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Politics of Oil in International Communication:

Understanding the root cause of Conflict

Submitted by
Labhita Sashoni
MCM08023
Introduction:

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Strategic importance of oil

Oil exerts tremendous economic and political influence worldwide, although the line
between political and economic influence is not always distinct. The importance of oil
to national security is unlike that of any other commodity:

"Modern warfare particularly depends on oil, because virtually all weapons


systems rely on oil-based fuel – tanks, trucks, armoured vehicles, self-
propelled artillery pieces, airplanes, and naval ships. For this reason, the
governments and general staffs of powerful nations seek to ensure a steady
supply of oil during wartime, to fuel oil-hungry military forces in far-flung
operational theaters. Such governments view their companies’ global interests
as synonymous with the national interest and they readily support their
companies’ efforts to control new production sources, to overwhelm foreign
rivals, and to gain the most favorable pipeline routes and other transportation
and distribution channels.

Why is fuel so important?

Everybody is concerned about the cost of oil. The terms “premium unleaded,” “light
sweet crude” are tossed around constantly. But have we ever stopped to think about
why improving our fuel economy might be so important? There are some obvious
answers, and some not quite so apparent.

The one reason everyone seems to want to improve their fuel efficiency is to save
money. There are a variety of ways we can change our driving habits to save cash,
including keeping up on maintenance, maintaining a cruising speed and idling less.

Improving our fuel economy can also protect the environment. The obvious issue here
is global warming. It’s no longer simple conjecture as to whether mankind is warming
the planet- it’s a fact. Using less gasoline leads to less CO2 emissions, meaning less
heat trapped by our atmosphere. Air pollution is an equally important issue

National security is affected by oil consumption as well. More than half the oil
Americans use every day comes from foreign states. Because we are dependent on
trade with these sometimes volatile countries, many times our politicians are unable to

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conduct diplomatic or military missions in our nation’s best security interests.
Additionally, we are putting almost 400 billion dollars into foreign countries as a
direct result of importing their oil. Many of these countries are covertly hostile
towards the U.S. and are free to use our money however they wish. The 7 billion
dollars a week we give foreign countries in exchange for oil is money that could stay
inside the U.S. if we were more fuel efficient.

A final reason to save gas is perhaps the most compelling. Simply put, there is not an
unlimited amount of oil. While estimates range quite widely, all experts agree that the
Earth will one day run out of oil completely. Until alternative fuels are developed and
implemented to a large degree, it is very important that we conserve our oil resources.
Nothing short of complete chaos and anarchy would result from a depletion of oil
reserves.

OPEC:

The OPEC member countries map shows a World Map, where all the member
countries of OPEC have been highlighted. OPEC stands for the Organization of the
Petroleum Exporting Countries. The mission of OPEC is to coordinate and unify
petroleum policies of Member Countries. OPEC is made up of eleven developing
countries - Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia,
the United Arab Emirates and Venezuela. These countries rely on oil revenues as their
main source of income. All these countries export oil substantially.

The organization aims at coordinating and unifying petroleum policies of its member
countries. OPEC also aims at stabilizing prices in the international oil markets. It
wants to secure a steady income to the producing countries. OPEC has not succeeded
always in putting a stabilizing influence on the market. Oil revenues are vital for the
economic development of these nations.

The Representatives of OPEC Member Countries (Heads of Delegation) get together


at the OPEC Conference to co-ordinate and unify petroleum policies. Their aim is to
promote stability and harmony in the oil market. About 40 per cent of the world's oil

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output comes from the OPEC member countries. They possess more than three-
quarters of the world's total proven crude oil reserves.

The National Security Strategy of the United States of America

The great struggles of the twentieth century between liberty and totalitarianism ended
with a decisive victory for the forces of freedom—and a single sustainable model for
national success: freedom, democracy, and free enterprise. In the twenty-first century,
only nations that share a commitment to protecting basic human rights and
guaranteeing political and economic freedom will be able to unleash the potential of
their people and assure their future prosperity. People everywhere want to be able to
speak freely; choose who will govern them; worship as they please; educate their
children—male and female; own property; and enjoy the benefits of their labor. These
values of freedom are right and true for every person, in every society—and the duty
of protecting these values against their enemies is the common calling of freedom-
loving people across the globe and across the ages.

Today, the United States enjoys a position of unparalleled military strength and great
economic and political influence.In an address to the public President Bush in the year
2002 said: We seek instead to create a balance of power that favors human freedom:
conditions in which all nations and all societies can choose for themselves the rewards
and challenges of political and economic liberty. In a world that is safe, people will be
able to make their own lives better.We will defend the peace by fighting terrorists and
tyrants.We will preserve the peace by building good relations among the great
powers. We will extend the peace by encouraging free and open societies on every
continent.

Defending our Nation against its enemies is the first and fundamental commitment of
the Federal Government. Today, that task has changed dramatically. Enemies in the
past needed great armies and great industrial capabilities to endanger America. Now,
shadowy networks of individuals can bring great chaos and suffering to our shores for
less than it costs to purchase a single tank. Terrorists are organized to penetrate open
societies and to turn the power of modern technologies against us.

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To defeat this threat we must make use of every tool in our arsenal—military power,
better homeland defenses, law enforcement, intelligence, and vigorous efforts to cut
off terrorist financing. The war against terrorists of global reach is a global enterprise
of uncertain duration. America will help nations that need our assistance in combating
terror. And America will hold to account nations that are compromised by terror,
including those who harbor terrorists— because the allies of terror are the enemies of
civilization. The United States and countries cooperating with us must not allow the
terrorists to develop new home bases. Together, we will seek to deny them sanctuary
at every turn.

The United States will build on these common interests to promote global security.We
are also increasingly united by common values. Russia is in the midst of a hopeful
transition, reaching for its democratic future and a partner in the war on terror.
Chinese leaders are discovering that economic freedom is the only source of national
wealth.

Finally, the United States will use this moment of opportunity to extend the benefits
of freedom across the globe.We will actively work to bring the hope of democracy,
development, free markets, and free trade to every corner of the world. The events of
September 11, 2001, taught us that weak states, like Afghanistan, can pose as great a
danger to our national interests as strong states. Poverty does not make poor people
into terrorists and murderers. Yet poverty, weak institutions, and corruption can make
weak states vulnerable to terrorist networks and drug cartels within their borders.

The United States will stand beside any nation determined to build a better future by
seeking the rewards of liberty for its people. Free trade and free markets have proven
their ability to lift whole societies out of poverty—so the United States will work with
individual nations, entire regions, and the entire global trading community to build a
world that trades in freedom and therefore grows in prosperity. The United States will
deliver greater development assistance through the New Millennium Challenge
Account to nations that govern justly, invest in their people, and encourage economic
freedom.We will also continue to lead the world in efforts to reduce the terrible toll of
HIV/AIDS and other infectious diseases.

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In building a balance of power that favors freedom, the United States is guided by the
conviction that all nations have important responsibilities. Nations that enjoy freedom
must actively fight terror. Nations that depend on international stability must help
prevent the spread of weapons of mass destruction. Nations that seek international aid
must govern themselves wisely, so that aid is well spent. For freedom to thrive,
accountability must be expected and required.

Cold War

The German Bundeswehr provided the largest element of the allied land forces
guarding the frontier in Central Europe; 12 of 26 divisions in 1985.

The outbreak of the Korean War in 1950 was crucial for NATO as it raised the
apparent threat level greatly (all Communist countries were suspected of working
together) and forced the alliance to develop concrete military plans.The 1952 Lisbon
conference, seeking to provide the forces necessary for NATO's Long-Term Defence
Plan, called for an expansion to 96 divisions. However this requirement was dropped
the following year to roughly 35 divisions with heavier use to be made of nuclear
weapons. At this time, NATO could call on about 15 ready divisions in Central
Europe, and another ten in Italy and Scandinavia.Also at Lisbon, the post of Secretary
General of NATO as the organization's chief civilian was also created, and
Baron Hastings Ismay eventually appointed to the post.[10] Later, in September 1952,
the first major NATO maritime exercises began; Operation Mainbrace brought
together 200 ships and over 50,000 personnel to practice the defence of Denmark and
Norway.

Greece and Turkey joined the alliance the same year, forcing a series of controversial
negotiations, in which the United States and Britain were the primary disputants, over
how to bring the two countries into the military command structure.[11] Meanwhile,
while this overt military preparation was going on, covert stay-behind arrangements to
continue resistance after a successful Soviet invasion ('Operation Gladio'), initially
made by the Western European Union, were being transferred to NATO control.
Ultimately unofficial bonds began to grow between NATO's armed forces, such as
the NATO Tiger Association and competitions such as the Canadian Army
Trophy for tank gunnery.

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In 1954, the Soviet Union suggested that it should join NATO to preserve peace in
Europe. The NATO countries, fearing that the Soviet Union's motive was to weaken
the alliance, ultimately rejected this proposal. The incorporation of West Germany
into the organization on 9 May 1955 was described as "a decisive turning point in the
history of our continent" byHalvard Lange, Foreign Minister of Norway at the time.
[13]
A major reason for Germany's entry into the alliance was that without German
manpower, it would have been impossible to field enough conventional forces to
resist a Soviet invasion.[14] Indeed, one of its immediate results was the creation of
the Warsaw Pact, signed on 14 May 1955 by the Soviet Union, Hungary,
Czechoslovakia, Poland, Bulgaria, Romania, Albania, and East Germany, as a formal
response to this event, thereby delineating the two opposing sides of the Cold War.

Gulf war:

The Persian Gulf War (2 August 1990 – 28 February 1991), commonly referred to
as the Gulf War, also known as the First Gulf War (not to be confused with
the Iran–Iraq War) or the Second Gulf War, and by Iraqi leader Saddam
Hussein asThe Mother of all Battles, and commonly as Desert Storm for the
military response, was the final conflict, which was initiated with United
Nations authorization, by a coalition force from 34 nations against Iraq, with the
expressed purpose of expelling Iraqi forces from Kuwait after its invasion and
annexation on 2 August 1990.

The invasion of Kuwait by Iraqi troops that began 2 August 1990 was met with
international condemnation, and brought immediate economic sanctions against Iraq
by members of the UN Security Council. U.S. President George H. W. Bush deployed
American forces to Saudi Arabia and urged other countries to send their own forces to
the scene. An array of nations joined the Coalition of the Gulf War. The great
majority of the military forces in the coalition were from the United States, with Saudi
Arabia, the United Kingdom and Egypt as leading contributors, in that order. Around
US$40 billion of the US$60 billion cost was paid by Saudi Arabia.

The initial conflict to expel Iraqi troops from Kuwait began with an aerial
bombardment on 17 January 1991. This was followed by a ground assault on 23
February. This was a decisive victory for the coalition forces, who liberated Kuwait
and advanced into Iraqi territory. The coalition ceased their advance, and declared a

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cease-fire 100 hours after the ground campaign started. Aerial and ground combat was
confined to Iraq, Kuwait, and areas on the border of Saudi Arabia. However, Iraq
launched missiles against coalition military targets in Saudi Arabia.

Iraq has the world's second largest proven oil reserves. According to oil industry
experts, new exploration will probably raise Iraq's reserves to 200+ billion barrels of
high-grade crude, extraordinarily cheap to produce. The four giant firms located in the
US and the UK have been keen to get back into Iraq, from which they were excluded
with the nationalization of 1972. During the final years of the Saddam era, they
envied companies from France, Russia, China, and elsewhere, who had obtained
major contracts. But UN sanctions (kept in place by the US and the UK) kept those
contracts inoperable. Since the invasion and occupation of Iraq in 2003, much has
changed. In the new setting, with Washington running the show, "friendly" companies
expect to gain most of the lucrative oil deals that will be worth hundreds of billions of
dollars in profits in the coming decades. The Iraqi constitution of 2005, greatly
influenced by US advisors, contains language that guarantees a major role for foreign
companies. Negotiators hope soon to complete deals on Production Sharing
Agreements that will give the companies control over dozens of fields, including the
fabled super-giant Majnoon. But first the Parliament must pass a new oil sector
investment law allowing foreign companies to assume a major role in the country.
The US has threatened to withhold funding as well as financial and military support if
the law does not soon pass. Although the Iraqi cabinet endorsed the draft law in July
2007, Parliament has balked at the legislation. Most Iraqis favor continued control by
a national company and the powerful oil workers union strongly opposes de-
nationalization. Iraq's political future is very much in flux, but oil remains the central
feature of the political landscape.

Oil in Iraq

Analysis
Disputes leading up to Iraq's oil nationalization in 1972.

Status of Forces Agreement (August 9, 2008)

Noam Chomsky(is a widely known intellectual, political activist, and critic of the
foreign policy of the United States and other governments) argues that since World

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War II, the US has wanted to control Iraq's huge oil resources, which prompted the
US to invade Iraq in 2003. As the world's oil resources are diminishing, the US seeks
control over Iraq's oil to secure its global power and influence.

The big US and UK companies have enormous interest in Iraq's giant untapped
oilfields. It shows clearly how the companies have been angling to gain control of
those fields and now, under the occupation, they are closing in on their goal.
Production Sharing Agreements, the companies' favorite legal ploy, have already been
negotiated with pliant Iraqi officials. Likely to be rushed-through after the December
2005 elections, these contracts may lock Iraq into decades-long arrangements that
siphon as much as $200 billion from the Iraqi government into company coffers.
(Platform, Global Policy Forum and others)

Persian Gulf

The U.S. currently produces about 40% of the oil that it consumes; its imports have
exceeded domestic production since the early 1990s. Since the U.S.'s oil
consumption continues to rise, and its oil production continues to fall, this ratio may
continue to decline. President George W. Bush has identified dependence on imported
oil as an urgent "national security concern".

Two-thirds of the world's proven oil reserves are estimated to be found in the Persian
Gulf. Despite its distance, the Persian Gulf region was first proclaimed to be of
national interest to the United States during World War II. Petroleum is of central
importance to modern armies, and the United States—as the world's leading oil
producer at that time—supplied most of the oil for the Allied armies. Many U.S.
strategists were concerned that the war would dangerously reduce the U.S. oil supply,
and so they sought to establish good relations with Saudi Arabia, a kingdom with
large oil reserves.

The Persian Gulf region continued to be regarded as an area of vital importance to the
United States during the Cold War. The United States would use military force if
necessary to defend its "national interests" in the Persian Gulf region. Carter's
successor, President Ronald Reagan, extended the policy in October 1981 with what
is sometimes called the"Reagan Corollary to the Carter Doctrine", which proclaimed

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that the United States would intervene to protect Saudi Arabia, whose security was
threatened after the outbreak of the Iran–Iraq War.

U.S. President George W. Bush and Indian Prime Minister Manmohan Singh during a
meeting with Indian and American business leaders in New Delhi to discuss bilateral
trade.

Media may be biased against the U.S. regarding reporting human rights violations.
Studies have found that New York Times coverage of worldwide human rights
violations predominantly focuses on the human rights violations in nations where
there is clear U.S. involvement, while having relatively little coverage of the human
rights violations in other nations. For example, the bloodiest war in recent time,
involving eight nations and killing millions of civilians, was the Second Congo War,
which was almost completely ignored by the media. Finally, those nations with
military alliances with the U.S. can spend less on the military and have a less active
foreign policy since they can count on U.S. protection. This may give a false
impression that the U.S. is less peaceful than those nations.

Niall Ferguson argues that the U.S. is incorrectly blamed for all the human rights
violations in nations they have supported. He writes that it is generally agreed that
Guatemala was the worst of the US-backed regimes during the Cold War. However,
the U.S. cannot credibly be blamed for all the 200,000 deaths during the
long Guatemalan Civil War.

Petroleum politics

Iran

Discovery of oil in 1908 at Masjed Soleiman in Iran initiated the quest for oil in the
Middle East. The Anglo-Iranian Oil Company (AIOC) was founded in 1909. In 1951,
Iran nationalized its oil fields initiating the Abadan Crisis. The United States of
America and Great Britain thus punished Iran by overthrowing against its
democratically elected prime minister, Mosaddeq, and brought the former Shah's son,

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a dictator, to power. In 1953 the US and GB arranged the arrest of the Prime Minister
Mosaddeq. Iran exports oil to China and Russia.

Iraq

Iraq holds the world's second-largest proven oil reserves, with increasing exploration
expected to enlarge them beyond 200 billion barrels of "high-grade crude,
extraordinarily cheap to produce." Organizations such as the Global Policy
Forum (GPF) have asserted that Iraq's oil is "the central feature of the political
landscape" there, and that as a result of the2003 invasion,"'friendly' companies expect
to gain most of the lucrative oil deals that will be worth hundreds of billions of dollars
in profits in the coming decades."

Saudi Arabia

Saudi Arabia is an oil-based economy with strong government controls over major
economic activities. It possesses both the world's largest known oil reserves, which
are 25% of the world's proven reserves, and produces the largest amount of the
world's oil. As of 2005, Ghawar field accounts for about half of Saudi Arabia's total
oil production capacity.

Saudi Arabia ranks as the largest exporter of petroleum, and plays a leading role in
OPEC, its decisions to raise or cut production almost immediately impact world oil
prices. It is perhaps the best example of a contemporary energy superpower, in terms
of having power and influence on the global stage (due to its energy reserves and
production of not just oil, but natural gas as well). Saudi Arabia is often referred to as
the world's only "oil superpower".

Many observers contend that political events in general and the turmoil in the Middle
East in particular influence the returns on investments in the oil price. We start from
the liberal belief that war disturbs economic interactions and examine whether it
makes any difference for oil pricing if an oil producing country is involved in a
conflict or not and the second Gulf War. While cooperative events generally decrease

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the oil price, conflictive events only increase it if the political violence affects an oil
producing country. In the event that political violence erupts elsewhere, the price
decreases.

Rising Powers, Shrinking Planet – Global Fight for Oil

New America Media, Posted: Apr 29, 2008

Oil has far surpassed $100 a barrel. The oil production in Iraq, once meant to pay for
the war, is far from doing that. Meanwhile, China and India's rise has come with
booming energy needs.

In 1980, China consumed 1.7 million barrels of oil a day. By 2006, that was up to 7.4
million barrels. Recently, Russian energy giant Gazprom turned off the natural gas to
consumers in Ukraine after its government balked at price increases. Is that the future
we can look forward to in a world of shrinking resources?

During the Cold War the world order was fairly well defined. There's a new
international energy order. Who are the players in this version of the great game?

In the Cold War era, the two main poles of power were the Western block, with the
United States as the dominant power and the Soviet block. In this new world order, it
is believed it's bifurcated between energy surplus countries -- countries which have
enough energy to supply their own needs and to export energy to others -- and energy
deficit states, countries like the United States, China, Japan and European countries
which don't have enough energy to meet their needs and are dependent on imports
from other countries and therefore are beholden to them in various ways,
economically and increasingly politically.

What about the group of countries who are neither militarily powerful like the
United States is, and also deficit in energy? Do they just fall off the order?

Those countries are at the bottom of the barrel, literally speaking and if they're poor
developing countries like in Africa and Latin America, they're going to suffer terribly,

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because among other things, agriculture is an oil dependent activity and the price of
agricultural products has risen enormously and as a result, food prices have risen and
we've seen terrible consequences of this, with rising food prices, food riots and people
facing starvation. This is a product, as much as other things, of the rising price of
energy.

Some examples of how the energy consumers like the United States are wooing
the energy producers?

Many of these countries in the developing world are themselves facing internal unrest
or separatist movements. Nigeria is a good example of this. The government in Abuja,
the capital, is the recipient of all the oil wealth, but the majority of its own citizens do
not see the benefit of the oil wealth. They live in absolute poverty and often suffer the
environmental consequences of oil production, and they're rising up in revolt -
especially in the Niger Delta region in the south where the oil comes from. What they
want from the United States or other suitors like China is weapons in return for oil. So
we are pouring weapons in. The United States is becoming involved indirectly in a
counter-insurgency war in the Niger Delta region. Similarly, China is deeply involved
in Sudan's counterinsurgency in Darfur and in the southern Sudan region where there
is another civil war on the way.

China's net energy use has jumped up to 16 percent of the world's total and it might
hit as much as 21 percent by 2030, if it goes on at this rate. Right now, where is China
getting most of its needs met from?

Most of China's total energy supply comes from domestic coal production. This is a
huge problem because of the environmental consequences of that. But insofar as its
petroleum, most of China's petroleum comes from the Middle East and Africa and in
the future, from Central Asia. Because the United States also relies on those same
sources of supply that means that the United States and China will be increasingly
butting heads against each other for access to the same sources of supply. We're both
relying on military means, so the United States and China are competing militarily as
well as economically, for those same sources of supply.

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China's approach and the United States' approach is reasonably similar. The one
difference is that we recognize a category of states that we call rogue states. This is a
manufactured category; it's not a legal term, but American companies can’t deal with
Iran for example, or Sudan, or Syria. China doesn't have that problem, so China has
been benefiting from our boycott of those countries and is the major producer in
Sudan; it’s signed a lot of energy deals with Iran. That's one way they take advantage
of our rejection of the so-called rogue states.

So, it also seeks to control the area. All three countries are using military means, so
you have three great powers contending for influence, all three are supplying
weapons, two of them -- the United States and Russia -- have military bases in this
area. Three of them are involved in military aid, military training, military exercises
and on top of that it's inherently unstable; there are ethnic conflicts. So this is the kind
of situation -- if you could picture the Balkans before World War I, it's exactly the
same kind of scenario -- where a local conflict, an ethnic conflict could explode and
bring the great powers into it overnight, without anybody anticipating this, but
provoke a great power conflict.

India's Pipeline Deal with Iran

Iranian President Mahmoud Ahmadinejad shakes hands with Indian Foreign Minister
Pranab Mukherjee during a meeting on February 7, 2007 to discuss a gas pipeline
from oil- and gas-rich Iran to energy-starved India.

MUMBAI, August 20, 2008 – Senior researcher and lecturer Marie Lall said that
India’s foreign policy priorities have shifted because of the increasing need for energy
resources to fuel its growth. While speaking at the British Council in Mumbai, Dr.
Lall talked about this issue in the context of the Iran-Pakistan-India pipeline, the US-
Indo nuclear deals, and India-Myanmar relations.

India's need for gas is immense, and the pipeline is a more beneficial undertaking than
the nuclear deal, despite the fact that the Americans are unhappy with the potential
partnership. In her view, the creation of the pipeline will also be crucial in creating
stability in the region by making all the countries involved interdependent.

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Regarding the US-Indo nuclear deal this has little to do with energy, and is more a
means through which India can gain “great power status” and reverse its “exile” status
as a nuclear power.

Dr. Lall ended by discussing relations between India and Myanmar. The Chinese
presence in Burma has limited India’s influence, she said, and India has been unable
to tap into Myanmar's gas resources, where as China has moved rapidly and
decisively to extend its sphere of influence there

Oil and Natural Gas in Conflict - Southeast Asia

2009

Burma, Border Build Up (October 21, 2009)

Bangladesh, Burma and India all lay claim to potentially lucrative oil and gas fields in
the Bay of Bengal. The maritime dispute between the countries is a source of
increasing tension. Bangladesh has asked the United Nations to mediate, and Burma
has approached the Commission on the Limits of the Continental Shelf, a technical
body, to investigate. In the mean time, oil companies persist in their exploration
projects. The strain caused by the dispute is not confined to maritime law - it impacts
regional politics also - in particular the status of refugees along the Bangladesh/Burma
border.

Total Impact: The Human Rights, Environmental, and Financial Impacts of


Total and Chevron's Yadana Gas Project in Military-Ruled Burma
In this in-depth report, EarthRights International uncovers how the Yadana pipeline
project operated by Chevron and Total in Burma has been responsible for keeping the
Burmese military regime financially solvent. The multi-billion dollar profits generated
by the project are deposited in bank accounts abroad, enabling the junta to ignore
international pressure and deny democratic demands from the Burmese people. This
report establishes a direct link between the regimes' gas revenues and its authoritarian
behavior.

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Burmese Villagers 'Forced To Work On Total Pipeline' (August 14, 2009)
Foreign companies' investment in Burma's oil and gas is coming under international
scrutiny following the junta's decision to further detain opposition leader Aung San
Suu Kyi. French energy company Total faces accusations of using Burmese villagers
as forced labor to build a pipeline transporting gas from Burma to Thailand. An
upcoming report by EarthRights International suggests that the Burmese regime is
earning hundred of millions of dollars from the project. (The Independent)

2004

Oil and Gas Impasse Sours Relations (December 3, 2004)


Tensions remain high between Australia and East Timor over control of their sea
border, which dictates how the two will divide oil and natural gas profits. East
Timor's Foreign Minister Jose Ramos-Horta calls for a non-binding hearing from the
International Court of Justice on the matter, but Canberra has thus far refused.
Observers say Australia signed agreements benefiting East Timor just long enough for
international attention to recede, and now seeks to exploit its poorer neighbor's natural
resources riches. (Inter Press Service)

Australia's Offshore Oil Grab in the Timor Gap (December 2004)


Le Monde Diplomatique details the long-standing dispute over maritime frontiers
between Australia and East-Timor and exposes an intricate web of state and corporate
oil interests in the boundary negotiations. Following East Timor's independence in
2002, the United Nations Transitional Administration renegotiated the maritime
boundaries fixed under Indonesian occupation. Oil companies pressured East Timor
to strike an agreement, as Australia threatened to withdraw aid to the UN-
administered area if it did not receive a large share of royalties.

Australia Casts a Shadow over East Timor's Future (June 3, 2004)


Australia refuses to defer to international law in resolving the sea border dispute with
East Timor, claiming it is "exceedingly generous" in giving Dili a huge share of the
oil and natural gas resources in the joint development area. Deploring the Australian
government's stance, Senator Bob Brown accuses the government of "behaving like a
wealthy neighbour that has jumped the fence and pinched vegetables from the garden
of the poor family next door." (Independent)

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Indonesia's Wars Over Riches (March 9, 2001)
By providing the Indonesian government with the incentive and the justification for
heightening its military presence in the province, oil and natural gas in Aceh have
helped to fuel the ongoing separatist conflict. (Christian Science Monitor)

Throughout much of the Cold War, Iraq had been an ally of the Soviet Union, and
there was a history of friction between it and the United States. The U.S. was
concerned with Iraq's position on Israeli–Palestinian politics, and its disapproval of
the nature of the peace between Israel and Egypt.

The United States also disliked Iraqi support for various Arab and Palestinian
militant groups such as Abu Nidal, which led to its inclusion on the developing U.S.
list of state sponsors of international terrorism on 29 December 1979. The U.S.
remained officially neutral after the invasion of Iran, which became the Iran–Iraq
War, although it assisted Iraq covertly. In March 1982, however, Iran began a
successful counteroffensive - Operation Undeniable Victory, and the United
States increased its support for Iraq to prevent Iran from forcing a surrender.

In a U.S. bid to open full diplomatic relations with Iraq, the country was removed
from the U.S. list of state sponsors of terrorism. Ostensibly this was because of
improvement in the regime’s record, although former United States Assistant
Secretary of Defense Noel Koch later stated, "No one had any doubts about [the
Iraqis'] continued involvement in terrorism... The real reason was to help them
succeed in the war against Iran."[18]

With Iraq's new found success in the war, and its rebuff of a peace offer in July, arms
sales to Iraq reached a record spike in 1982. An obstacle, however, remained to any
potential U.S.-Iraqi relationship - Abu Nidal continued to operate with official support
inBaghdad. When Iraqi President Saddam Hussein expelled the group to Syria at the
United States' request in November 1983, theReagan administration sent Donald
Rumsfeld to meet President Hussein as a special envoy and to cultivate ties.

Gulf war sanctions

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On 6 August 1990, after the Iraqi invasion of Kuwait, the U.N. Security Council
adopted Resolution 661 which imposed economic sanctions on Iraq, providing for a
full trade embargo, excluding medical supplies, food and other items of humanitarian
necessity, these to be determined by the Security Council sanctions committee. From
1991 until 2003 the effects of government policy and sanctions regime led
to hyperinflation, widespread poverty and malnutrition.

During the latter part of the 1990s the UN considered relaxing the sanctions imposed
because of the hardships suffered by ordinary Iraqis. According to UN estimates,
between 500,000 and 1.2 million children died during the years of the sanctions. The
United States used its veto in the UN Security Council to block the proposal to lift the
sanctions because of the continued failure of Iraq to verify disarmament. However,
an oil for food program was established in 1996 to ease the effects of sanctions.

Media coverage:

In the United States, the "big three" network anchors led the network news coverage
of the war: ABC's Peter Jennings, CBS's Dan Rather, and NBC's Tom Brokaw were
anchoring their evening newscasts when air strikes began on 16 January 1991.

On CBS, viewers were watching a report from correspondent Allen Pizzey, who was
also reporting from Baghdad, when the war began. Rather, after the report was
finished, announced that there were unconfirmed reports of flashes in Baghdad and
heavy air traffic at bases in Saudi Arabia. On the "NBC Nightly News",
correspondent Mike Boettcher reported unusual air activity in Dhahran, Saudi Arabia.
Moments later, Brokaw announced to his viewers that the air attack had begun.

Still, it was CNN which gained the most popularity for their coverage, and indeed its
wartime coverage is often cited as one of the landmark events in the development of
the network. CNN correspondents John Holliman and Peter Arnett and CNN
anchor Bernard Shaw relayed audio reports from the Al-Rashid Hotel as the air strikes
began. The network had previously convinced the Iraqi government to allow
installation of a permanent audio circuit in their makeshift bureau. When the
telephones of all of the other Western TV correspondents went dead during the
bombing, CNN was the only service able to provide live reporting. After the initial
bombing, Arnett remained behind and was, for a time, the only American TV
correspondent reporting from Iraq.

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Newspapers all over the world also covered the war and Time magazine published a
special issue dated 28 January 1991, the headline "WAR IN THE GULF" emblazoned
on the cover over a picture of Baghdad taken as the war began.

U.S. policy regarding media freedom was much more restrictive than in the Vietnam
War. The policy had been spelled out in a Pentagon document entitled Annex Foxtrot.
Most of the press information came from briefings organised by the military. Only
selected journalists were allowed to visit the front lines or conduct interviews with
soldiers. Those visits were always conducted in the presence of officers, and were
subject to both prior approval by the military and censorship afterward. This was
ostensibly to protect sensitive information from being revealed to Iraq. This policy
was heavily influenced by the military's experience with the Vietnam War, in which
public opposition within the United States grew throughout the course of the war.

At the same time, the coverage of this war was new in its instantaneousness. About
halfway through the war, Iraq's government decided to allow live satellite
transmissions from the country by Western news organizations, and U.S. journalists
returned en masse to Baghdad. Tom Aspell of NBC, Bill Blakemore of ABC, and
Betsy Aaron of CBS filed reports, subject to acknowledged Iraqi censorship.
Throughout the war, footage of incoming missiles was broadcast almost immediately.

A British crew from CBS News (David Green and Andy Thompson), equipped with
satellite transmission equipment traveled with the front line forces and, having
transmitted live TV pictures of the fighting en route, arrived the day before the forces
in Kuwait City, broadcasting live television from the city and covering the entrance of
the Arab forces the following day.

Iraq emerged from its war with Iran with a huge financial debt and a desperate need
for money to pay for reconstruction. With oil revenues as virtually its only source of
income, Iraq favoured using the OPEC cartel to push up the price of oil by restricting
its supply. Since this was in the interests of a number of other OPEC members,
including Iran, some move in this direction was agreed. However, two countries in
particular—Kuwait and the United Arab Emirates—failed to apply this. They
consistently exceeded their quotas, so preventing the price of oil from rising.

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The reason why the emirs and sheiks and sultans of the Gulf pursued this policy was
not shortsightedness or cussedness. It was because it had become in their economic
interest to do so. Most of it had been re-invested in capitalist industry and finance in
the West, so much so in fact that a large part of Kuwait's income came from these
investments. In other words, the Kuwaiti and other Gulf
rulers had become Western capitalists themselves and not just oil frontiers—with the
same interest in not having too high a price for oil.

The mainstream media plays a major role in the formulation of American foreign
policy, the New York Times, the Washington Post and virtually every other
mainstream media outlet like propaganda providers than professional journalism
organizations. And, though a palpable anti-Iran bias is a constant presence on editorial

American mainstream media have proclaimed the traditional journalistic role as the
"fourth branch of government" and its former values of fairness, commitment to facts
and objectivity to be old fashioned and inappropriate for today's "more pragmatic
world." Just as Bush White House Justice Department flippantly labelled the anti-
torture regulations of the Geneva Conventions as "quaint and out of touch," factual
journalism seems to have also been declared "inappropriate" for today's style of
journalism.

Over the last four years, policymakers in the United States and abroad have been
engaged in a frustrating search for a strategy to deal with the challenge that Iran poses
to Western interests in the Persian Gulf and the Middle East, more broadly. At the risk
of being too simplistic, the debate that has emerged pits those who, citing overlapping
interests and little choice given Washington’s weakened strategic position want to
“engage” Iran against those who believe that the clerical regime is unredeemable and
thus confrontation is necessary to secure U.S. interests. Although there are many
knowledgeable people involved in the informal deliberations being played out on op-
ed pages, policy journals, and opinion magazines, the discussion has become a
debilitating exercise in polemics instead of a well-developed policy analysis.

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