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It’s the Oil Stupid

by JASON LEOPOLD

Why is it so difficult to accept the fact that America’s thirst for oil is the primary reason for waging a war against Iraq? For months, foreign journalists have reported that the United States has been running low on oil–a fact–and only by using military force in Iraq would the U.S. be able tap into the region’s oil wells to meet the threat of supply shortages here.

But to try and argue in the mainstream media that the U.S. is only interested in starting a war with Iraq because of its vast oil supplies and you’re immediately branded a conspiracy theorist. That’s why most U.S. journalists don’t even bother to explore the possibility, according to media experts.

“The media doesn’t want to cross the president,” said Sherry Bebitch Jeffe, a media expert and senior scholar at the University of Southern California’s School of Policy, Planning and Development. “I’ve only seen one or two articles in the mainstream media about oil being the reason for a war against Iraq. There is not real investigative reporting in the mainstream media here because reporters don’t care or have the kind of energy necessary to investigate thoroughly that oil could be behind a war with Iraq. But it’s appropriate to ask that question and debate it.”

Even a mountain of evidence prepared by Bush’s cronies that proves the Administration discussed military action in Iraq prior to the September 11 terrorist attacks in an effort to secure oil from the region is not enough to sway Western journalists who instead report that Iraq’s alleged weapons of mass destruction is the reason behind a possible U.S. led initiative to attack the country. But that’s not accurate nor is it the truth. Simply put, demand for oil in the U.S. has reached an all-time high. We can no longer depend upon the Oil Petroleum Exporting Countries, or OPEC, to increase production to quench our thirst and make up the shortfall by the embargo the United Nations placed on Iraqi oil after the first Gulf War. The only solution is to tap into new sources. That’s where Iraq comes in and it’s the reason the U.S. is prepared to launch a full-scaled attack on the country.

Since the United Nations embargo on Iraqi and Kuwaiti oil in August 1990, some 5 million barrels per day of oil has been removed from the market. Other OPEC countries increased their production capacity to make up the shortfall.

Since the embargo, however, “the resulting tight markets have increased U.S. and global vulnerability to disruption and provided adversaries undue potential influence over the price of oil. Iraq has become a key “swing” producer, posing a difficult situation for the U.S. government,” according to an April 2001 report that was used to help shape Bush’s National Energy Policy.

In order to set the stage for securing Iraqi oil the U.S. should “review policies toward Iraq to lower anti-Americanism in the Middle East and elsewhere; set the groundwork to eventually ease Iraqi oil-field investment restrictions,” the report says. ‘Like it or not, Iraqi (oil) reserves represent a major asset that can quickly add capacity to world oil markets and inject a more competitive tenor to oil trade.”

The Washington, D.C. Council on Foreign Relations, whose members include Vice President Dick Cheney and former Secretary of State Henry Kissinger, and the James A. Baker III Institute for Public Policy prepared the report, Strategic Energy Policy, Challenges for the 21st Century. Key executives in the energy industry helped prepare the report, including former Enron Chairman Kenneth Lay, who according to the New York Times, is under investigation for selling his stock in the disgraced energy company shortly before it imploded in a wave of accounting scandals in October 2001.

In Bush’s State of the Union address last month, he said he would ask Congress to approve research into using alternative fuels, such as hydrogen, to be used for developing a new type of automobile, which the President lifted directly from the Baker report.

Secretary of Defense Donald Rumsfield has been asked numerous times whether the U.S. is after Iraq’s oil supplies and if that’s what is driving this war. Rumsfield’s most recent response to the question was “absolutely not.”

Yet the Baker report suggests that the U.S. should explore the possibility of a regime change in Iraq, line up “key allies” in Europe and Asia and “target (Iraq’s) ability to maintain and acquire weapons of mass destruction” as the reasons behind attacking the country all in an effort to import oil into the U.S.

“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 the goals with respect to Iraqi policy and to restore a cohesive coalition of key allies,” according to the report. “Goals should be designed in a realistic fashion, and they should be clearly and consistently stated and defended to revive U.S. credibility on this issue. Actions and policies to promote these goals should endeavor to enhance the well being of the Iraqi people. Sanctions that are not effective should be phased out and replaced with highly focused and enforced sanctions that target the regime’s ability to maintain and acquire weapons of mass destruction. A new plan of action should be developed to use diplomatic and other means to support U.N. Security Council efforts to build a strong arms-control regime to stem the flow of arms and controlled substances into Iraq. Policy should rebuild coalition cooperation on this issue, while emphasizing the common interest in security. This issue of arms sales to Iraq should be brought near the top of the agenda for dialogue with China and Russia.”

The report also says that once an arms control program is in place the once an arms-control program is in place, the U.S. could consider reducing restrictions on oil investments inside Iraq, a move the Bush administration is against.

“However, such a policy will be quite costly as this trade-off will encourage Saddam Hussein to boast of his “victory” against the United States, fuel his ambitions, and potentially strengthen his regime,” the report says. ‘Once so encouraged and if his access to oil revenues were to be increased by adjustments in oil sanctions, Saddam Hussein could be a greater security threat to U.S. allies in the region if weapons of mass destruction sanctions, weapons regimes, and the coalition against him are not strengthened. Still, the maintenance of continued oil sanctions is becoming increasingly difficult to implement.”

“Until the emerging constraints are overcome, government will need to increase its vigilance and be prepared to deal with sudden supply disruptions. The consequences of inaction could be grave,” according to the report. .

Russia’s resistance to back the U.S. in a war against Iraq has more to do with how adding capacity to world oil markets will hurt Russia’s economy than with the absence of a smoking gun that proves Iraq has weapons of mass destruction.

“Russia could lose from having sanctions eased on Iraq, because Russian companies now benefit from exclusive contracts and Iraqi export capacity is restrained, supporting the price of oil and raising the value of Russian oil exports,” according to the report. “If sanctions covering Iraq’s oil sector were eased and Iraq benefited from infrastructure improvements, Russia might lose its competitive position inside Iraq, and also oil prices might fall over time, hurting the Russian economy.”

JASON LEOPOLD can be reached at: jasonleopold@hotmail.com

 

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JASON LEOPOLD is the former Los Angeles bureau chief of Dow Jones Newswires where he spent two years covering the energy crisis and the Enron bankruptcy. He just finished writing a book about the crisis, due out in December through Rowman & Littlefield. He can be reached at: jasonleopold@hotmail.com

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