Did BP Have Special Reason to Worry about the Iraq War for Oil?
The Independent reveals what we’ve always known: the Iraq War was about oil. Or rather, there were significant discussions in Fall 2002–the period when the US and UK were busy lying us into war–about who would get Iraq’s oil. (h/t Susie)
The article describes BP’s judgment that Iraq was “the big oil prospect. BP is desperate to get in there” and “more important than anything we’ve seen for a long time.”
Lady Symons agreed to lobby the Bush administration on BP’s behalf because the oil giant feared it was being “locked out” of deals that Washington was quietly striking with US, French and Russian governments and their energy firms.Minutes of a meeting with BP, Shell and BG (formerly British Gas) on 31 October 2002 read: “Baroness Symons agreed that it would be difficult to justify British companies losing out in Iraq in that way if the UK had itself been a conspicuous supporter of the US government throughout the crisis.”
The minister then promised to “report back to the companies before Christmas” on her lobbying efforts.
The Foreign Office invited BP in on 6 November 2002 to talk about opportunities in Iraq “post regime change”. Its minutes state: “Iraq is the big oil prospect. BP is desperate to get in there and anxious that political deals should not deny them the opportunity.”
After another meeting, this one in October 2002, the Foreign Office’s Middle East director at the time, Edward Chaplin, noted: “Shell and BP could not afford not to have a stake in [Iraq] for the sake of their long-term future… We were determined to get a fair slice of the action for UK companies in a post-Saddam Iraq.”
Whereas BP was insisting in public that it had “no strategic interest” in Iraq, in private it told the Foreign Office that Iraq was “more important than anything we’ve seen for a long time”.
But the article doesn’t comment on why BP might be so concerned that the US would lock BP (and Shell and British Gas) out of Iraqi oil development.
Perhaps this might explain it:
From the beginning, it was clear that Cheney was running the show, chairing meetings of the task force — comprised of about a dozen Cabinet officers and senior officials — in his ceremonial office in the Eisenhower Executive Office Building. Much of the task force’s work was done by a six-person staff, led by its executive director, Andrew Lundquist, a former aide to Republican Sens. Ted Stevens and Frank Murkowski of Alaska. In 2000, Lundquist was the Bush campaign’s energy expert; Bush nicknamed him “Light Bulb.”
Today, Lundquist is a lobbyist and has represented some of the companies who appeared before the task force, such as BP, Duke Energy and the American Petroleum Institute. He did not return phone calls for this article.
[snip]
Cheney appears to have played a more behind-the-scenes role in the task force’s deliberations, the document indicates, listing only a handful of meetings with the vice president. Those included a previously reported meeting with Lay, who died last year; a meeting with officials from Sandia National Laboratories to discuss their economic models of the energy industry; and two sets of meetings with lawmakers. Cheney had other meetings, such as with John Browne, then the chief executive of BP, that were not listed on the task force’s calendar. [my emphasis]
So in addition to the March 22, 2001 meeting that a bunch of BP folks had as part of the “official” Energy Task Force meetings, BP’s CEO John Browne had his very own meeting with Cheney during the Energy Task Force discussions. And among other things the Task Force was discussing were Iraq’s oil fields and the companies already trying to develop them.
Now, frankly, it wouldn’t take a smarty pants to worry about Americans seizing Iraq’s fields. Only very naive people believed the Iraq War was not about oil. But BP, which–aside from a number of Canadian companies–was almost the only nominally foreign company to be included in the Energy Task Force discussions (two Shell people had a meeting after the report was substantially finished), almost certainly had its own reason to worry about Americans looting Iraqi oil after regime change.
This was mentioned on Democracy Now! this morning.
The recent disclosures dealt with the UK — Greg Palast looks at the U.S.
excerpt from Palast:
“It’s about oil,” Robert Ebel told me. Who is Ebel? Formerly the CIA’s top oil analyst, he was sent by the Pentagon, about a month before the invasion, to a secret confab in London with Saddam’s former oil minister to finalize the plans for “liberating” Iraq’s oil industry. In London, Bush’s emissary Ebel also instructed Ibrahim Bahr al-Ulum, the man the Pentagon would choose as post-OIF oil minister for Iraq, on the correct method of disposing Iraq’s crude.
And what did the USA want Iraq to do with Iraq’s oil? The answer will surprise many of you: and it is uglier, more twisted, devilish and devious than anything imagined by the most conspiracy-addicted blogger. The answer can be found in a 323-page plan for Iraq’s oil secretly drafted by the State Department. Our team got a hold of a copy; how, doesn’t matter. The key thing is what’s inside this thick Bush diktat: a directive to Iraqis to maintain a state oil company that will “enhance its relationship with OPEC.”
Enhance its relationship with OPEC??? How strange: the government of the United States ordering Iraq to support the very OPEC oil cartel which is strangling our nation with outrageously high prices for crude.
Specifically, the system ordered up by the Bush cabal would keep a lid on Iraq’s oil production — limiting Iraq’s oil pumping to the tight quota set by Saudi Arabia and the OPEC cartel.
There you have it. Yes, Bush went in for the oil — not to get more of Iraq’s oil, but to prevent Iraq producing too much of it.
Meanwhile, Laura Rozen describes that Bandar has gone shopping for a replacement to his American praetorian guards.
WND Exclusive FROM JOSEPH FARAH’S G2 BULLETIN
Pakistan poised to dispatch army to Saudi Arabia
Move seen as effort to assure Sunni Islam dominance
Posted: April 07, 2011
WorldNetDaily
Pakistan is prepared to move two army divisions into Saudi Arabia to protect the kingdom in the event of any outbreak of trouble, such as what has happened in Bahrain, Yemen, Egypt, Libya and other Middle East and North African nations, informed sources say in a report from Joseph Farah’s G2 Bulletin.
It also is ready to help recruit ex-Pakistani military personnel for Bahrain’s national guard, the sources report.
The sources said the decision was reached reluctantly, but it puts Sunni Islam-majority Pakistan alongside other Sunni Muslim partners, Saudi Arabia and Bahrain, in a move that apparently is intended to assure that Sunni Islam remains dominant in the Arab world.
The perception is that the influence of Shiite Islam-dominated Iran is on the rise. (end article)
Saudi Arabia is concerned not only about Iran, but with Iran’s new ally Iraq. The word is that the Shi’ite aligned factions will use the impending U.S. troop departure to attack what remains of the Sunni factions, which would anger Sunni Saudi Arabia.
And, I might add, the Iraq war has been successful at limiting Iraq oil production.
Palast had that thought for a long time. Interesting to see that he’s finally gotten documentation.
When I first read it in Palast (Armed Madhouse), it was one of those smacking the forehead things. It’s so obvious. Oil corps make much higher profits by limiting production & raising prices than they do by producing a lot at lower prices.
It was mentioned in this post several hours before Susie’s, which also mentioned the irony that the US Supreme Court decided that Cheney’s “energy task force’s” records need not be disclosed under FOIA.
You are sadly correct: only Serious observers and those who made a living inside the Beltway doubted that CheneyBush’s 2003 invasion centered around oil. The same motivation is certainly what motivate us to oust Qaddafi in Libya. We don’t seem to be doing much to promote “freeeedom” or to prevent dramatic harm to civilians in West Africa or in cooperative Gulf States.
The Financial Times prominently mentioned Libyan oil about a week after the unrest started in that country.
As you point out, it was obvious at the time, from the hidden schedules, meetings and records, and not so hidden lack of invitations to non-energy company interests, that former oil services company CEO Dick Cheney – still indirectly on Halliburton’s payroll – did not seriously consider any interests but Big Oil’s.
One among Mr. Cheney’s many infamous quotes characterized conservation and environmentalism as personal virtues, but not a fit basis for government policy.
I think it is as much a mistake to say that Iraq was “about oil” as it is to say that it was “about WMD”. The Iraq War was about Cheney furthering his notion of the imperial presidency. If you want to understand the reasons for the Iraq War, you just need to go read the minority report from the congressional investigation of the Iran Contra affair. Cheney (or rather David Addington writing on Cheney’s behalf) lays it all out. I would summarize it by saying that Cheney wants the Executive Branch to function like an elected version of the Roman Emperor. The war was a tool for him.
You beat me to it. I was going to post:
All of this has me thinking about Iran Contra and BCCI…
Hmmm…Guess it is just a short jump from this post to the Ghobanifar timeline…
Not quite. WMD’s were a mirage, a McGuffin. Oil was very real, and it’s back at record prices. I agree, though, that the meaning ascribed to oil comes from the void of Dick Cheney’s soul and his Iago-like hunger for hidden, unaccountable power.
I’d actually go further and say that the Iraq war was an irrational response to a very real problem.
We know the Energy Task Force confirmed what we all know: we’ve reached peak oil (though 2001 was probably 5 years or so before peak).
US power is based on oil. Everything–our economic system, our social organization, the means by which we exercise hegemony through the dollar and trade–flows from that.
So Cheney decided, rather than use the twilight years of our hegemony to launch a Manhattan Project to find alternative sources, rather than use our twilight years to establish a more stable international system of governance, we would double down, using our hard power to control resources (and the Middle East) for the period of transition into peak.
It would have been a stupid approach even if we were successful in Iraq, which we weren’t. But it was a response to real problems.
US petroleum hegemony is, as you say, “a response to a problem”.
However the “problem” for American “leadership” is about securing the flow of oil, specifically, when and to whom, quite as well as protecting the “interests” of the “industry” which actually plays a substantial role in the determination of those “rates” and their “costs” … in so far as speculation by the legacy class permits.
It is “big stick” stuff, and not ammenable to reason or even extant reality.
“Control” is “worth” killing huge numbers of human beings over and destroying the enviroment itself in pursuit of. Oil drives foreign policy quite as much as it powers Chevys (the manufacture of which BTW, we are now informed, GM’s management wishes to be more lucrative for the executive class even if that means that the public takes the “hit” … for a recent “bail-out” …).
This policy of total Control has NEVER been subject to informed public debate nor shall it be, yet its most nasty aspects are, when push comes to shove, ALWAYS perpetrated in the name of the American people …
You are correct, it IS irrational and stupid.
And the rest of the world would not be wrong to consider that much of America’s behavior falls into that category.
One merely wonders when that reality might dawn on Americans?
It may be that one man, Cheney, is behind the major irrational stupidity, however none of the money or power elite sought to gainsay him then … or since … irrational stupidity yet reigns supreme, and looks to continue so, as they say … looking forward.
DW
I agree with that analysis. That’s why I think it a valid exercise to gauge the cost of, say, the Iraq War on a per barrel of oil basis. Pictures are still worth a thousand words.
The American penchant is for “big quick fixes”, violent and abuses or otherwise. What seems obvious is that we need a myriad of small and large fixes.
Those might include home conservation and home-produced energy supplies – solar, wind, geothermal, whatever the homeowner can afford and safely produce. We need large-scale new ventures, too: marine wind farms and wave farms, solar arrays. Conservation is not simply a personal choice, it’s a societal imperative. One approach would be to adopt new construction codes that maximize conservation of all forms of energy and minimize harmful emissions, such as CO2 released by curing concrete over the structure’s lifespan.
I don’t think Cheney is that forward-looking. He has the uniquely American conservative’s unshakeable faith in our own exceptionalism that precludes him from thinking that our hegemony will ever be threatened by outside factors. Oil may have helped determine that the war he wanted would be in Iraq because Cheney understood the value of oil, but it wasn’t the driving motivation for the war itself. Just like the rubes could be fooled with the WMD “mushroom cloud” fantasy, the business type could be bought off with promises of oil.
When EOH says that the WMD threat was a mirage and oil is real, he’s missing the point. As Harry Frankfurt famously pointed out in his seminal work “On Bullshit”, the bullshitter knows that the truth value of his propositions are irrelevant to their usefulness. All of the justifications of the Iraq war were bullshit (to use Frankfurt’s academic term of art). That includes WMD, oil, Saddam is a monster, spreading democracy, al Qaeda, and anything else I’ve forgotten. We needed a war. Iraq was available. Therefore, the United States of America launched a war of agression against a weak country simply to push us closer to a dictatorship. The sooner we all recognize this, the better.
Thank you.
Well written insights.
I agree we needed the absolute power. But that all lies in the GWOT and the power grab that came, unnecessarily for that. Iraq was something they wanted before that, had been working on for some time.
Absolute power is only useful if you have power across the world. Otherwise you might as well be Burma. And they believed Iraq was the means to sustain that power. That is, unlike the GWOT, it has less to do with keeping us in line than in making sure it’s all worth it.
Dictatorship, like oil, is a means to an end, not the end itself. The end is power, its protection and growth, its freedom from restraint, its demonstration and use. Such things defined Dick Cheney’s administration, from his secrets to his abuse of policy making and policy makers to his wars.
WMD’s were a McGuffin. They make the narrative enthralling; they aren’t the narrative. Don Corleone’s being a mobster was a McGuffin; it provided the background for a story about romance, murder and betrayal. Organized crime, noticeably absent in the film, just made money.
Oil, developing it, withholding it from the market, or being at war over it makes money. Lots and lots and lots of it. But the narrative is primarily about power, not money or sex.
It’s also not about the economics of oil in the traditional sense. It’s about using oil to redistribute income upwards, not whether one form of oil is cheaper, cleaner to refine, or more accurately priced or effectively marketed than another.
I’d actually go further and say that the Iraq war was an irrational response to a very real problem.
Oh, yeah! Or to two of them, the other being as Ockham said, Cheney’s essential marginality in any rational oil regime such as the one he upset.
Absolutely.
My first thoughts reading EW’s post were ‘We’re an empire now, and we can do what we like.’ I agree that the agenda was wider. People have also noted from time to time that the serious ‘geopolitical thinkers’ (an oxymoron in my book) were looking a head to a global conflict with China over scarce resources.
There seems to be some kind of adverse selection bias that brings people who can’t think straight to the top of the Village.
The Village is all about preserving the Village. The risk to be minimized — ideally, avoided entirely — is taking on a new member who is a high risk of disrupting the Village. Adverse selection, in this case, would be for the Village to allow entry to too many disruptive types.
They don’t do that. Entry is strictly limited to those who either have ties to what sustains the Village — money and power — or are willing to kowtow to it. Thus, we have the “best geopolitical thinkers” that money and power can buy.
I‘ve left this snippet on EW threads in the past, but it seems particularly apt in view of the comments @7:
When I think of the war to be “about oil,” I recall Saddam’s threats in 2000 to drop the petrodollar in favor of the euro for oil pricing.
And hasn’t Iran more recently done exactly that (drop the petrodollar)?
Much more than that. China’s moving to a basket and the BRICs are moving toward paying each other in, IIRC< each other's currency.
The dollar reserve is not long for this world.
Speaking of Iran and things ME, from McClatchy:
State Department cables reveal U.S. thirst for all things Iranian
McClatchy’s reporting is based upon another bunch of Wikileaks cables.
OT – From MSNBC’s Jim Miklaszewski’s piece on the Bradley Manning move:
I guess it’s been announced, then. Anyway, here’s AP
WikiLeaks Suspect Being Moved Out of Quantico
By THE ASSOCIATED PRESS
Published: April 19, 2011 at 6:09 PM ET
“WASHINGTON (AP) — A Pentagon official says the Army private suspected of giving classified data to WikiLeaks is being moved to a state-of-the-art facility at Fort Leavenworth in Kansas. But the Pentagon’s general counsel says this does not suggest that the soldier’s treatment of the soldier at the Marine Corps base at Quantico, Va., was inappropriate.”
LINK.
You must have missed this FDL front page post.
No criticism implied since I myself spend more time at Rancho Emptywheel than at the FDL front page.
Sure did (I was out in the yard inhaling lots of pollen). Thanks for letting me know, MadDog.
bmull provided this link over at Dayen’s Roundup this evening (Comments). It’s quite interesting, from Coombs, the lawyer.
You have an important blog. Don’t diminish it. Stay out of foreign policy that you do not understand. ‘Control Oil.’ Saddam was the oil interests best friend. A reliable client. Control Oil? The US could not control the highway from Bagdad to the ariport. It cannot now control the roads leading to the Green Zone. Control Oil? There are 4000 miles of pipeline in Iraq. Iraq pipelines? Study the Irgun. Study T.E. Lawrence. Among others. Saddam was B.P.’s friend. He was, in terms of oil, Wall Street’s friend.
Oil was not the reason.
What can actually be done and what PTB think they can do in advance might be two entirely separate items.
Besides, if the object was to make sure Iraq oil production was restricted, then everything you argue supports the case for war.
Then clue us in? How about a deal to steal Iraq’s oil, cut between the Brits, US, and Saudi Arabia, while squeezing Iran?
Considerable stretch of Iraq/Saudi border along Al Anbar province which conveniently has a Saudi pipeline running the border’s length. How about setting up horizontal drilling rigs, drill under the border and tap that sweet crude beneath Iraq’s Al Anbar desert? Now with Iraq pacified by foreign occupation Saudis with the aide of the west can rip Iraq off blindly. With Saddam gone, so to are the dirty little secrets, the world will never know!
http://www.consumerenergyreport.com/wp-content/uploads/2010/10/oil-pipelines-middle-east.jpg
http://newsimg.bbc.co.uk/media/images/40227000/gif/_40227869_saudi_pipelines2_map416.gif
http://en.wikipedia.org/wiki/Trans-Arabian_Pipeline
Just reopen the pipeline and set up Horizontal drilling rigs! Beside wtf do Americans care about Saudi’s intentions? We just need the energy
http://www.saudiaramco.com/irj/go/km/docs/SaudiAramcoPublic/Publications/EN/Journal%20of%20Technology/Winter2009/Art%2013%20-%20Internet%20-%20Final.pdf
http://www.time.com/time/world/article/0,8599,1614000,00.html
“But for Iraqi politicians the more dramatic news might be where the country’s unexpected reserves lie, rather than their size. The report says about 100 billion barrels of oil and a large amount of gas lie in the Sunni-dominated Al-Anbar province. Until now, Sunni politicians have feared economic devastation if Iraq divided into a federation or imploded into disparate ethnic states, since the territory dominated by their ethnic group was thought to be the only one without large reserves of oil. (Both the Shi’ite south and Kurdish north have productive fields.) “The Western desert has lain dormant,” says Colin Lothian, senior analyst on Middle East energy for Wood Mackenzie, an international energy research and consultancy. “It’s not out of the realm of possibility.”
“The fact that Sunni areas hold massive reserves could roil the precarious negotiations over Iraq’s proposed new oil law, which would effectively end Iraq’s nationalized oil industry and hand over substantial power to the regions. The Kurdish north and the Shi’a south are reluctant to allow the central government in Baghdad too much say over their regional oil production, according to sources who have attended the negotiations over the new oil law. Yet a strong role for the central government has helped calm Sunni fears of being left out of oil revenues. The law is crucial for Iraq’s economic survival — and its ability to ease its dependence on U.S. funds — since no international oil company can begin work without it. Prime Minister Nouri Al-Maliki wants a vote in parliament by the end of May. But talks in Dubai last week left even one of the law’s authors grim about its prospects. “I can assure you the law will have a very rough ride in parliament,” says Tariq Shafiq, an Iraqi petroleum consultant in London after the Dubai meeting. “I expect at least 30 to 50% objection.” The new Sunni oil potential adds another huge and volatile element to the talks.”
Call it instinct! Monopolies in commerce and trade!
Iraq had 10% proven world reserves.
Remove 10% of the worlds allowed oil production off the market walla $ 4.+ a gallon for the same product that was selling around $ 1.50 before the war.
Would any sane human take all the oil out of their crankcase of their FUVs for heat or light?
The plates may get a little jerky, right Japan ?
Do you think earths complex interactive systems can function without oil.
We’re going to find out now or in future generations that answer.
that’s interesting, have not seen that idea before.
what are the effects of removing half a billion years accumulation from the crust, in one hundred years.
It is thought that the loss of the glaciers will result in increased earth quakes. the weight.
why not the same for the weight of the oil?
wow.
It’s even worse than that.
Greed kills period.
When they extract the oil which has near zero heat conductivity, to get the very last drops they inject boiling water, which by the way has about 100% heat conductivity. Would that matter sitting on a molten core ?
Truth is global warming is occurring above and below us, meaning we are double F worded.
Enjoy the time left.
Thanks EW and all for this fascinating conversation. The link between 9/11 and the invasion of Iraq has always been a problematic one, but from the above I am thinking that the link is: Saudi Arabia.
I am remembering that whilst we thought of Cheney as our real life version of Darth Vader, in those movies as well, there was a power behind even the evil Darth: Saudi Arabia. When they beckoned, Cheney hopped on a plane and was there in a twinkle.
The other point I am remembering is that Iraq was developing wells that encroached underground on Saudi Arabian oilfields. So, not only would they have been a threat in oversupplying the market, but they were also doing it by means of the Saudi Arabian dominance, threatening same.
Not only all of this, but an invasion would and did distract from the uncomfortable fact that most of the hijackers were Saudis.
The favorable connection between Iraq and BP, in its infancy but potentially formidable under Saddam Hussein, might have been a stumbling block for the British which needed additional reassurance that after Hussein was obliterated they still could get a piece of the pie. Well, yes, sez Cheney, lapdog of the Saudis, (I am supposing); you can have it, but only if you wholeheartedly support what we are about to do.
Am I reading this right?
Marcy,
As per the usual, your post was excellent and the analysis is “spot-on”.
To wit, Neo-conservatives process “infalliblity” and the Neo-liberal process “exceptionalism” and both processes inflict considerable damage onto our politics. And as such, neither exists, from my perspective here in the Southwest. To wit, if Canada was one of the world’s leading producers of oil, Canada would be, at a bare minimum, a “colony” of the USA.
Therefore, “restricting” the Iraqi output, makes sense, since the Bush Family “manages and controls” the Saudi money spigot here in the USA.
Jaango
America’s “irony” is easily located and commencing in 1980 (the Reagan Era), when the Dept of Energy and DARPA invested, little if any, monies in R&D for batteries. As such, batteries that could store large amounts of energy and for long periods of time, still does not exist. Consequently, public policies for “empowering Individuals” and “empowering industries” still has not arrived.
Jaango