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t r u t h o u t Editorial: Oil-Control Formula, by Robert Dreyfuss

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Oil-Control Formula
By Robert Dreyfuss
TomPaine.com

Monday 18 July 2005

George W. Bush's war in Iraq may not be going as planned. But for those who've stopped believing the myth that prewar Iraq represented any sort of threat to the United States, there is plenty of circumstantial evidence mounting that the real reason for the American invasion of Iraq was the most obvious one: Oil. In this case, "oil" doesn't mean that we went to war for the commercial benefit of U.S. oil companies-and in fact, as I reported in Mother Jones magazine in early 2003, before the war, most U.S. oil firms and their executives were against the war. But in Iraq, "oil" means the strategic commodity that is the single most important world resource. Even a novice geostrategist knows that who controls oil controls the world. And in this case, America's rival for control of oil is, first and foremost, China.

Last week, China, Russia and four Central Asian "Stans," including Uzbekistan, rather impolitely asked the United States to withdraw from Central Asia. That part of the world is a significant oil and gas region, and neither Moscow nor Beijing want the United States to put down roots there. But Central Asia's oil and gas resources pale next to the Middle East, and that is where America's imperial presence has set off alarms in Beijing.

Consider oil the Occam's Razor explanation of the war in Iraq.

A June 24 New York Times article subtly attacked China and its CNOOC oil firm over its bid to buy Unocal, a U.S. oil company with long experience in Asia, calling the intended purchase (in its page-one headline) a "costly quest for energy control." But if any nation "controls" energy, it is the United States. Buried in the article was this fairly explosive paragraph:

Privately, Chinese officials and analysts say oil is treated as a strategic crisis. They have sounded the alarm about Western and particularly American domination of oil supplies and influence over major oil-exporting nations, including Saudi Arabia and now Iraq, which has made China dependent on what many here refer to as American economic and military hegemony.

Together, Saudi Arabia and Iraq control roughly half of the world's oil deposits, a share that is likely to rise as oil countries deplete their reserves. Saudi Arabia has long been in America's back pocket, and now Iraq- though not going well for the United States-is occupied by the American army and its quisling government is comprised of American puppets. It isn't shocking for the Chinese to have a legitimate beef here. Consider the following from the July 13 Washington Post . The headline read: "Big Shift in China's Oil Policy" and the subhead, more revealing, was "With Iraq Deal Dissolved by War, Beijiing Looks Elsewhere." It began:

Until recently, China's view of the global energy map focused narrowly on the Middle East, which holds roughly two-thirds of the world's oil. Special attention was directed toward one well-supplied country: Iraq.

Through cultivation of Saddam Hussein's government, China sought to develop some of Iraq's more promising reserves. Beijing advocated lifting the United Nations sanctions that prevented investment in Iraq's oil patch and limited sales of its production.

Then the United States went to war in Iraq in 2003, wiping out China's stakes. The war and its aftermath have reshaped China's basic conception of the geopolitics of oil and added urgency to its mission to lessen dependence on Middle East supplies. It has reinforced China's fears that it is locked in a zero-sum contest for energy with the world's lone superpower, prompting Beijing to intensify its search for new sources, international relations and energy experts say.

So. We went to war in Iraq, "wiping out China's stakes" in Iraq. And so, Chinese "officials and analysts" call the current situation an oil crisis, says the Times.

Meanwhile, neoconservatives, Bush administration officials, some members of Congress and (unfortunately) a few labor-connected liberals are making a big deal of CNOOC's Unocal bid. For perspective, let's recall that Unocal is the company that did more to support the Taliban than any other U.S. entity, courting those Islamic radicals in search of a pipeline, oil and gas deal in central Asia-and hiring various malleable U.S. strategists to support the Taliban on its behalf, including incoming U.S. ambassador to Iraq, Zalmay Khalilzad. It's hard to imagine anything that China could do with Unocal that would do more damage to U.S. interests than Unocal has already done. Still, the outcry goes on, most recently during a congressional hearing at which Jim Woolsey, the former CIA director, and Frank Gaffney, the neocon-linked military strategist, railed against China. (CNOOC, by the way, is partly owned by Shell Oil, which bought a big chunk of the mostly state-owned firm when it conducted a public stock offering in 2002.)

According to the U.S. Energy Information Administration, road transportation in China will be the driving force for that country's enormous oil appetite in the next two decades, noting that "the Chinese passenger car market grew tenfold between 1990 and 2000." By 2025, says EIA, China's oil demand will reach nearly 13 million barrels of oil per day. (Saudi Arabia's entire output is only about 8 million barrels a day.) To meet such demand, China is searching everywhere, from Sudan to Venezuela to Central Asia. Iran and China are making oil deals, too. But by invading and occupying Iraq, the United States has pretty much locked up the most easily expanded source of oil in the world; Iraq, which manages to eke out about 2 million barrels a day, can produce six to eight times that much oil if it made sufficient investments in production facilities. Quite a prize, Iraq-if Washington can hold onto it. No wonder various neoconservative world hegemonists consider talk of an Iraq exit strategy to be treasonous.

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Robert Dreyfuss is a freelance writer based in Alexandria, Va., who specializes in politics and national security issues. He is a contributing editor at The Nation, a contributing writer at Mother Jones, a senior correspondent for The American Prospect, and a frequent contributor to Rolling Stone. His book, Devil's Game: How the United States Helped Unleash Fundamentalist Islam, will be published by Henry Holt/Metropolitan Books in the fall.

posted by Annamarie at 3:22 PM