Oil, War And
Sense Of Panic In The US
By Robert Fisk
02 October 2003
is slippery stuff but not as slippery as the figures now being peddled
by Iraq's American occupiers. Up around Kirkuk, the authorities are
keeping the sabotage figures secret - because they can't stop their
pipelines to Turkey blowing up. And down in Baghdad, where the men who
produce Iraq's oil production figures are beginning to look like the
occupants of Plato's cave - drawing conclusions from shadows on their
wall - the statistics are being cooked. Paul Bremer, the US proconsul
who wears combat boots, is "sexing up" the figures to a point
where even the oilmen are shaking their heads.
Take Kirkuk. Only
when the television cameras capture a blown pipe, flames billowing,
do the occupation powers report sabotage. This they did, for example,
on 18 August. But the same Turkish pipeline has been hit before and
since. It was blown on 17 September and four times the following day.
US patrols and helicopters move along the pipeline but, in the huge
ravines and tribal areas through which it passes, long sections are
in Baghdad realise now that Iraqi officials in the oil ministry - one
of only two government institutions that the Americans defended from
the looters - knew very well that the sabotage was going to occur. "They
told me in June that there would be no oil exports from the north,"
one of them said to me this week. "They knew it was going to be
sabotaged - and it had obviously been planned long before the invasion
Early in their occupation,
the Americans took the quiet - and unwise - decision to re-hire many
Baathist oil technocrats, which means that a large proportion of ministry
officials are still ambivalent towards the Americans. The only oil revenues
the US can get are from the south. In the middle of August, Mr Bremer
gave the impression that production stood at about 1.5 million barrels
a day. But the real figure at that time was 780,000 barrels and rarely
does production reach a million. In the words of an oil analyst visiting
Iraq, this is "an inexcusable catastrophe".
When the US attacked
Iraq in March, the country was producing 2.7 million barrels a day.
It transpires that in the very first hours after they entered Baghdad
on 9 April, American troops allowed looters into the oil ministry. By
the time senior officers arrived to order them out, they had destroyed
billions of dollars of irreplaceable seismic and drilling data.
While the major
oil companies in the US stand to cream off billions of dollars if oil
production resumes in earnest, many of their executives were demanding
to know from the Bush administration - long before the war - how it
intended to prevent sabotage. In fact, Saddam had no plans to destroy
the oil fields themselves, plenty for blowing up the export pipes. The
Pentagon got it the wrong way round, racing its troops to protect the
fields but ignoring the vulnerable pipelines.
Anarchy is now so
widespread in post-war Iraq that it is almost impossible for international
investors to work there. There is no insurance for them - which is why
Mr Bremer's occupation administrators have secretly decided that well
over half the $20bn (£12bn) earmarked for Iraq will go towards
security for its production infrastructure.
During the war,
a detailed analysis by Yahya Sadowski, a professor at the American University
of Beirut, suggested that repairing wells and pipes would cost $1bn,
that raising oil production to 3.5 million barrels a day would take
three years and cost another $8bn investment and another $20bn for repairs
to the electrical grid which powers the pumps and refineries. Bringing
production up to six million barrels a day would cost a further $30bn,
some say up $100bn.
In other words -
assuming only $8bn of the $20bn can be used on industry - the Bush overall
budget of $87bn which now horrifies Congress is likely to rise towards
a figure of $200bn. Ouch.
Since the 1920s,
only about 2,300 wells have been drilled in Iraq and those are in the
valleys of the Tigris and Euphrates. Its deserts are almost totally
unexplored. Officially, Iraq contains 12 per cent of the world's oil
reserves - two-thirds of the world's reserves are in just four other
countries, Saudi Arabia, Iran, Kuwait and the Emirates - but it could
contain 20 per cent, even 25 per cent.
It's possible to
argue that it was Saddam's decision to switch from the dollar to the
euro in November 2000 that made "regime change" so important
to the US. When Iran threatened to do the same, it was added to the
"axis of evil". The defence of the dollar is almost as important
But the real irony
lies in the nature of America's new power in Iraq. US oil deposits are
increasingly depleted and by 2025, its oil imports will account for
perhaps 70 per cent of total domestic demand. It needs to control the
world's reserves - and don't tell me the US would have invaded Iraq
if its chief export was beetroot - and it now has control of perhaps
25 per cent of world reserves.
But it can't make
the oil flow. The cost of making it flow could produce an economic crisis
in the US. And it is this - rather than the daily killing of young American
soldiers - that lies behind the Bush administration's growing panic.
Washington has got its hands on the biggest treasure chest in the world
- but it can't open the lid. No wonder they are cooking the books in