Eager to Tap Iraq's Vast Oil Reserves,
Industry Execs Suggested Invasion
by Jason Leopold
Two years before the invasion of Iraq,
oil executives and foreign policy advisers told the Bush administration
that the United States would remain "a prisoner of its energy
dilemma" as long as Saddam Hussein was in power.
That April 2001 report, "Strategic
Policy Challenges for the 21st Century," was prepared by
the James A. Baker Institute for Public Policy and the U.S. Council
on Foreign Relations at the request of then-Vice President Dick
In retrospect, it appears that the report
helped focus administration thinking on why it made geopolitical
sense to oust Hussein, whose country sat on the world's second
largest oil reserves.
"Iraq remains a de-stabilizing influence
to the flow of oil to international markets from the Middle East,"
the report said.
"Saddam Hussein has also demonstrated
a willingness to threaten to use the oil weapon and to use his
own export program to manipulate oil markets. Therefore the U.S.
should conduct an immediate policy review toward Iraq including
military, energy, economic and political/diplomatic assessments.
"Like it or not, Iraqi reserves represent
a major asset that can quickly add capacity to world oil markets
and inject a more competitive tenor to oil trade."
The advisory committee that helped prepare
the report included Luis Giusti, a Shell Corp. non-executive director;
John Manzoni, regional president of British Petroleum; and David
O'Reilly, chief executive of ChevronTexaco. __James Baker, the
namesake for the public policy institute, was a prominent oil
industry lawyer who also served as Secretary of State under President
George H.W. Bush and was counsel to the Bush/Cheney campaign during
the Florida recount in 2000.__Ken Lay, then chairman of the energy-trading
Enron Corp., also made recommendations that were included in the
Baker report.__At the time of the report, Cheney was leading an
energy task force made up of powerful industry executives who
assisted him in drafting a comprehensive "National Energy
Policy" for President George W. Bush.
A Focus on Oil __It was believed then
that Cheney's secretive task force was focusing on ways to reduce
environmental regulations and fend off the Kyoto protocol on global
But Bush's first Treasury Secretary, Paul
O'Neill, later described a White House interest in invading Iraq
and controlling its vast oil reserves, dating back to the first
days of the Bush presidency.
In Ron Suskind's 2004 book, The Price
of Loyalty, O'Neill said an invasion of Iraq was on the agenda
at the first National Security Council. There was even a map for
a post-war occupation, marking out how Iraq's oil fields would
be carved up.
O'Neill said even at that early date,
the message from Bush was "find a way to do this," according
to O'Neill, a critic of the Iraq invasion who was forced out of
his job in December 2002.
The New Yorker 's Jane Mayer later made
another discovery: a secret NSC document dated Feb. 3, 2001 -
only two weeks after Bush took office - instructing NSC officials
to cooperate with Cheney's task force, which was "melding"
two previously unrelated areas of policy: "the review of
operational policies towards rogue states" and "actions
regarding the capture of new and existing oil and gas fields."
[The New Yorker, Feb. 16, 2004]
By March 2001, Cheney's task force had
prepared a set of documents with a map of Iraqi oilfields, pipelines,
refineries and terminals, as well as two charts detailing Iraqi
oil and gas projects, and a list titled "Foreign Suitors
for Iraqi Oilfield Contracts," according to information released
in July 2003 under a Freedom of Information Act lawsuit filed
by the conservative watchdog group, Judicial Watch.
__A Commerce Department spokesman issued
a brief statement when those documents were released stating that
Cheney's energy task force "evaluated regions of the world
that are vital to global energy supply."__There has long
been speculation that a key reason why Cheney fought so hard to
keep his task force documents secret was that they may have included
information about the administration's plans toward Iraq.
'Conspiracy Theory'__However, both before
and after the invasion, much of the U.S. political press treated
the notion that oil was a motive for invading Iraq in March 2003
as a laughable conspiracy theory.
Generally, business news outlets were
much more frank about the real-politick importance of Iraq's oil
For instance, Ray Rodon, a former executive
at Halliburton, the oil-service giant that Cheney once headed,
said he was dispatched to Iraq in October 2002 to assess the country's
oil infrastructure and map out plans for operating Iraq's oil
industry, according to an April 14, 2003 story in Fortune magazine.
"From behind the obsidian mirrors
of his wraparound sunglasses, Ray Rodon surveys the vast desert
landscape of southern Iraq's Rumailah oilfield," Fortune's
story said. "A project manager with Halliburton's engineering
and construction division, Kellogg Brown & Root, Rodon has
spent months preparing for the daunting task of repairing Iraq's
"Working first at headquarters in
Houston and then out of a hotel room in Kuwait City, he has studied
the intricacies of the Iraqi national oil company, even reviewing
the firm's organizational charts so that Halliburton and the Army
can ascertain which Iraqis are reliable technocrats and which
are Saddam loyalists."
At about the same time as Rodon's trip
to Iraq - October 2002 - Oil and Gas International, an industry
publication, reported that the State Department and the Pentagon
had put together pre-war planning groups that focused heavily
on protecting Iraq's oil infrastructure.__The next month, November
2002, the Department of Defense recommended that the Army Corps
of Engineers award a contract to Kellogg, Brown & Root to
extinguish Iraqi oil well fires.
The contract also called for "assessing
the condition of oil-related infrastructure; cleaning up oil spills
or other environmental damage at oil facilities; engineering design
and repair or reconstruction of damaged infrastructure; assisting
in making facilities operational; distribution of petroleum products;
and assisting the Iraqis in resuming Iraqi oil company operations."__In
January 2003, as President Bush was presenting the looming war
with Iraq as necessary to protect Americans, the Wall Street Journal
reported that oil industry executives met with Cheney's staff
to plan the post-war revival of Iraq's oil industry. __"Facing
a possible war with Iraq, U.S. oil companies are starting to prepare
for the day when they may get a chance to work in one of the world's
most oil-rich countries," the Journal reported on Jan. 16,
"Executives of U.S. oil companies
are conferring with officials from the White House, the Department
of Defense and the State Department to figure out how best to
jump-start Iraq's oil industry following a war, industry officials
say.__"The Bush administration is eager to secure Iraq's
oil fields and rehabilitate them, industry officials say. They
say Mr. Cheney's staff hosted an informational meeting with industry
executives in October , with Exxon Mobil Corp., ChevronTexaco
Corp., ConocoPhillips and Halliburton among the companies represented.
"Both the Bush administration and
the companies say such a meeting never took place. Since then,
industry officials say, the Bush administration has sought input,
formally and informally, from executives and industry experts
on how best to overhaul Iraq's oil sector."
Guarding the Oil Ministry
Despite the Bush administration's denials
about oil as a motivation for war, the Bush administration's focus
on Iraqi oil was firmly set.
On April 5, 2003, Reuters reported that
the State Department's "Future of Iraq" project headed
by Thomas Warrick, special adviser to the Assistant Secretary
of State for Near Eastern Affairs, held its fourth meeting of
the oil and energy-working group. __Documents obtained by Reuters
showed that "a clear consensus among expert opinion favoring
production-sharing agreements to attract the major oil companies."__"That
is likely to thrill oil companies harboring hopes of lucrative
contracts to develop Iraqi oil reserves," the news agency
reported. "Short-term rehabilitation of southern Iraqi oil
fields already is under way, with oil well fires being extinguished
by U.S. contractor Kellogg Brown and Root ...
"Long-term contracts are expected
to see U.S. companies ExxonMobil, ChevronTexaco and ConocoPhillips
compete with Anglo-Dutch Shell, Britain's BP, TotalFinaElf of
France, Russia's LUKOIL and Chinese state companies."
After U.S. troops captured Baghdad in
April 2003, they were ordered to protect the Oil Ministry even
as looters ransacked priceless antiquities from Iraq's national
museums and stole explosives from unguarded military arsenals.
In April 2001, the report laid out a series
of unacceptable options, including helping Iraq under Saddam Hussein
extract more oil by easing embargoes that were meant to hem Hussein
"The U.S. could consider reducing
restrictions on oil investment inside Iraq," the report said.
But if Hussein's "access to oil revenues was to be increased
by adjustments in oil sanctions, Saddam Hussein could be a greater
security threat to U.S. allies in the region if weapons of mass
destruction, sanctions, weapons regimes and the coalition against
him are not strengthened."__Iraq is a "key swing producer
turning its taps on and off when it has felt such action was in
its strategic interest," the report said, adding that there
even was a ''possibility that Saddam Hussein may remove Iraqi
oil from the market for an extended period of time'' in order
to drive up prices.__"Under this scenario, the United States
remains a prisoner of its energy dilemma, suffering on a recurring
basis from the negative consequences of sporadic energy shortages,"
the report said. "These consequences can include recession,
social dislocation of the poorest Americans, and at the extremes,
a need for military intervention."__The report recommended
Cheney move swiftly to integrate energy and national security
policy as a means to stop ''manipulations of markets by any state"
and suggested that his task force include "representation
from the Department of Defense."__"Unless the United
States assumes a leadership role in the formation of new rules
of the game,'' the report said, ''U.S. firms, U.S. consumers and
the U.S. government [will be left] in a weaker position."
Two years after the Baker report, the
United States - along with Great Britain and other allies - invaded
Iraq. Now, more than six years after that, the U.S. oil industry
finally appears to be in a strong position relative to Iraq's
However, the price that has been paid
by American troops, Iraqi civilians and the U.S. taxpayers has