Eyes on the Prize - Blood for Oil in Iraq
Metroland Cover Story- January 3, 2003
by Glenn Weiser

Written a few months before the war with Iraq - GW

A recently uncovered energy-policy report from April 2001 suggests that the Bush administration has been plotting action against Iraq since well before 9/11-and that the motivation is oil

In April 2001, we could pick up a newspaper and read about race riots in Cincinnati, preparations for the controversial World Economic Forum in Quebec City, or the diplomatic fallout from the collision of U.S. and Chinese military planes over the South China Sea. 

For lighter fare, there was the 20th anniversary of E.T., the divorce of Tom Cruise and Nicole Kidman, and the arrest of Sean "Puffy" Combs on a weapons charge in Florida. The New York Yankees, meanwhile, were preparing for the new season and a chance at their fourth consecutive World Series title.

Spring was in the air, and Americans could go about their business blissfully unaware that five months later, on Sept. 11, 2001, the world as we knew it would change forever.

Americans also were blissfully unaware that deep within the closed-door world of the Washington power elite, a blueprint was being drawn up for a confrontation with Iraq-one that eventually would be sold to the American public as a necessary preemptive strike in the 9/11-inspired war on terrorism.

An April 2001 blue-ribbon study by the Council for Foreign Relations and the James A. Baker III Institute for Public Policy at Rice University, titled Strategic Energy Policy Challenges for the 21st Century, has recently surfaced, and it raises serious questions about President George W. Bush's explanation for his showdown with Iraq. The report, commissioned by former Secretary of State James Baker and submitted to Vice President Dick Cheney, warns of potentially serious energy shortages within five years unless corrective action is taken. With chilling disregard for international law, it advises, among other things, that the United States consider military intervention in Iraq to maintain the stability of Persian Gulf oil supplies. Critics are calling this report, which both the British and Australian press covered last October but which has gone unnoticed in the mainstream American media, the hidden blueprint to George W. Bush's Iraq policy. Moreover, the administration's actions toward Iraq have mirrored many of the report's recommendations.

The sponsors and authors of the document are a who's who of hawks and oilmen: the Washington-based Council on Foreign Relations includes Cheney, the former CEO of the oilfield supply firm Halliburton; Baker, whose family has close ties to Pennzoil; and former Secretary of State Henry Kissinger, also an adviser since 2001 to the China Offshore Oil Company. Edward P. Djerejian, the director of Baker Institute since 1994, has been ambassador to both Israel and Syria, and is currently a director at Occidental Petroleum. Among the members of the task force who wrote the report are the chairmen of Texaco, Shell Oil and Enron. George W. Bush, by the way, was the founder and CEO of the Bush Exploration Oil and Natural Gas Company from 1975 to 1986.

The 45-page paper, which may be read online here, strives to take a nonpartisan view of the causes of the looming crisis. It criticizes what it calls the government's failure over several successive administrations to develop a comprehensive energy policy, citing the lack of storage facilities for oil reserves, increased demand for light trucks (pickups, sport utility vehicles and minivans), failures to raise fuel efficiency standards for motor vehicles-"an attainable option"-and develop solar and wind power sources as factors.

Because of this shortsighted approach, the report says, "the United States remains a prisoner of its energy dilemma." It states that the central problem for the administration is that "the American people continue to demand plentiful and cheap energy without sacrifice or inconvenience." And with "the energy sector in critical condition, a crisis could erupt at any time [that] could have potentially enormous impact on the U.S. . . . and would affect U.S. national security and foreign policy in dramatic ways."

The report goes on to say that "the consequences of not having an energy policy that can satisfy our energy requirements on a sustainable basis have revealed themselves in California," and warns that "there could be more Californias in America's future." It calls on President Bush to tell "these agonizing truths to the American people."

Of course, one truth the report ignores is that many of its authors, as prominent members of the oil industry, have profited handsomely from the very lack of a comprehensive energy policy the report decries. The United States will never be energy independent, and it's too reliant on other countries for its oil and natural gas needs, the report contends. And even though the United States gets 75 percent of its oil from outside the Middle East, the principal cause of a future crisis, it claims, would be "Middle East tension."

"Chances are greater than at any point in the last two decades of an oil supply disruption," the report says. "Gulf allies are finding their domestic and foreign policy interests increasingly at odds with U.S. strategic considerations, especially as Arab-Israeli tensions flare. . . . They have become less inclined to lower oil prices. . . . A trend towards anti-Americanism could affect regional leaders' ability to co-operate with the U.S. in the energy area. The resulting tight markets have increased U.S. vulnerability to disruption and provided adversaries undue political influence over the price of oil.''

The Baker report calls for a "reassessment of the role of energy in foreign policy," with stable oil supplies repeatedly mentioned as a "security imperative."

After presenting its bland version of how we've gotten into this mess, the paper singles out Saddam Hussein as the principal threat to stable Middle East oil supplies. What really addles the oil barons is Iraq's ability to exert leverage over the petroleum markets. Moreover, if Saddam feels like holding back oil, only the Saudis, and to a lesser extent the United Arabs Emirates, have the spare production capacity to bail us out. "Over the past year, Iraq has effectively become a swing producer, turning its taps on and off when it has felt such action was in its strategic interest to do so," the report says. "Saudi Arabia has proven willing to provide replacement supplies to the market when Iraqi exports have been reduced. This role has been extremely important in avoiding greater market volatility and in countering Iraq's efforts to take advantage of the oil market's structure."

But the report's authors also note that "there is domestic pressure on the GCC (Gulf Cooperation Council) leaders to reject cooperation to cool oil markets during times of a shortfall in Iraqi oil production. These populations are dissatisfied with the "no-fly zone" bombing and the sanctions regime against Iraq, perceived U.S. bias in the Arab-Israeli peace process, and lack of domestic economic pressures." (Aside from the dangers of energy shortages, there are purely political reasons to keep petroleum supplies, and hence the price of oil, stable: The last three times oil rose above $30 a barrel, recessions followed. Getting reelected to the presidency, as George H.W. Bush learned, can be tough during hard economic times).

In recommending what to do about Saddam, the report turns menacing as it discusses war. "Iraq remains a destabilizing influence to U.S. allies in the Middle East, as well as to regional and global order, and to the flow of oil to international markets from the Middle East. 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. This would display his personal power, enhance his image as a 'Pan Arab' leader supporting the Palestinians against Israel, and pressure others for a lifting of economic sanctions against his regime. The United States should conduct an immediate policy review toward Iraq, including military, energy, economic, and political/diplomatic assessments. The United States should then develop an integrated strategy with key allies in Europe and Asia, and with key countries in the Middle East, to restate goals with respect to Iraqi policy and to restore a cohesive coalition of key allies."

And while the report mulls containment strategies, it expresses the concern that if you try working with Saddam, you end up feeding his power and making matters worse. In order to alleviate an energy shortage, then, the United States may need to resort to "military intervention."

There are signs beyond the Baker report that the U.S. will do whatever it takes to keep oil barrels rolling in. Writing for the Sydney Morning Herald on Dec. 26, Ritt Goldstein reports, "As far back as 1975, Henry Kissinger, then secretary of state, said America was prepared to wage war over oil. Separate plans advocating U.S. conquest of Saudi oilfields were published in the '70s. So it should come as little surprise that in May last year (2001)-four months before the terrorist attacks on Washington and New York-a battle plan for Afghanistan was already being reviewed by the U.S. Command that would carry it out after Sept. 11. Military strategists were highlighting the energy wealth of the Caspian Sea and Central Asia and its importance to America's 'security.' The Indian media and Jane's Intelligence Review reported that the U.S. was fighting covert battles against the Taliban, months before the 'war on terrorism' was declared."

Goldstein adds, "Virtually concurrent with the report's release on April 10 last year, Tommy Franks, commander of U.S. forces responsible for the Persian Gulf/South Asia area, added his voice. An April 13 report on his congressional testimony defined General Franks' command's key mission as 'access to [the region's] energy resources.' "

Whose fault is it that our soldiers may have to die so that the oil industry may live? According to the report's authors, no one in particular is responsible, least of all George W. Bush. "That Americans face long-term situations such as frequent sporadic shortages of energy, energy price volatility, and higher energy prices is not the fault of President Bush," it says. "That Americans face long-term energy delivery challenges and volatile energy prices is the failure of both Democrats and Republicans to fashion a workable energy policy. Energy policy was allowed to drift by both political parties despite its centrality to America's domestic economy and to our nation's security."

There is good reason to doubt this, especially considering the Republican cast of the report's sponsors and authors. Speaking on Feb. 28 before the Commonwealth Club, a California-based public policy forum, Robert F. Kennedy Jr., senior attorney for the Natural Resources Defense Council, blasted the Bush administration's handling of the energy problem. "The Bush-Cheney energy plan is a $34 billion subsidy to the oil industry, the nuke industry and the coal industry," Kennedy charges. "There is language in the plan that expresses a strong love and favor for conservation, and there are 11 conservation and renewable programs, but none of them are funded. There's no money in the budget or the bill; it's all going to big oil, big coal and big nuke, which don't need the money. These are industries that gave $60 million to Republican congressional candidates during the last cycle-more than any other industry-and Bush is the largest beneficiary. They're getting $34 billion in return, and it's a disastrous policy for our country.

"The plan says we should study Corporate Average Fuel Economy (C.A.F.E.) standards. We don't need to; we know they work. If we raise Corporate Average Fuel Economy by one mile per gallon, we get more oil than there is in two Arctic National Wildlife Refuges. If we raise oil efficiency by 2.7 miles per gallon in our cars, we eliminate 100 percent of Gulf imports into this country." The odds of that happening seem remote-early last year, Congress, acting under pressure from Detroit, defeated the latest proposal to raise fuel efficiency standards.

Kennedy went on to detail the partisan origins of the predicament, adding that "President Carter passed C.A.F.E. standards in response to the second oil crisis in 1979. Those standards were directed toward getting our country up from 20 to 40 miles per gallon by 1990. Within six years, we had raised average fuel economy by seven and a half miles per gallon. That efficiency caused an oil glut in this country, collapsing the price of gasoline to the lowest levels in decades. Oil companies went to the Reagan administration and persuaded them to roll back C.A.F.E. standards.

"The Gingrich Congress subsequently made it illegal for the government to pass them. In 1986 we doubled imports from the Persian Gulf, and they've been going up ever since. If Reagan hadn't done that, we would not have imported one drop of Gulf oil into this country after 1986. We almost certainly wouldn't have had a Gulf War, and if you can follow the logic from there, we probably wouldn't be involved in Afghanistan today and the World Trade Center might still be standing."

Most significant, the Baker report raises fundamental questions about the Bush administration's honesty with the public in claiming that war with Saddam Hussein will be waged to disarm him. Reached for comment by e-mail, Noam Chomsky, professor of linguistics at Massachusetts Institute of Technology, wrote that he had not read the report, but commented that "there can be no serious doubt that regaining control of the 2nd largest energy reserves in the Middle East, with military bases right at the heart of the world's major energy resources, is a long-term goal of U.S. strategic planning."

Before the report came out, containment of Iraq was the accepted policy, even by hawks like Jim Baker himself. Speaking in Washington, D.C., on May 4, 1998, Baker agreed with President Clinton's handling of the situation, saying, "I don't buy the argument that containment of Iraq is a failure. Look what has happened to the nuclear weapons program there. Look what's happened to the chemical weapons program there. Look what has happened to the missile delivery capability program there-a lot. These sanctions have enabled the international community to get a serious handle on the development of all of these programs. So I don't buy the argument that containment is unsuccessful."

By 2002, something had obviously changed. The United Nations pulled its weapons inspectors out of Iraq in 1998, leaving Saddam free to rearm, but that didn't merit an immediate military response in the government's mind at the time. The reasons behind George W. Bush's Iraq policy clearly lie somewhere else.

If you consider the Baker report as a possible basis for Bush's Iraq policy, it suggests a different scenario for how events unfolded. Saddam had incurred the displeasure of the U.S. government in 1999 when he got uppity and lowered oil production. After Vice President Cheney received the report in April 2001, the president's inner circle began plans for a regime change in Iraq. For political reasons, a cover story would have to be created (you just can't go around overthrowing governments), so the Bush team settled on a ploy of pressuring Iraq over its weapons of mass destruction and scaring the public into thinking they might be used against the United States.

After Sept. 11 and the war in Afghanistan, the White House returned its attention to Iraq, and Bush ratcheted up the rhetoric against Saddam. Hussein was a global menace who was going to give chemical or biological weapons to Osama bin Laden, the president contended. When the CIA irritated the administration with its opinion that there was no Iraq-al Qaeda connection, the Pentagon acted to bolster the charade by announcing plans to set up its own internal intelligence shop, which might come to different conclusions regarding such a link. By then the national press was starting to ask the question: Why all this talk of war now? Containment had been working, and it was widely feared that removing Saddam could create an unstable situation in Northern Iraq and parts of Turkey if the region's Kurds took advantage of a power vacuum to demand their own autonomous state. Veteran political commentators were baffled at the administration's new bellicosity.

Led by Cheney, the White House hawks pressed for an invasion of Iraq. But after Russia and our European allies objected to a U.S. military strike without U.N. approval, Secretary of State Colin Powell prevailed over the go-it-alone camp and successfully obtained U.N. Resolution 1441, which calls for a full declaration and disarmament of its weapons of mass destruction programs and authorizes the use of force if Iraq was found in "material breach" of the resolution. But administration made it clear that it reserved the right to attack with or without a green light from the United Nations. When U.N. inspectors detected discrepancies in the Iraqi declaration of its weapons of mass destruction, the administration had the pretext it needed to strike.

Which brings us to the present. With polls showing a majority of Americans feeling that the United States does not have good enough reason to go to war now, a vacationing President Bush said last week at his ranch in Crawford, Texas, that he hasn't decided whether to take military action against Iraq. But the administration may already be eyeing the prizes of a coming war. On Dec. 29, Colin Powell said that the United States was "positioning . . . military forces for whatever might be required" in Iraq. In the event of a war, he said, the country's "oil fields are the property of the Iraqi people. . . . If a coalition force goes into those oil fields, we want to protect those fields and make sure they're used to benefit the people of Iraq, not destroyed or damaged by the failing regime on the way out the door." If the administration has intended to invade Iraq all along, this is exactly what you would be hearing.

In fairness, the charge that the president is systematically deceiving the public over Iraq still can't be proven. The Baker report, though, provides a plausible explanation for the White House's actions, and the fact that it stayed buried for so long is suspicious all by itself. The tragedy is that if the government had maintained President Carter's fuel efficiency standards until now, there would no reason, legitimate or not, to send young Americans and Iraqis into a deadly confrontation. The country may have to pay a high price in blood for failing to escape the quicksand of Persian Gulf oil.

I emailed the story to Noam Chomsky, who replied: "Thanks for sending. The Metroland paper makes a sensible argument (and the quote from me looks authentic)." - GW

List of Metroland Stories by Glenn Weiser                          2002 by Glenn Weiser. All rights reserved.

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