Bush’s pipe dreams for
Nine months after the fall of Baghdad, as insurgents target oil
installations and Iraqis queue for fuel, the Bush administration has
abandoned its pre-war assertions that Iraq’s natural resources would
largely fund reconstruction.
While opinion polls still show a majority of Americans support the war,
most do not think they should be paying so much for Iraq’s rebuilding.
Before the war, US officials engaged in a delicate balancing act. They
sought to counter the pervasive belief in the Middle East and Europe that
the war was all about oil, while vaguely telling the US taxpayer not to
worry about the cost.
Behind the scenes, however, senior figures in the administration –
including Donald Rumsfeld, defence secretary, Douglas Feith, in charge of
Pentagon postwar planning, Vice-President Richard Cheney, as well as the
CIA’s George Tenet – were being advised by former officials, experts
and corporate bosses that the badly dilapidated Iraqi oil industry in no
way represented a financial lifeline.
“With all the information available, it seems that those in charge chose
not to know,” commented James Placke, a senior associate at Cambridge
Energy Research Associates who took part in “Iraq: The Day After”, a
report produced by the Council on Foreign Relations (CFR) shortly before
the war. “Like other aspects of Iraq, those making policy believed what
they wanted to believe about oil, without reference to the facts,”
Placke did not personally brief administration officials, but James
Schlesinger, former secretary of defence and energy, was one who did.
Schlesinger, who co-chaired the independent “task-force” set up by the
CFR, said “nobody” believed oil revenues would support reconstruction
costs. But there was an expectation the industry could be revived more
quickly than has proved the case.
“There was a great deal of optimism about likely expenditures. I don’t
know if they didn’t want to face up to realities, or come clean with
their gloomier forecasts,” he said, referring to the administration’s
own internal studies. He said his advice followed that of the CFR report:
that after production costs, the oil industry would provide at most an
annual $10bn to $12bn, if captured intact with no further deterioration.
The CFR study also noted that by late February, the Pentagon had still not
worked out its plans. Feith was quoted as saying: “We do not have final
decisions . . . on exactly how we would organise the mechanism to produce
and market the oil for the benefit of the people of Iraq.”
An industry expert who briefed Feith said big oil companies had delivered
a clear message that the US could not expect them to plough money into
Iraq until the occupying forces had resolved the issues of sovereignty and
Nonetheless US officials acted as if companies would be hammering at the
door, that it would be more of a question of keeping out the French and
Russians, who had signed provisional oil deals with Saddam Hussein’s
Analysts also pointed out that there had been no shortage of information
on the state of the Iraqi oil industry. Regular updates came from the
United Nations, which implemented the oil-for-food programme.
“Lamentable” was how Kofi Annan, UN secretary-general, described the
Iraqi oil industry in December 1998, citing a study completed for the UN
by Saybolt, a Dutch company. Production was then estimated at 2.5m barrels
per day (bpd), with about 1.8m available for export. At today’s prices
that would be worth about $20bn annually.
Nonetheless, in the build-up to hostilities, Americans were given a
different picture. “Iraq, unlike Afghanistan, is a rather wealthy
country,” Ari Fleischer, then White House spokesman, said on February 18
last year. “Iraq has tremendous resources that belong to the Iraqi
people . . . Iraq has to be able to shoulder much of the burden for their
Paul Wolfowitz, deputy defence secretary, was even more upbeat before a
hearing of the House of
Representatives appropriations committee on March
27. “There’s a lot of money to pay for this that doesn’t have to be
US taxpayer money, and it starts with the assets of the Iraqi people,”
he said. “On a rough recollection, the oil revenues of that country
could bring between $50bn and $100bn over the course of the next two or
The same day, Rumsfeld told a Senate hearing: “When it comes to
reconstruction, before we turn to the American taxpayer, we will turn
first to the resources of the Iraqi government and the international
community.” – Financial Times
How can we manifest peace on
earth if we do not include everyone (all races, all nations, all religions, both
sexes) in our vision of Peace?
The WorldPeace Banner
To order a WorldPeace Insignia lapel pin, go to: Order
To the John WorldPeace Galleries Page
To the WorldPeace Peace Page