Term Paper on "Iraq and Oil"

Term Paper 10 pages (3492 words) Sources: 15

[EXCERPT] . . . .

Oil and the U.S.

In his 2006 State of the Union Address, President Bush stated the obvious: "Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world." The Bush administration denied that oil had anything to do with the decision to invade Iraq in 2003. Defense Secretary Donald Rumsfeld defended this official position vehemently, repeatedly telling the press things like, "This has nothing to do with oil in my modest opinion," (Sample 2003). However, three years later no one in the administration could avoid more frankly addressing the oil-related motives in the Iraq war. The Iraq imbroglio and the outrageous amount of taxpayer money being spent on it were and are in fact very much due to petroleum. As the world's oil resources vanish, past what is known as "peak oil," market demand continues to rise worldwide. The United States currently remains the planet's biggest consumer of petroleum resources but fast-growing nations like China stand poised to surpass American consumption due to burgeoning industrial development.

Regardless of what the rest of the world is doing, the United States has done little to nothing to reduce its dependence on oil. Dependence on oil in itself creates significant environmental policy problems and practical problems like pollution. However, dependence on foreign sources of oil results in severe political, military, and humanitarian problems like the current crisis in Iraq.

Imported oil accounts for about two-thirds of U.S. consumption," (CIA). In past years, the United States has imported nearly half of its consumed oil ("What is Petroleum and History of Oil"). Therefore, the United States has a vested interest in the sources of its foreign oil, and a definite interest in securing those sources. With a GDP greater than that of any other nation and a military budget to boot, the United States can well afford to devote resources to secure its most crucial commodity: oil.

Historically, Iraq has never been a top source for oil imports to the United States. Canada, Saudi Arabia, Mexico and Venezuela export more to the United States than Iraq, especially since trade embargoes against Iraq were instated during the first Gulf War (Churchill 2000). However, Iraq and its oil reserves provide potential future resources as the world's total supply of petroleum dries up. Scott (2003) points out that "Iraq's proven oil reserves are 113 billion barrels, the second largest in the world after Saudi Arabia, and eleven percent of the world's total. The total reserves could be 200 million barrels or more." Moreover, Iraq's oil is "relatively easy and cheap to extract," (Scott 2003). When it invaded in 2003, the Bush administration saw in Iraq the opportunity for increased access to these potentially lucrative and productive oil reserves. Moreover, Iraq would offer the United States a strategic outpost from which to control the Middle East's collective petroleum resources. "Washington's War on Iraq is the lynchpin to controlling Persian Gulf Oil," (Renner, cited by Scott 2003).

Access to Iraq's oil wells serves a more direct economic function. A member of the Organization of Petroleum Exporting Countries (OPEC), Iraq is a key to crude oil pricing. Interestingly, OPEC was founded in Baghdad in 1960, proving the centrality of Iraq in the American quest for oil. In the 1970s, OPEC declared an embargo and proceeded to control the production of oil as a means to control its price per barrel. As a result, OPEC has been frankly described as "a cartel with the purpose of maximizing the price of wholesale petroleum to world markets," (State Department Watch). The United States therefore sought the means by which to interfere with OPEC's pricing strategies to regulate the oil market to its own needs. Those needs reflect OPEC's goals and objectives: to regulate the price of oil. Motivation to invade Iraq for oil-related reasons was obvious soon after Bush took office, when Iraq produced about 11% of OPEC's 27.5 MBPD. An American presence in Iraq would "deny OPEC and the Saudi leaders the ability to dictate marginal changes in world oil supply. Developing Iraq's vast potential in the medium term can only increase the American leverage over world oil prices," (Stinivasan 2002)

The Bush administration is peopled by individuals with personal and financial connections to the oil industry. Since the 1950s, the Bush family has been openly linked to oil interests; Vice President Dick Cheney was the CEO of one of the world's biggest oil companies, Halliburton; and Condoleezza Rice served on Chevron's Board of Directors and in fact Chevron named one of its tankers after Rice (Cave).

The Bush administration therefore seemed eager to pounce on the Middle East before September 11. For instance, "As soon as it took office in 2001," the Bush administration commissioned a special Task Force on energy, which concluded "that the U.S. is increasingly dependent on imported oil and that it may be necessary to overcome foreign resistance in order to gain access to new supplies," (Scott 2003). A senior analyst for Washington's Center for Strategic and International Studies stated before the invasion, "Regardless of whether we say so publicly, we will go to war, because Saddam sits at the center of a region with more than 60% of all the world's oil reserves," (cited by Scott 2003).

To achieve its strategic goals in the Middle East, the United States has continually coveted conservative regimes sympathetic to American financial interests (Shalom 1993). It is well-known that the United States supplied Saddam Hussein with weapons and intelligence aids during the Iran-Iraq War. A photo of Donald Rumsfeld shaking hands with Saddam Hussein underscores the extent of the administration's involvement with Iraq prior to September 11. When it became clear that Hussein was going to be far from cooperative with the United States and nationalized its oil supplies, the need to invade became immanent.

American dependence on oil and especially on foreign sources of oil skyrocketed after the Second World War. Even before the rise of Detroit and the domestic automotive industry, though, the United States cultivated direct investments in Gulf oil. During the 1920s, the United States and Great Britain vied for access to Middle Eastern oil (Shalom). However, it was not until the 1950s that oil would become the "political weapon" it is today (Shalom). Chief objectives regarding Gulf oil sources remained clear throughout the 20th century: to prevent populist movements in Middle Eastern nations. Nationalizing oil resources would vastly reduce oil profits for multinational energy corporations like British Petroleum. Therefore, when a democratically elected government in Iran did just that, the United States and Great Britain reacted with a fervent trade embargo and an instantaneous regime change not wholly unlike what has occurred recently in Iraq. In Iran during the 1950s, the United States and Great Britain propped up the Shah in a nefarious attempt to maintain global hegemony. Since then, destabilizing the Middle East through the support of military dictatorships has been the modus operandi of multinational oil companies and of the national governments that support them.

Such a strategy seems counterproductive on the surface but really is sensible from the American perspective. A stable socialist government can easily thwart U.S. access to its domestic reserves, driving prices up and down in accordance with its needs. Moreover, a stable and democratically-elected socialist government threatens American political and economic hegemony in a world market dominated by oil. The repercussions of such a scenario would be dramatic, as oil is not only necessary for automotive fuel but for the factories that produce the bulk of the world's commercial goods and the transportation services that deliver those goods worldwide. Legitimate Iraqi control of its own oil would have put a major dent in the American economy and might also have diminished overall U.S. political clout. Saddam Hussein provided the perfect scapegoat for the United States, an ideal impetus for another regional regime change. The Bush administration cared less about Hussein's crimes against humanity as it did the dictator's self-interest in reaping the profits of Iraqi oil. Limiting domestic oil production in Iraq was one way Hussein thumbed his nose at the United States. An administration as oil-dependent as Bush's could not help but want control of Iraq's estimated 112 billion barrels of extractable oil, which was being frustratingly under-produced by the Hussein regime.

The Bush administration is fooling no one at this point. Now that the original justification for invasion, WMDs, has been disparaged there are few who would attempt to show that the invasion of Iraq was due to anything but oil. A survey of Middle East residents revealed that a shocking 80% cited oil as the primary factor for the U.S. invasion of Iraq (Telhami 2003).

Indeed, some analysts claim that the Bush administration's invasion of Iraq was nevertheless conducted in the interests of national security. Stinivasan (2002) notes, "Islamist terrorism is financed and spread by revenue earned from petroleum exports. So the Bush strategy is to control Iraq, break… READ MORE

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