Jim Holt: It’s the Oil

Jim Holt has a very good article in the London Review of Books arguing that the disaster in Iraq might not be a disaster at all from Bush and Cheney's point of view and that their intention was always to keep thousands of US troops in Iraq in order to facilitate the theft known as Iraq's Oil Laws.

It has been estimated, by the Council on Foreign Relations, that Iraq may have a further 220 billion barrels of undiscovered oil; another study puts the figure at 300 billion. If these estimates are anywhere close to the mark, US forces are now sitting on one quarter of the world’s oil resources. The value of Iraqi oil, largely light crude with low production costs, would be of the order of $30 trillion at today’s prices. For purposes of comparison, the projected total cost of the US invasion/occupation is around $1 trillion.

Who will get Iraq’s oil? One of the Bush administration’s ‘benchmarks’ for the Iraqi government is the passage of a law to distribute oil revenues. The draft law that the US has written for the Iraqi congress would cede nearly all the oil to Western companies. The Iraq National Oil Company would retain control of 17 of Iraq’s 80 existing oilfields, leaving the rest – including all yet to be discovered oil – under foreign corporate control for 30 years.

Which would go some way to explaining why Bush is building an embassy the size of the Vatican in Iraq and why the US is constructing a series of permanent military bases there.

In February last year, the Washington Post reporter Thomas Ricks described one such facility, the Balad Air Base, forty miles north of Baghdad. A piece of (well-fortified) American suburbia in the middle of the Iraqi desert, Balad has fast-food joints, a miniature golf course, a football field, a cinema and distinct neighbourhoods – among them, ‘KBR-land’, named after the Halliburton subsidiary that has done most of the construction work at the base. Although few of the 20,000 American troops stationed there have ever had any contact with an Iraqi, the runway at the base is one of the world’s busiest. ‘We are behind only Heathrow right now,’ an air force commander told Ricks.

The Defense Department was initially coy about these bases. In 2003, Donald Rumsfeld said: ‘I have never, that I can recall, heard the subject of a permanent base in Iraq discussed in any meeting.’ But this summer the Bush administration began to talk openly about stationing American troops in Iraq for years, even decades, to come. Several visitors to the White House have told the New York Times that the president himself has become fond of referring to the ‘Korea model’. When the House of Representatives voted to bar funding for ‘permanent bases’ in Iraq, the new term of choice became ‘enduring bases’, as if three or four decades wasn’t effectively an eternity.

They are slowly changing their public tune regarding "leaving if asked to do so by the Iraqi government" and their building programmes say more than anything else about the permanence of their vision for an American military residency there.

Having such a permanent US presence can only be justified if it serves some purpose, and the purpose appears to be to ensure that the profits from Iraq's oil industry flows into the coffers of American corporations.

An added side benefit is that the US would get to say who has access to this oil, which effectively neutralises the threat of China, even if this results in disasters like Darfur.

As a consequence of our trade deficit, around a trillion dollars’ worth of US denominated debt (including $400 billion in US Treasury bonds) is held by China. This gives Beijing enormous leverage over Washington: by offloading big chunks of US debt, China could bring the American economy to its knees. China’s own economy is, according to official figures, expanding at something like 10 per cent a year. Even if the actual figure is closer to 4 or 5 per cent, as some believe, China’s increasing heft poses a threat to US interests. (One fact: China is acquiring new submarines five times faster than the US.) And the main constraint on China’s growth is its access to energy – which, with the US in control of the biggest share of world oil, would largely be at Washington’s sufferance. Thus is the Chinese threat neutralised.

So, by controlling the world's access to oil the US leaves China scraping the planet seeking oil where it can, resulting in the Chinese being unwilling to condemn atrocities in Darfur lest it be cut off from even this supply.

It's a dirty, nasty, nasty business. But Republicans will still look you in the face and claim that the war was nothing to do with oil, it was about "liberating Iraqis", those same people whose deaths the Bush administration don't even bother to count.

Click title for Holt's entire article which is well worth reading.

Tags: Jim Holt, Iraq war, oil, China, Darfur