Prior to the war in Iraq, peace protesters, the media, and the Governments involved, all spoke about the oil issue, whether it was to accuse or deny. In the “post-war” situation in Iraq however, in the absence of any weapons of mass destruction, little is being said in relation to the oil question. How much proof is there that the invasion was based on corporate concerns? What’s happening to oil production in Iraq at the moment? Three Monkeys Online put these and other questions to James A. Paul, executive director of the Global Policy Forum, based in New York. Paul has studied and written specifically on the historical precedents, and the current evidence that suggest that oil and big business lay at the heart of this invasion.
Is it your basic contention then that the primary motive for the invasion of Iraq was Oil?
Well, I've written a number of articles on the matter. In my view, the war in Iraq was driven primarily by US and UK efforts to control Iraq's oil resources. Of course, complex human events are rarely determined by one single thing. I don't want to make a gross oversimplification here. Obviously there were a variety of factors, linked in a contingent way to this war. The Neo-Cons in the US administration had certain views about a US empire, and the need to impose US will on the rest of the world. Maybe they even had certain fantasies about bringing democracy to the Middle East. There are a variety of ideological and political elements that make up the total picture. But I argue that none of these would have led to either a) war in Iraq, or b) war at this particular time, had it not been for the overwhelmingly important element, the wish to seize control over Iraq's oil resources. In my various articles (Editor's note – see links at end of article) I have tried to argue why oil was such an overwhelming element. I have approached it through an understanding of history – where we see the United Kingdom's wars in Iraq and how a UK company, or company based in and controlled by UK interests, was in control of Iraq's petroleum resources for a very long time. I've tried to approach the matter it from a number of different angles in order to understand it better, and to make the argument more clear and compelling. My conclusion is that oil was the number one factor behind this war.
But what's the key evidence for this?
I didn't start off with a theory about oil. I began by following closely the debates at the United Nations during the years of the sanctions. There was a big split at the UN between the five permanent members of the Security Council, with France, Russia and China in one camp and the US and UK in another. I wondered why there were such deep differences in this split and what was motivating it over the course of over 13 years. I only began to make sense of it when I started to dig into the oil policy and I began to realize that the companies based in those countries were in a fierce competitive battle. The French, Russian and Chinese had been making big deals with Saddam Hussein's regime for renewed private exploitation of Iraq's oil resources – after some thirty years of nationalization — and the US and UK companies were frozen out of those deals. Since the US and UK companies were the biggest in the world, they were very worried that they would be left out. This was especially serious because Iraq has the world's lowest production cost and either the second largest reserves or possibly even the largest reserves in the world.
It became clearer and clearer to me that oil was the critical element. And I found that many diplomats agreed. In fact, they took oil for granted as the central theme of the dispute. As I looked further, I started to add up the value of Iraq's oil reserves, the cost of production in Iraq and the quality of Iraq's oil. I also needed to develop a global picture of the oil industry, including the companies' difficulties replacing their current reserves.
When I began to do this work, and talk with the oil experts, and make some estimates, I began to realise that these were resources of absolutely gigantic value, a value that simply eludes comprehension. One key reason for this is the extremely low cost of production. Iraq has the lowest production cost in the world, as you'll find on the web site of the US Department of Energy. Everyone in the industry knows this. There are several reasons –production is all onshore (with no expensive offshore rigs and deepwater drilling costs), o the oil reservoirs are located very close to the surface, so they are very inexpensive to drill and finally there's very good pressure in the reservoirs. The cost of all exploration and drilling and bringing the oil to the surface comes to only about a dollar a barrel, compared to nearly twenty dollars a barrel in Texas.. So when you have oil selling at over 30 dollars a barrel, as it is today, you can see the potential profit. You multiply the potential profit per barrel by the estimated recoverable barrels and you get a very large number. The US Department of Energy estimates that there is somewhere between two hundred and four hundred billion barrels of oil. When you do the arithmetic, you come up with a potential profit of roughly eight to twelve trillion dollars. Just imagine!
The most profitable oil company in the world is Exxon-Mobil, and its largest corporate profit in any given year was last year, which was twenty two billion dollars. That was the most profitable company in the whole world, ever. But in the case of Iraq we're talking of profits of eight or ten or even twelve trillion dollars – that's a million, million – spread out over fifty years or so. These are profits that would make any corporate CEO's eyeballs bulge. This level of profit brings out gigantic corporate greed. The companies are ready to go to virtually any lengths to get their hands on these resources.
The other thing in the argument is this: if you look at the oil industry across the world, you see many, many cases where local wars and extreme human rights violations have been committed in order to gain control over oil resources. Experts sometimes talk about &ldquonatural resources and conflict” – referring to local wars over timber and diamonds and so forth. But oil makes those other resources pale into insignificance. It is by far the most valuable. So we should not be surprised that it leads to armed conflict. If a civil war in Angola could be fought for thirty years mostly because of diamonds, then certainly a war can be fought in Iraq over oil. In fact, the latest war in Iraq was the seventh war over the country's oil resources since 1914.
In my published essays, I've also looked at the influence of the oil companies over the US Government in the last one hundred years. I've cited a number of cases that illustrate their tremendous influence. And I've also tried to show how the companies were having discussions with the US Government, while in the UK, the UK companies had very close relationships with the UK Government. In this case, we are talking about the governments of Blair and Bush. But Democrats and Republicans, Labour and Tories have had very close relations with the oil companies over the years. So I believe it's an exaggeration to claim that this war came solely out of the Bush family and their special relationship with the oil industry.