, the price of oil will inevitably
rise quite high.
This may explain why oil is important enough to fight over.
Oil may not be the only reason for a new Gulf War, but there
is little doubt a successful military seizure of Iraq would have
the end result of giving the US control over Iraq's oil reserves.
Not only would this immediately put money into the pockets of
US oil companies, it would also ensure that Iraq's oil reserves
don't fall into the hands of a US competitor such as China.
Still, at best, this type of power-grab will only be beneficial
to some, and only in the short-term. Burning oil and gas pollutes
our collective environment, no matter who controls the oil reserves.
Once oil reserves begin to decline, competition for them will
become even more intense, and may result in conflicts that we
can't yet foresee, all with their attendant environmental and
humanitarian consequences. After that, even those oil reserves
that we have today will dwindle and go dry, and the cost of finding
more oil and extracting it will continue to rise, until it outweighs
potential profits, and the amount of energy needed to recover
the oil is equal to or exceeds the energy in the recovered oil.
In the meantime, unless the population has found some more sustainable
way to produce energy, our quality of life will deteriorate. Experts
worry that the lack of availability of oil could cause the global
human population to actually decline.
If the experts are right, we need more of a solution than squabbling
over whatever oil is left. And we need more of a solution than
reducing our dependence on Middle Eastern oil. We need to start
reducing our dependence on oil, period. We may even need a radical
change, a new revolution on the scale of the industrial revolution,
in order to completely end our use of oil.
It isn't really that controversial of an idea, after all, that
the oil will eventually run out. The controversial part comes
when deciding what to do with that knowledge. The Bush administration's
ties to the oil industry will likely mean that new policies aimed
at ending dependence on oil won't be coming from the government.
So new ideas and environmentally concerned action will have to
come from the grassroots level. It will take a lot of effort,
but it could help ensure a much better future for many generations
to come.
If the experts are right, the sooner we start, the better.
2) ONE LINK: THE AXIS OF OIL
Cheney, Bush, and the industry form a kind of "axis of oil"
which serves US corporate interests. In fact, based on consultations
with energy industry leaders such as the CEO of Enron, the Bush
administration has determined that the basis of the US national
security is access to oil. Not surprising then that Iraq is the
new target in the "war on terrorism."
http://www.commondreams.org/views02/1113-08.htm
3) CONSUMPTION
On a table showing world petroleum consumption from 1991-2000,
the US is the highest consumer of petroleum by far.
http://www.eia.doe.gov/emeu/iea/table12.html
Dependence on foreign oil is a result of this high rate of consumption.
In June 2002, Under Secretary of State Alan Larson testified before
the House of Representatives International Relations Committee
that US dependency on foreign sources of oil will be an "unavoidable
component of the energy supply mix." According to Larson,
"We are virtually self-sufficient in all energy resources
except oil, of which we import 52 percent of our needs. Estimates
indicate that over the next 20 years, U.S. oil consumption will
increase by 33 percent or more than 6 million barrels a day. Depending
on many factors, including the policies we adopt, the Energy Information
Administration estimates that imported oil could grow to 62 percent
of our total oil consumption by 2020." Thus the energy security
policy of the US must "ensure that our economy has access
to energy on terms and conditions that support economic growth
and prosperity" and "ensure that the United States and
its foreign policy can never be held hostage by foreign oil suppliers."
http://www.usembassy.it/file2002_06/alia/a2062007.htm
4) THE BUSH ADMINISTRATION AND ENERGY POLICY
The Bush administration is as oil-drenched as they come, as this
article takes care to demonstrate. But what does this mean? According
to the article, "George W.'s ties to oil don't prove that
the industry decides our every foreign policy move. But they do
just about guarantee, for all practical purposes, that nothing
significant will change in American energy policy. With Bush-Cheney
in power, oil addiction is here to stay."
http://www.globalresearch.ca/articles/CAV111A.html
For in-depth information about Dick Cheney and his ties to the
energy industry, see our previous bulletin, "Who is Dick
Cheney?"
http://www.moveon.org/moveonbulletin/bulletin1.html
This is an excellent overview of a report on the campaign contributions
made by various energy companies to Democratic and Republican
candidates over the past ten years. Not surprisingly, President
Bush was the number one recipient of campaign contributions from
the oil and gas industry in the last election. Enron was the number
one campaign contributor in this industry, while Exxon Mobil came
in second. Bush also received a large amount of money from the
utilities industry. In fact, his two-year fund-raising total was
more than any other federal candidate has received from electric
utilities in the past decade. There is lots of detailed information
here, especially if you have a little time to explore the charts.
http://www.opensecrets.org/pressreleases/energybriefing.htm
Confused by all of the information out there about Enron? Never
fear--here, in point form, is "Enron at a Glance." Along
with other useful information, this list notes that Enron CEO
Kenneth Lay "was appointed to the Bush transition team where
he worked directly with Vice President Cheney to develop the administration's
national energy policies," and that "no fewer than 52
former Enron executives, lobbyists, lawyers or significant shareholders
ended up working for the Bush administration."
http://www.thedailyenron.com/enron101/glance.asp
Now that the Republicans have won full control of both Congress
and the Senate, it is far more likely that they will pass a controversial
energy bill which includes drilling in the Arctic National Wildlife
Refuge.
http://www.adn.com/front/story/2095762p-2192708c.html
MSNBC takes a look at the Republicans who will be taking over
the environment and energy committees, and how this is likely
to affect policy in 2003, including the energy bill.
http://www.msnbc.com/news/831973.asp
This website offers a critical analysis of the energy bill, breaking
it up section by section with links and pro/con summaries provided
for the various topics covered. A very useful resource if you
have a little time to browse.
http://www.energyjustice.net/energybill/
5) THE "WAR ON TERRORISM"
Why do so many people outside of the US seem to think that the
war on Afghanistan is related to oil? This article gives an overview
of a number of sources that examine the many links between oil
policy and events in Afghanistan, and gives the gist of their
arguments on subjects such as the rise and fall of the Taliban.
http://www.afgha.com/
article.php?sid=13313&mode=thread&order=0
Appointments to the region since the war are also indicative
of an oil connection. For example, Zalmay Khalilzad was appointed
as envoy to Afghanistan in January of 2002. Khalilzad is a former
aide to the Texas-based oil company Unocal. He drew up Unocal's
risk analysis on its proposed trans-Afghan gas pipeline. Hamed
Karzai, the president of Afghanistan, is also a former consultant
for Unocal.
http://www.corpwatch.org/news/PND.jsp?articleid=1149
Unocal formed the CentGas consortium in the mid-90s with the
intent of building the trans-Afghan pipeline. Unocal then withdrew
from the pipeline project in 1998, after the US bombed Afghanistan.
At the time, the statement issued by the company said that "Unocal
will only participate in construction of the proposed Central
Asia Gas Pipeline when and if Afghanistan achieves the peace and
stability necessary to obtain financing from international lending
agencies for this project and an established government is recognized
by the United Nations and the United States."
http://www.unocal.com/uclnews/98news/082198.htm
The conditions Unocal wanted currently exist. So is the trans-Afghan
pipeline project going through? You bet--it is the major Afghan
"reconstruction" project. Other sources estimate that
building could begin in mid-2003.
http://www.afgha.com/
article.php?sid=14728&mode=thread&order=0
Although earlier reports suggested that Unocal was the top company
being considered to build the pipeline, currently it appears that
Unocal will not have any direct involvement. In fact, thus far
the company has made a point of distancing itself from the project,
especially in response to reports that have highlighted Unocal's
former attempts to court the Taliban in order to pave the way
for the pipeline.
http://www.unocal.com/uclnews/98news/centgas.htm
The war on Afghanistan allowed the US to place military bases
in the nine surrounding countries, all rich in oil and natural
gas. In fact, oil can be linked to any number of US policies around
the world that are being pursued under the guise of the "war
on terrorism."
http://www.utnereader.com/bMedia.tmpl?command=search&db=
dArticle.db&eqheadlinedata=Oiling%20the%20War%20Machine
A number of countries with interests in oil have reason to worry
about what a new US presence in Central Asia and possibly the
Persian Gulf could mean for them. This US presence could also
trigger more terrorist attacks aimed at disrupting the world economic
system.
http://www.yellowtimes.org/article.php?sid=853
US dependence on Saudi oil has forced te Bush administration
to maintain an alliance with the country that may be interfering
with the goals of the "war on terrorism." This article
quotes Edward L. Morse, former deputy assistant secretary of state
for international energy policy under President Ronald Reagan,
who has said, "The stark truth is that we're dependent on
this country that directly or indirectly finances people who are
a direct threat to you and me as individuals." This is apparently
why the US government has remained fairly silent about the obvious
Saudi connection to the Sept. 11 terrorist attacks.
http://www.gasandoil.com/goc/news/ntn14772.htm
6) IRAQ
"Oil is much too important a commodity to be left in the
hands of the Arabs."
- Henry Kissinger, US Secretary of State under Presidents Nixon
and Ford
Whether or not the key members of the Bush administration would
personally profit from the spoils of a war on Iraq, their ties
to the industry are still a conflict of interest. This is an excellent
overview of Dick Cheney's
http://www.commondreams.org/headlines02/0915-04.htm
"Strategic Energy Policy Challenges for the 21st Century"
is a report that was given to Dick Cheney in spring of 2001. It
highlights how likely an energy crisis is, and the fact that the
US will need to create a long-term plan for maintaining access
to energy. According to the report, "As the 21st century
opens, the energy sector is in critical condition. A crisis could
erupt at any time from any number of factors and would inevitably
affect every country in today’s globalized world. While
the origins of a crisis are hard to pinpoint, it is clear that
energy disruptions could have a potentially enormous impact on
the U.S. and the world economy, and would affect U.S. national
security and foreign policy in dramatic ways."
The basic conclusions of the report are that the US must develop
a comprehensive and long-term energy policy aimed at dealing with
the energy crisis, and that this must be done immediately.
Progressives may not always agree with exactly how the report
recommends doing this (for example, the report cites environmental
policies as restrictions on the market and is positive about the
effects of drilling in the Arctic National Refuge, but also lists
ensuring the protection of the eco-system as a priority). Yet
it certainly makes it clear that addressing the complex topic
of energy is one that needs to be given top priority. It's a long
report, but if you have the time to read it, it's very worthwhile.
http://bakerinstitute.org/Pubs/workingpapers/
cfrbipp_energy/energytf.htm
According to this article in the Sunday Herald, "Strategic
Energy Policy Challenges For The 21st Century" could be read
as a call for war against Iraq. This article may not be exactly
fair to the authors of the report, who seem to be open to more
possibilities than simply direct military intervention, but it
is probably at least accurate in that the emphasis the report
places on Iraq could easily be used as justification for war.
http://www.sundayherald.com/28224
The Global Policy Forum (GPF) is a New York-based NGO (non-governmental
organization) that has consultative status at the UN. This excellent
short article by GPF's executive director clearly demonstrates
the connection between the vast oil reserves of Iraq and US policies
in the region.
http://www.globalpolicy.org/security/oil/2002/08jim.htm
In this more detailed article, which has been published in a
number of places including Alternet and Zmag, Rahul Mahajan examines
each publicized reason for a new war on Iraq and explains why
they don't "hold water." Mahajan argues that the only
reasonable explanation for a new war is oil; US desire for oil
also explains why the sanctions against Iraq have remained in
place for so long, despite the tragic effect these sanctions have
had on Iraq's civilian population. According to Mahajan, "The
sanctions have turned the Iraqi regime permanently against the
United States. If they were lifted, the government would make
oil exploration deals with French and Russian companies, not American
ones. Continuation of the sanctions is a constant political burden
for the United States. The Bush administration wants a war to
extricate itself from this stalemate, by replacing Saddam with
a U.S.-friendly dictator who will make deals with American companies
and follow American dictates."
http://www.rahulmahajan.com/iraqoil.htm
7) ALTERNATIVES
This article by a controversial geologist lists the pros and
cons of various alternative energy sources. As he sees it, the
reality is that the many options we are currently exploring are
not enough to replace our dependence on oil. The author concludes
that a revolution on the scale of the industrial revolution will
be needed to reduce our dependence on oil. The tone of the article
is not exactly optimistic, and not everyone may agree with its
conclusions, but it's included here so you can decide for yourself.
http://www.oilcrisis.com/youngquist/altenergy.htm
We don't have the space here to cover all of the various alternative
forms of energy and methods of conservation. So we are providing
the following websites as a kind of introductory resource.
The GrassRoots Recycling Network provides analyses of alternative
sources of energy. It also provides many link to organizations
that already practice alternative forms of energy consumption,
as well as reducing landfill waste.
http://www.grrn.org
The Global Alliance for Incineration Alternatives (aka Global
Anti-Incineration Alliance) provides links and examples from around
the world to alternatives to incineration as a means of ridding
the planet of waste. It has an active email list that provides
volumes of information about laws, companies, activist strategies,
standards, country requirements, alternatives, etc.
http://www.noburn.org
These sites from the US and New Zealand stress the necessity
of ending the production of waste, rather than simply managing
waste. They provide many governmental and private reviews of cities,
counties and businesses that have found alternative means to prevent
waste and to encourage environmentally sound methods of alternative
energy production.
http://www.zerowasteamerica.org
http://www.zerowaste.co.nz
EnergyJustice has an entire section of its website dedicated
to alternative energy. It provides statistics, examples, and methods
for implementing solar and wind energy in a profitable way.
http://www.energyjustice.net
New Urbanism is a website about automobiles, the negative impact
of their use, and some possible transit alternatives.
http://www.NewUrbanism.org/pages/496683/index.htm
8) CREDITS
Research team:
Susan Bunyan, Lita Epstein, Terry Hackett, Sharon Hametz, Matthew
Jones, Linda Langness, Cameron McLaughlin, Janelle Miau, Vicki
Nikolaidis, Sarah Jane Parady, Kim Plofker, Jesse Rhodes, Ora
Szekely, Bland Whitley, and Mary Williams.
Proofreading team:
Madlyn Bynum, Eileen Gillan, Mary Anne Henry, Kendra Lanning,
Mercedes Newman, Dawn Phelps, Rebecca M. Sulock and Rita Weinstein.
9) ABOUT THE MOVEON BULLETIN & MOVEON.ORG
The MoveOn Bulletin is a free, biweekly email bulletin providing
information, resources, and news related to important political
issues. The full text of the MoveOn Bulletin is online at :
http://www.moveon.org/moveonbulletin/
MoveOn.org does not necessarily endorse all of the views espoused
on the pages that we link to, nor do we vouch for their accuracy.
Read them at your own risk.
The MoveOn Bulletin is a project of MoveOn.org. MoveOn.org is
an issue-oriented, nonpartisan, nonprofit organization that gives
people a voice in shaping the laws that affect our lives. MoveOn.org
engages people in the civic process, using the Internet to democratically
determine a non-partisan agenda, raising public awareness of pressing
issues, and coordinating grassroots advocacy campaigns to encourage
sound public policies.
You can help decide the direction of MoveOn.org by participating
in the discussion forum at:
http://www.actionforum.com/forum/index.html?forum_id=223
To be kept informed about actions and campaigns, many of which
are related to bulletin topics, you can sign up for MoveOn's action
updates, at:
http://www.moveon.org/keepmeposted/
The Russians got into their Vietnam right after we got out of
ours? Isn't that strange?
We supported Bin Laden and the Taliban for years, and viewed them
as Freedom fighters against the Russians. Isn't that strange?
As late as 1998 the US was paying the salary of every single Taliban
official in Afghanistan? Isn't that strange?
There is more oil and gas in the Caspian Sea area than in Saudi
Arabia, but you need a pipeline through Afghanistan to get the
oil out. Isn't that strange?
UNOCAL, a giant American Oil conglomerate, wanted to build a 1-000-mile
long pipeline from the Caspian Sea through Afghanistan to the
Arabian Sea. Isn't that strange?
UNOCAL spent $10 billion on geological surveys for pipeline construction,
and very nicely courted the Taliban for their support in allowing
the construction to begin. Isn't that strange?
All of the leading Taliban officials were in Texas negotiating
with UNOCAL in 1998. Isn't that strange?
1998-1999 - The Taliban changed its mind and threw UNOCAL out
of the country and awarded the pipeline project to a company from
Argentina. Isn't that strange?
John Maresca, vice president of UNOCAL, testified before Congress
and said no pipeline until the Taliban was gone and a more friendly
government was established. Isn't that strange?
1999-2000 - The Taliban became the most evil people in the world.
Isn't that strange?
Niaz Naik, a former Pakistani Foreign Secretary, was told by senior
American officials in mid-July that military action against Afghanistan
would go ahead by the middle of October. Isn't that strange?
Sept. 11, 2001 - WTC disaster. Bush goes to war against Afghanistan
even though none of the hijackers came from Afghanistan. Isn't
that strange?
Bush blamed Bin Laden but has never offered any proof saying it's
a "secret." Isn't that strange?
Taliban offered to negotiate to turn over Bin Laden if we showed
them some proof. We refused; we bombed. Isn't that strange?
Bush said: "This is not about nation building. It's about
getting the terrorists." Isn't that strange?
We have a new government in Afghanistan. Isn't that strange?
The leader of that government formerly worked for UNOCAL. Isn't
that strange?
Bush appoints a special envoy to represent the US to deal with
that new government, who formerly was the "chief consultant
to UNOCAL." Isn't that strange?
The Bush family acquired their wealth through oil? Isn't that
strange?
Bush's secretary of interior was the president of an oil company
before going to Washington. Isn't that strange?
George Bush Sr. now works with the "Carlysle Group"
specializing in huge oil investments around the world. Isn't that
strange?
Condoleeza Rice worked for Chevron before going to Washington.
Isn't that strange?
Chevron named one of its newest "supertankers" after
Condoleezza. Isn't that strange?
Dick Cheney worked for the giant oil conglomerate Haliburton before
becoming vice president. Isn't that strange?
Haliburton gave Cheney $34 million as a farewell gift when he
left the company. Isn't that strange?
Haliburton is in the pipeline construction business. Isn't that
strange?
There is $6 trillion worth of oil in the Caspian Sea area. Isn't
that strange?
The US government quietly announced on Jan 31, 2002 that we will
support the construction of the Trans-Afghanistan pipeline. Isn't
that strange?
President Musharraf (Pakistan), and interim leader Karzai, (Afghanistan
- UNOCAL) announce agreement to build proposed gas pipeline from
Central Asia to Pakistan via Afghanistan. (Irish Times 02/10/02)
Isn't that strange?
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