It's the Crude, Dude: Greed, Gas, War, and the American Way

PREFACE

The legendary doyenne of the White House press corps minced no words when she finally got her chance in March 2006 to put a question to the president: Every reason given [for invading Iraq] has turned out not to be true… why did you really want to go to war? asked Helen Thomas. You have said it wasn’t oil… or anything else. What was it?

George W. Bush sidestepped Thomas’s question about his true motive for war, insisting instead that he didn’t really want to go to war.

The little dustup between the president and the feisty octogenarian attracted a brief flurry of media attention. But there was no accompanying media attention to Thomas’s compelling question, which simply went unanswered, as it has for years.

Fresh evidence keeps coming to light about the intensity of the Bush administration’s determination to go to war in Iraq. Yet, oddly, we don’t insist on knowing why.

Any suggestion of a possible oil motive is still routinely dismissed as the terrain of conspiracy theorists.

The refusal to take seriously the possibility of an oil motive is bizarre, given oil’s obvious geopolitical significance and the fact that Iraq is the last easily harvested oil bonanza left on earth.

Here’s the problem the United States faces: it consumes roughly 25 percent of all the oil produced in the world each year, but has only 3 percent of the world’s crude reserves. To make up for the shortfall, the United States relies heavily on oil from outside its borders, leaving it vulnerable if key reserves are under the control of hostile nations. Overcoming this vulnerability has been a central goal of U.S. policymakers, particularly since Arab nations dramatically cut back their oil exports for a brief period in the early 1970s.

With roughly two-thirds of the world’s oil located in the Middle East, a major thrust of U.S. policy has long been gaining control over the region and its reserves.

Thus, for the past sixty years, Washington has provided crucial military backing for the dictatorship in Saudi Arabia, protecting it from external and internal threats, including domestic pressure for democracy. In exchange, Washington (and U.S. oil companies) has enjoyed extraordinary leverage over Saudi oil policy, which effectively amounts to leverage over world oil policy.

Washington’s intervention in Iran has been even more heavy handed. After a popular nationalist leader was elected there in the early 1950s, Tehran nationalized its foreign-owned oil industry. The big British and American oil companies were so incensed that they organized a worldwide boycott of nationalized Iranian oil. When the boycott failed to bring Tehran to its knees, Washington orchestrated a coup in 1953 that toppled the fledgling Iranian democracy and replaced it with a brutal, pro-U.S. dictatorship, led by the shah.

This background is routinely omitted from mainstream public debate, making it harder for the public to see the current U.S. intervention in Iraq as part of a larger historical pattern in the U.S. quest to control Middle Eastern oil. (Also left out of public debate is the role that U.S. interventions have inadvertently played in sparking a deeply anti-American Islamic fundamentalist movement in that part of the world.)

The possibility of an oil motive in the Iraq war is often dismissed on the grounds that it would have been cheaper just to buy the oil. But that cheque-book solution was also available — and rejected by Washington — when Iran nationalized its oil in the 1950s. That’s because the issue for Washington wasn’t access to oil, but control over oil. Without control, there is no guarantee of access. This point was driven home dramatically in 1973, when the Arab countries slashed their oil exports to Washington for purely political purposes. Thus, no cheque-book solution was even available. That embargo left an indelible impression on U.S. strategic planners, who have since been determined to ensure America is never vulnerable like that again.

The U.S. invasion of Iraq may be a precursor of what lies ahead as we enter a far more precarious energy future. The simple truth is that oil is a finite resource — a onetime inheritance that we’ve consumed recklessly for the past hundred years.

One can debate exactly when world oil production will reach its peak and start to decline, but such a crunch is coming, and the implications will be enormous. According to a 2005 report by the U.S. Department of Energy’s National Energy Laboratory: The world has never faced a problem like this. . . . Previous transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary.

One suspects it might also be violent. The geopolitical struggle over oil — a rivalry that marked much of the last century — seems likely to intensify. The United States shows little interest in reducing its enormous consumption even as its domestic reserves are depleted.

Meanwhile China is experiencing explosive growth in its oil demand and is hungrily scouring the world looking for fresh sources of supply. This suggests that the world’s most heavily armed nation and the world’s most populous nation may soon find themselves facing off in a bitter struggle to lock up control of the world’s most valuable resource — just as global production of that resource begins to decline.

And none of this even touches on the most devastating of all problems related to our oil addiction: global warming. So we’re left in a strangely paradoxical situation: there’s not enough oil to meet the world’s growing consumption, but that growing consumption is itself threatening to ruin the world.

There are no quick fixes to the problem. Ultimately, it’s going to involve changing the way we live in some fundamental way. But acknowledging the scope of our addiction would be a good beginning. Continued obfuscation over Iraq isn’t helpful. A little more skepticism about invaders who come in the guise of liberators might help shine some badly needed light on one of the world’s most combustible problems.

CHAPTER 1

FORT KNOX GUARDED BY A CHIHUAHUA

"You give us the money. We give you the truck.

Nobody gets hurt."

–ADVERTISEMENT FOR THE 2003 HUMMER SUV

The Hummer SUV pictured along with this snappy ad copy is a massive fortress-like vehicle—something suitable for, say, taking the whole family for a spin through downtown Baghdad. With the playful, whimsical look of a Brink’s truck, the Hummer practically sings out: Out of my way, motherfucker. There’s no mistaking you’ll feel safe inside. But, of course, the joke in the ad turns on the old bank robbery line: if everybody just co-operates, nobody gets hurt. That’s where the fine line between sassy advertising copy and outright lying is crossed. In fact, huge gas-guzzling SUVs like the Hummer are one of the fastest-growing causes of global warming, with its potentially catastrophic impacts for human life on the planet.

Here then is how the ad should read: "You give us the money. We give you the truck. Everybody gets hurt."

——

If nothing else, Washington’s saber-rattling against Iran in the spring of 2005 should have evoked a sense of déjà vu. The Middle Eastern country was said to be run by very bad men who oppress their own citizens and who are determined to acquire weapons of mass destruction. Even the name of the country is strikingly similar: Iran, so like Iraq. Both roll off the tongue with ease, both are well endowed with the world’s most valuable commodity, and both conjure up frightening images of men who prefer weird Biblical outfits to proper business attire. So it turned out to be an easy transition. Without a blush of awkwardness, media commentators began preparing the public for a new reality: Washington might have to intervene in Iran in order to protect the American people and bring peace to the world.

If so, it wouldn’t be the first time. Washington intervened in Iran back in 1953, after Iran nationalized its oil industry. The U.S. orchestrated a coup that overthrew Iran’s democratically elected government, and installed a pro-U.S. dictatorship. This led to the rise of a fiercely anti-American Islamic fundamentalist movement that eventually took control of Iran and spread throughout the Middle East and beyond.

This background rarely makes its way into the current debate over Iran, nor is consideration given to the possibility that Washington might be motivated in part by a desire to regain control over Iran—along with its considerable oil reserves.

Instead, the media keeps its focus on Washington’s allegations that Iran plans to develop nuclear weapons—just as it kept its focus on Washington’s allegations that Iraq had weapons of mass destruction.

(Ironically, it was Washington that first supplied Iran with nuclear technology back in the days when it was a U.S. ally. And it has been Washington’s unceasing hostility to Iran’s Islamic revolution that has encouraged the country’s Islamic rulers to think of developing a nuclear deterrent. The International Atomic Energy Agency has not, however, found Iran to be in contravention of the Nuclear Non-proliferation Treaty.)

The media learned a bitter lesson when CBS anchor Dan Rather blindly trusted the credibility of a source discrediting President George W. Bush. But as for trusting the Bush administration—which has already gone to war over weapons that didn’t exist—no lesson has apparently been learned.

——

Meanwhile, Washington’s ongoing intervention in Iraq was now said to be on the right track.

With the turn-out of millions of Iraqis in the elections of January 2005, there was a giddiness among Washington war planners not seen since jubilant Iraqis had toppled the statue of Saddam Hussein, with the help of an American tank that happened to be on hand. After almost two years of unrelentingly bad images from the Iraqi war front, here finally were some good-news images to feast on—Iraqis dancing with joy in the streets, celebrating their dramatic experience with a ballot box. For supporters of the U.S. invasion, long pushed onto the defensive, this was indeed a moment to savour, a moment to celebrate how justified the invasion had been all along. This point was made repeatedly. Anyone who had opposed the war was now pretty much exposed as an enemy of democracy, and as an unrepentant Saddam-lover.

To listen to the giddy media commentary, one could easily have concluded that Iraqis had voted to show their support for America. Yet, the one platform common to all parties that took part in the Iraqi election had been the need to end the U.S. occupation. Many of the voters came out to cast their ballots in the belief that it was the only way to regain enough sovereignty to get American troops back out of their country, noted Juan Cole, a professor of Modern Middle Eastern History at the University of Michigan. Some voters may have had simpler motivations; there were reports that proof of voting was necessary for access to food rations. Certainly it was a stretch to interpret the electoral results as encouraging for America. Ibrahim al-Jaafari, who emerged as prime minister after several months of post-election wrangling, was affiliated with the Dawa Party, a fiercely anti-American group believed to be implicated in the 1983 bombing of the U.S. embassy in Kuwait.

Besides, if there was a hero of the emerging Iraqi democratic process, it wasn’t U.S. President George W. Bush, but rather Grand Ayatollah Ali al-Sistani, the moderate, influential Shi’ite leader who had doggedly pushed for elections right from the start, and sent hundreds of thousands of his supporters out onto the streets to back up his demands. Bush, on the other hand, had doggedly resisted elections right from the start, preferring that Iraq be run by a U.S. proconsul, with a new constitution to be drawn up by a few hand-picked exiles. If it had been up to Bush, Iraq would have been a soft dictatorship, according to Cole.

When Washington finally agreed to elections, Sistani, seeing an opportunity for his long-oppressed Shi’ites to gain political clout, issued a fatwa making it a religious duty to vote. So chalk up the big turn-out on election day to enthusiasm for democracy—and loyalty to the ayatollah.

Next time Bush wants to liberate a country, we’ll no doubt be shown post-election footage of Iraqis dancing in the streets, without any acknowledgement that those joyous Iraqis were probably celebrating the first step in pushing foreign occupiers out of their land.

The media’s portrayal of the Iraqi elections as a triumph of democracy was yet another step in the ongoing presentation of U.S. actions in Iraq as a tale of good intentions. Keeping to this narrative has been challenging at times—particularly back in March 2003, when Washington launched its invasion.

The invasion brought to an abrupt end the United Nations weapons inspection that had been proceeding methodically for months. Suddenly, the whole orderly process had to be forcibly shut down so that Washington could begin dropping bombs on Baghdad, a city of five million people—an attack that U.S. Defense secretary Donald Rumsfeld promised would be of a force and scope and scale that is beyond what has been seen before. Without a trace of irony, George W. Bush had explained in a televised address that he was dropping these bombs to make the world more peaceful. (One can only imagine what he might do if he were trying to make the world more violent.) So, instead of nightly footage of Iraq destroying its Al-Samoud missiles under the watchful eye of the UN inspectors, our TV screens were suddenly filled with images of explosions and buildings burning in Baghdad.

But these seemingly hostile actions somehow appeared rather benign on U.S. television, which covered the war in a curiously upbeat manner. Every TV station had its own in-house military experts, equipped with coloured pens to trace troop movements—like weathermen showing an approaching cold front or sportscasters sketching a particularly good play in the backfield. And every station had its own war logo (Target Iraq, Attack on Iraq, Strike against Iraq.) A more appropriate logo for CNN would have been: The Joy of War or Kicking Ass. With a CNN reporter describing an American tank rushing towards Baghdad as the most lethal killing machine on earth, anchor Aaron Brown could hardly conceal his excitement. Are you dazzled by what you see? he asked, turning to CNN in-house general (and later Democratic presidential candidate) Wesley Clark. Together the two men marvelled at the American killing machines speeding across the sand.

As a massive phalanx of U.S. troops moved into Iraq, Rumsfeld publicly warned Iraqis that setting oil fields on fire would be punished as a war crime. Clearly, it’s one thing to drop mega-bombs on a densely populated city, quite another to do something really evil—like destroy a perfectly good oil well.

Rumsfeld’s comment might have been seen as a clue that oil was a key concern of those who had ordered the invasion. But such a notion was vehemently denied, including by Rumsfeld himself, who declared: An Iraq war has absolutely nothing to do with oil. The denial was also, curiously, insisted upon by most commentators in the mainstream media, who were quick to roll their eyes at the very suggestion.

The media barely mentioned the fact that Iraq was bountifully endowed with oil, ranking second only to Saudi Arabia in terms of the sheer size of its reserves. But, unlike Saudi Arabia, Iraq’s oil is largely untouched. This makes it uniquely tantalizing to the major international oil companies, which in recent years have been desperately searching for new reserves to develop. There’s no question all these companies are licking their chops waiting for an opportunity to jump in, notes Fadel Gheit, senior oil analyst at the Wall Street firm Oppenheimer & Co. As Washington prepared for war, there was almost none of this sort of commentary in the mainstream media.

Indeed, as the Iraq saga unfolded in the months that followed—moving seamlessly from a tale of the disarming of a dangerous dictator to a battle to bring democracy to the Middle East—oil remained strangely offstage, hidden in plain sight.

——

The future of Hugo Chavez, president of oil-rich Venezuela, started to look significantly more precarious in January 2005. It was then that announcers on CNN began referring to Chavez as a Latin American strongman.

CNN announcers wield no actual power. But they are a barometer of accepted political wisdom in Washington, of which notions can be stated as fact without causing controversy. Calling Chavez a strongman is a case in point. In the popular parlance, the word suggests a dictator, someone who maintains power through force, not through the ballot box. So when CNN announcer Kitty Pilgrim referred to Chavez as a Latin American strongman, she was positioning him in a long line of repressive South American dictators. This is a significant distortion. In fact, Chavez’s democratic credentials are impressive; he’s won two nationwide Venezuelan elections, and in the summer of 2004 he handily won a national referendum on his leadership—a referendum that was given the stamp of approval by the Carter Center, the human rights organization established by former U.S. president Jimmy Carter.

But the strongman label went unchallenged. To millions of CNN viewers he was presented as simply a dictator, a mini-Saddam. And as such, he is unlikely to be missed by those viewers if they learn at some point he’s been overthrown—a fate that Chavez is convinced the Bush administration has in mind for him. This isn’t such a far-fetched notion. Chavez was briefly overthrown in a coup in April 2002, and Washington was at least supportive of the coup leaders, if not actively involved. And if the Bush administration had been interested in ridding themselves of Chavez back in 2002, it is even keener to see him ousted now. Chavez has long offended Washington with his close relations with Cuba, his open defiance of American hegemony in Latin America and his redirecting of Venezuelan oil revenues from American oil companies to Venezuelan social programs. But in December 2004, the flamboyant Venezuelan leader really stepped over the line: he made some far-reaching deals with China to develop Venezuela’s considerable oil reserves.

Oil is the lifeblood of the global economy. Certainly any country wanting to maintain its superpower status must be assured of access to oil—the fuel that for the past century (and for the foreseeable future) has been indispensable for both economic growth and military power, as well as essential to support the self-indulgent western lifestyle. So oil is clearly vital to the United States. But there’s a problem: while America is the biggest consumer of oil in the world, it has relatively little oil of its own, and what it has is rapidly dwindling.

While Americans consume roughly 25 percent of all the oil produced in the world each year, the U.S. has only 3 percent of the world’s oil reserves. There’s an enormous gap, then, between what Americans use (and what their government intends for them to keep on using), and what they need (or are determined to have). This leaves the U.S. highly dependent on foreign oil imports—a dependency which grows with each passing year. The U.S. now imports more than half its oil; by 2020, it is expected to import more than 65 percent. This makes America vulnerable, in danger of running short of the commodity it most needs to remain the world’s dominant superpower. And vulnerability is not something Washington accepts lightly.

In America’s quest for global dominance, no power looms more ominously on the horizon than China, with its tumultuous economic growth and massive scale. That growth is made possible by China’s voracious and ever-rising consumption of energy. In the last few years, China has accounted for roughly 40 percent of the growth in global oil demand; it now ranks second in the world in oil consumption, after the U.S. And, like the U.S., China is highly dependent on foreign oil. With the oil consumption of these two superpowers continuing to grow rapidly, an increasingly fierce competition is shaping up between them over the world’s most valuable resource. And then there’s India— another country with an enormous population and an exploding appetite for energy.

Only one thing needs to be added to fill out this thumbnail sketch of the coming struggle over oil: the world is much closer to running out of oil than most government or industry officials are willing to admit—a subject we’ll return to shortly. The earth’s dwindling reserves will inevitably make the competition to gain control of the world’s oil all the fiercer. As Edmonton-based energy economist Mark Anielski bluntly puts it: "There’s not enough oil to feed two