The oil connection in Iraq war: Greenspan states the obvious 

By Abdus Sattar Ghazali

ccun.org, September 21, 2007

Alan Greenspan, the former Federal Reserve Bank Chairman has bluntly declared that the Iraq war was 'largely' about oil. Critics of the administration have often argued that while President George Bush cited President Saddam Hussein's pursuit of weapons of mass destruction - which were never found - and his support for terrorism as reasons for the invasion, he was also motivated by a desire to gain access to Iraq's vast oil reserves. In his book, The Age of Turbulence: Adventures in a New World Greenspan writes: “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”

1. Colonial Conquest (1914-18): The first conflict took place during World War I, when the British captured the area from the Ottoman Empire during a bloody four-year campaign.

2. War of Pacification (1918-1930): To defend its oil interests, Britain fought a long war of pacification in Iraq , lasting from 1918 throughout the next decade. The British crushed a country-wide insurrection in 1920 and continued to strike at insurgents with poison gas, airplanes, incendiary bombs, and mobile armored cars, using an occupation force drawn largely from the Indian Army.

3. Re-Occupation (1941): Though Britain granted nominal independence to Iraq in 1932, it maintained a sizeable military force and a large air base in the country and continued to rule “indirectly.” In 1941, fearful that Iraq might fall into the hands of the Axis, London again decided to seize direct control of the country through military force.

4. Iran-Iraq War (1980-88): In 1980, Iraq attacked its neighbor, Iran . A long war ensued through 1988, a savage conflict causing hundreds of thousands of casualties on both sides, costing tens of billions of dollars and destroying much of both countries’ oilfields and vital infrastructure. Foreign governments, interested in gaining geo-strategic advantage over both nations’ oil resources, promoted, encouraged and sustained the war, some arming both sides. The US and the UK supplied Iraq with arms, chemical and biological weapon precursors, military training, satellite targeting and naval support. Other powers participated as well, notably France , Germany and Russia . The big oil companies profited mightily, as war conditions kept Iraqi and Iranian oil off the market, driving worldwide prices substantially higher.

5. Gulf War (1991): Following the Iraqi invasion of Kuwait in August 1990, the US decided to intervene militarily and Washington assembled a number of secondary military partners, including the UK and France . As US President George Bush summed up the oil-centered threat posed by Saddam Hussein at the time: “Our jobs, our way of life, our own freedom and the freedom of friendly countries around the world would all suffer if control of the world’s great oil reserves fell into the hands of Saddam Hussein.”

6. Low Intensity Conflict during the Sanction Period (1991-2003): After the armistice, the UN’s pre-war embargo continued, because the US-UK used their Security Council vetoes to block its lifting.

Oil in Iraq is especially attractive to the big international oil companies because of three factors, namely high quality or high value product, exceptionally low production costs, yielding a high per barrel profit and huge supplies. Iraq ’s proven oil reserves in 2002 were listed at 112.5 billion barrels, about 11% of the world total. The Energy Information Administration of the US Department of Energy has estimated that Iraqi reserves could possibly total over 400 billion barrels. If new exploration fulfills such high-end predictions, Iraq ’s reserves could prove close to those of Saudi Arabia , now listed at 260 billion barrels but likely also to go considerably higher as well.

It may be recalled that President Bush hired an employee from the U.S. consultancy firm Bearing Point Inc. to advise the Iraq Oil Ministry on the drafting and passage of a new national oil law that was opposed by all sections of Iraqi society. Given the levels of resistance to the very idea, this work was conducted in secret and took until the end of 2006 to complete.

Among the most controversial elements of the proposed law are: (1) The Iraqi government would not have control over oil company operations inside Iraq . Any disputes would be referred instead to pro-industry international arbitration panels. (2) No contracts would be public documents. (3) The law would allow the oil companies to fully repatriate all profits from oil sales, almost insuring that the proceeds would not be reinvested in the Iraqi economy. (4) Contacting companies would not be obliged to hire Iraqi workers, and could pursue the current policy of employing American technicians and South Asian manual laborers.

When Iraq 's council of ministers last July suddenly approved the law, critics of various stripes united in opposition. Shiite and Sunni political parties alike denounced it, vowed to defeat it, even threatened to ensure Parliament can't take it up.  

At this point, progress on the oil laws is stalled in Baghdad . The Kurds last August passed their own oil legislation, setting up what has the potential to become a whole new front in Iraq 's multifaceted civil conflict. Senior Kurdish officials -- most of whom are separatists -- have vowed to block any legislation that doesn't include extensive regional autonomy over oil contracting, an issue opposed by most Iraqis and a serious problem for Iraqi nationalists.  

Kurdish Regional Government is directly negotiating contracts for oil exploration with the Western oil companies. And the Dallas-based Hunt Oil Company has become the first international company to receive permission to drill for oil in the Kurdistan region of Northern Iraq . Under its contract with the Kurdistan Regional Government, Hunt will join the Impulse Energy Corporation to survey for oil in the Dihok district this year before drilling its first well in 2008, according to a Hunt Oil statement last week.  

The Chairman of Hunt Oil is none other than Ray Lee Hunt whom President Bush appointed to the President’s Foreign Intelligence Advisory Board that advices the President concerning the quality and adequacy of intelligence collection, of counterintelligence and of other intelligence activities.

 Abdus Sattar Ghazali is the Executive Editor of the online magazine American Muslim Perspective: www.amperspective.com