The Great Iraq Oil Grab

By Joshua Holland, AlterNet. Posted May 22, 2006.

There's a story, perhaps apocryphal, that Pentagon planners wanted to name the invasion of Iraq, "Operation Iraqi Liberation." Only when someone realized that the acronym -- O.I.L. -- might raise some uncomfortable questions, was "Operation Iraqi Freedom" born.

Supporters of the Iraq war airily dismiss chants of "no blood for oil" as a manifestation of the antiwar crowd's naïveté. They point out that Iraq's government still controls its oil and argue that we could have simply bought it on the open market.

Both of those claims are true on their face, but bringing Iraq's vast oil wealth under the control of foreign multinationals -- with U.S. firms the best positioned to develop it -- was always central to U.S. plans for Iraq. That Iraq's oil will continue to be "owned" by the "Iraqi people" is what differentiates classical 19th-century colonialism practiced by British officers in pith helmets from the neocolonialism the United States perfected in the second half of the 20th century. The newer brand can be summed up like this: We'll respect your sovereignty and abide by your domestic laws -- as long as we can help you write those laws to guarantee our firms' profits.

That's the central tenet of corporate globalization. Trade deals like NAFTA -- and the agreements implemented by the WTO -- are designed to "harmonize" countries' domestic laws regulating everything from capital flow to food safety to the environment in order to make them friendly to international investment. In Iraq, that philosophy was taken to an extreme, at gunpoint and with disastrous consequences.

Oil -- the engine that drives Iraq's potentially rich economy -- was the prize that made it worth a full-scale commitment of American armed forces.

Oil lust

It was a prize that the first oil presidency -- the president, vice president and national security advisor are all former oil execs -- lusted after long before the attacks of 9/11. The Washington Post reported that even as the Bush transition team prepared to take power in 2001, changing Iraq's regime and seizing its oil were already on the table:

Early discussions among the administration's national security "principals" -- Cheney, Powell, Tenet and national security adviser Condoleezza Rice -- and their deputies focused on how to weaken Hussein diplomatically. But Deputy Defense Secretary Wolfowitz proposed sending in the military to seize Iraq's southern oil fields and establish the area as a foothold from which opposition groups could overthrow Hussein.

Former Treasury Secretary Paul O'Neill told author Ron Suskind that Dick Cheney also supported an invasion of Iraq before Sept. 11, and the New Yorker's Jane Mayer reported on a top secret National Security Council document dating back seven months before the terror attacks that gave some insight into the vice president's thinking:

It directed the N.S.C. staff to cooperate fully with [Cheney's secretive] 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."

In her new book, “The Bush Agenda,” Antonia Juhasz detailed how, six months before the invasion, the administration brought in a group of oil executives to advise them on Iraqi oil policy (this occurred as President Bush was telling the American people that he had no intention of going to war). The State Department also set up a consulting group under the "Future of Iraq Project" called the "Oil and Energy Working Group." After some back and forth among the various consultants, a consensus was reached that Iraq's oil "should be opened to international oil companies as quickly as possible after the war."

But they couldn't just say that, or the war's proponents wouldn't be able to sneer at those unruly antiwar types. After the invasion, the administration did a yeoman's job of deflecting the criticism; Bush called Iraq's oil wealth its "patrimony" and promised it would stay in the hands of the Iraqi people. When all of Iraq's state firms were privatized, the administration exempted Iraq's national oil company.

Joshua Holland is an AlterNet staff writer.

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