Iraqi Oil – A History

The Struggle over Iraqi Oil: Eyes Eternally on the Prize
By Michael Schwartz

The struggle over Iraqi oil has been going on for a long, long time. One could date it back to 1980 when President Jimmy Carter — before his Habitat for Humanity days — declared that Persian Gulf oil was “vital” to American national interests. So vital was it, he announced, that the U.S. would use “any means necessary, including military force” to sustain access to it. Soon afterwards, he announced the creation of a Rapid Deployment Joint Task Force, a new military command structure that would eventually develop into United States Central Command (Centcom) and give future presidents the ability to intervene relatively quickly and massively in the region.

Or we could date it all the way back to World War II, when British officials declared Middle Eastern oil “a vital prize for any power interested in world influence or domination,” and U.S. officials seconded the thought, calling it “a stupendous source of strategic power and one of the greatest material prizes in world history.”

The date when the struggle for Iraqi oil began is less critical than our ability to trace the ever growing willingness to use “any means necessary” to control such a “vital prize” into the present. We know, for example, that, before and after he ascended to the Vice-Presidency, Dick Cheney has had his eye squarely on the prize. In 1999, for example, he told the Institute of Petroleum Engineers that, when it came to satisfying the exploding demand for oil, “the Middle East, with two thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies.” The mysterious Energy Task Force he headed on taking office in 2001 eschewed conservation or developing alternative sources as the main response to any impending energy crisis, preferring instead to make the Middle East “a primary focus of U.S. international energy policy.” As part of this focus, the Task Force recommended that the administration put its energy, so to speak, into convincing Middle Eastern countries “to open up areas of their energy sectors to foreign investment” — in other words, into a policy of reversing 25 years of state control over the petroleum industry in the region.

The Energy Task Force set about planning how to accomplish this historic reversal. We know, for instance, that it scrutinized a detailed map of Iraq’s oil fields, together with the (non-American) oil companies scheduled to develop them (once the UN sanctions still in place on Saddam Hussein’s regime were lifted). It then worked jointly with the administration’s national security team to find a compatible combination of military and economic policies that might inject American power into this equation. According to Jane Mayer of The New Yorker, the National Security Council directed its staff “to cooperate fully with the Energy Task Force as it considered the ‘melding’ of two seemingly unrelated areas of policy: ‘the review of operational policies towards rogue states,’ such as Iraq, and ‘actions regarding the capture of new and existing oil and gas fields.'”

While we cannot be sure that this planning itself was instrumental in setting the U.S. on a course toward invading Iraq, we can be sure that plenty of energy was being expended in Washington, planning for the disposition of Iraq’s massive oil reserves once that invasion was successfully executed. In 2002, just a year after Cheney’s Task Force completed its work, and before the U.S. had officially decided to invade Iraq, the State Department “established a working group on oil and energy,” as part of its “Future of Iraq” project. It brought together influential Iraqi exiles, U.S. government officials, and international consultants. Later, several Iraqi members of the group became part of the Iraqi government. The result of the project’s work was a “draft framework for Iraq’s oil policy” that would form the foundation for the energy policy now being considered by the Iraqi Parliament.

The Prize

The specific prize in Iraq is certainly worthy of almost any kind of preoccupation. Indeed, Iraq could someday become the most important source of petrochemical energy on the planet.

According to the U.S. Energy Information Administration, Iraq possesses 115 billion barrels of proven oil reserves, third largest in the world (after Saudi Arabia and Iran). About two-thirds of its known oil reserves are located in Shia southern Iraq, and the final third in Kurdish northern Iraq. However, in energy terms, only about 10% of the country has actually been explored and there is good reason to believe that modern methods — which have not been applied since the beginning of the Iraq-Iran War in 1980 — might well uncover magnitudes more oil. Estimates of the possible new finds offered by officials of various interested governments range from 45 billion to 214 billion additional barrels, depending on the source; but some non-governmental experts see the final treasure exceeding 400 billion barrels. If the latter figure is correct, then Iraq would likely become the world’s largest source of oil.

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