[Paleopsych] "Whoever controls Iraqi oil controls Iraq's destiny,"
guavaberry at earthlink.net
Tue Aug 17 00:25:14 UTC 2004
America's Achilles' heel
The insurgents in Iraq know that keeping its oil flowing is crucial to U.S.
success in the war -- and they're doing all they can to muck things up.
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By Robert Bryce
Aug. 16, 2004 | Last month, Defense Secretary Donald Rumsfeld assured
Americans that Iraq "continues to calm down." But the bitter reality is
that America is losing the war in Iraq. And it's not just because the
interim Iraqi government can't stop the suicide bombers or prevail over the
soldiers loyal to Shiite rebel leaders like Muqtada al-Sadr. It's also
because neither the U.S. nor the interim Iraqi government can control the
flow of Iraq's oil.
The bad news from the oil fields continued last week when men loyal to
Sadr surrounded several Iraqi government buildings and threatened to attack
pipelines and other oil facilities unless the government stopped pumping
oil through the pipes that feed Iraq's oil export terminals in the Persian
Gulf, Mina al-Bakr and Khor al-Amaya. (Mina al-Bakr was built by
Halliburton for the new Baathist government in the mid-1970s, when the
United States did not have diplomatic relations with Iraq.) The Iraqi
government reportedly stopped pumping oil in an effort to stem unrest in
Basra, a city that for months has been viewed as more pro-Western than
Saboteurs also bombed one of the two main pipelines that feed the
terminals. Repair crews had the 48-inch line fixed by Aug. 11, but it was
unclear when -- or if -- the pipeline would be put back into service. Every
day that the Persian Gulf terminals are shut, it costs the Iraqi government
at least $50 million in lost oil revenue.
The situation in the northern oil fields is even worse. The easiest way
to move oil from the oil-rich fields near Kirkuk to market is through a
pipeline that runs to the Turkish port at Ceyhan. But ever since U.S.
forces invaded Iraq, that pipeline has suffered more hits than Mike Tyson.
The pipeline has been bombed so frequently that Iraqi officials are openly
talking about shutting it down.
Indeed, most of the news from Iraq's oil sector, despite some $2.3
billion in investment by the United States in the months since Saddam
Hussein was deposed, has been bad. Recent figures show that oil production
now approaches 2.3 million barrels of oil per day. Exports have reached
about 1.9 million barrels per day -- a fraction of the amount Iraq was
exporting in the days before the first Iraq war in 1991. Although the
exports are far less than the Pentagon had hoped for, they are helping
Iraq's nascent government stay afloat. And the new regime has been
bolstered by record-high oil prices, which show no sign of abating anytime
soon. On Aug. 13, prices for September delivery of light sweet crude hit a
record high of $45.93 a barrel on the New York Mercantile Exchange.
But along with the rising prices and an increase in production has come a
dramatic increase in the number of insurgents. According to the New York
Times, the number of insurgents in Iraq has grown from 2,500 in April 2003
to some 20,000 today. And those men understand that America's Achilles'
heel in Iraq is oil.
"Whoever controls Iraqi oil controls Iraq's destiny," says A.F. Alhajji,
an oil industry analyst at Ohio Northern University who closely follows the
Persian Gulf. And now, says Alhajji, the insurgents are ensuring that
Iraq's destiny is to continue in chaos. By strangling the country's oil
exports, they are cutting off the lifeblood of Iraq's new government.
Without reliable flows of cash from its oil industry, Iraq will not be able
to rebuild. And the U.S. Congress is unlikely to fund the Iraqi rebuilding
effort unless it shows some results quickly.
Since last June, insurgents have attacked various parts of Iraq's oil
infrastructure at least 90 times. That figure is probably a fraction of the
real number. Gal Luft, executive director of the Institute for the Analysis
of Global Security, a Washington think tank that tracks energy issues, says
the real figure may be twice as high. But the Pentagon is reluctant to talk
about the attacks on oil targets. "Nobody really wants to provide
information because it's a political hot potato," says Luft. According to
IAGS's pipeline watch Web site, there were 90 attacks on oil targets
between June 2003 and early August of this year. On Aug. 5 alone, there
were three attacks, including an additional bombing of the Kirkuk-to-Ceyhan
line. That same day, a bomb hit a gas pipeline that feeds an electricity
plant in Bayji, north of Tikrit.
For the insurgents, pipelines are attractive targets. Some 4,400 miles of
pipelines crisscross Iraq. The Kirkuk-to-Ceyhan line -- which, according to
IAGS, has been bombed 11 times in the past 15 months -- has become the
insurgents' favorite target. (Other sources say that pipeline is being
bombed much more frequently -- at least once a week, sometimes more.) The
ongoing cost of repairing the Kirkuk-to-Ceyhan line and the nearly
impossible task of protecting it from further attacks are two reasons Iraqi
officials have considered shutting it down, a move that makes sense to
Alhajji. "It's not worth it anymore," he says, adding that the expense of
patrolling the line, combined with the lost oil and repair costs, has made
the pipeline expendable.
But shutting down the Kirkuk-to-Ceyhan line would have negative
repercussions for both the Turks and the Kurds. The Kurds, who have been
the most reliable supporters of the American invasion, are very concerned
about losing the revenue that comes from the oil fields in northern Iraq.
If that revenue stops flowing, the Kurds will lose a powerful voice at the
bargaining table. The Turkish government, which is nominally pro-American,
will be angered if the pipeline is shut down because the Turks are paid
transit fees on oil shipped through the line. And there's another danger:
Closing the northern export route would enable insurgents to concentrate
all their disruptive efforts on the pipelines and pumping stations in the
central and southern parts of the country, which feed the Persian Gulf oil
Furthermore, if the line is shut down, there is a real possibility that
it could be looted, just as other parts of the Iraqi oil industry were
looted in the weeks after American troops got to Baghdad. If pumps and
other parts are stolen, the Iraqi government will be limited to exporting
its oil through the Persian Gulf for months, if not years, after order
returns to the country.
President Bush and his administration don't like to talk about Iraq's oil
-- at least not in the context of a justification for the war. In November
2002, in an interview with Steve Croft on "60 Minutes," Rumsfeld asserted
that the then-looming Iraq war had "nothing to do with oil, literally
nothing to do with oil."
Despite Rumsfeld's pronouncement, it's clear that oil has always been the
key factor in America's relationship with Iraq. During the Gulf War, George
H.W. Bush kept to his script that the war was "not about oil." Yet his own
secretary of state, James Baker, a Texan with deep ties to the oil
industry, didn't get the memo advising him to stick with the script. On
Nov. 13, 1990, Baker held a press conference during which he said that the
"economic lifeline of the industrial world runs from the [Persian] Gulf,
and we cannot permit a dictator such as this to sit astride that economic
lifeline. And to bring it down to the level of the average American
citizen, let me say that means jobs. If you want to sum it up in one word,
it's jobs. Because an economic recession worldwide, caused by the control
of one nation, one dictator if you will, of the West's economic lifeline
will result in the loss of jobs on the part of American citizens."
On Jan. 15, 1991, just before the United States began attacking Saddam's
forces in Kuwait, Bush signed a national security directive.
The very first line of the recently declassified directive declared,
"Access to Persian Gulf oil and the security of key friendly states in the
area are vital to U.S. national security." It goes on to say that America
"remains committed to defending its vital interest in the region, if
necessary through the use of military force, against any power with
interests inimical to our own."
Oil was a key factor in the second Iraq war from the get-go. The first
combat took place on March 20, 2003, when several groups of Navy SEALs
stormed the Mina al-Bakr and Khor al-Amaya oil terminals. By controlling
the oil terminals, the Pentagon was able to ensure that it would eventually
control Iraq's oil exports.
A week later, on March 27, Deputy Defense Secretary Paul Wolfowitz told
Congress that the war wouldn't be overly expensive. "We're dealing with a
country that can really finance its own reconstruction, and relatively
soon." He continued, saying "the oil revenues of that country could bring
between $50 and $100 billion over the course of the next two or three years."
A few weeks later, Wolfowitz compared America's reaction to the threat of
nuclear weapons being developed by North Korea with the situation in Iraq.
"Let's look at it simply," he said. "The most important difference between
North Korea and Iraq is that economically, we just had no choice in Iraq.
The country swims on a sea of oil."
Leaders of al-Qaida have been talking about the oil issue for years. In
interviews with Western reporters a few years ago, Osama bin Laden
repeatedly referred to what he called the "rape" and "plunder" of Saudi
Arabia's oil by the United States. In 2002, after al-Qaida operatives
bombed the French oil tanker Limburg off the coast of Yemen, the terror
group released a statement that said, "The Mujahadeen hit the secret line
-- the provision line -- and the feeding to the artery of the life of the
On April 24 of this year, three bomb-laden boats piloted by suicide
bombers attacked both of Iraq's oil terminals in the Persian Gulf. None of
the boats hit their targets, but the attacks killed two U.S. Navy sailors
and injured four others. Two days after the attacks, al-Qaida leader Abu
Musab al-Zarqawi issued a statement that said, "We tell you enemies of God,
robbers of oil and riches and drug traders ... O snakes of evil, we will
exterminate and debilitate you by land, sea and air until God makes us
victorious or until we die."
The attempted bombings of the oil terminals were the first waterborne
suicide attacks on American forces since 2000, when al-Qaida engineered the
attack on the USS Cole in Yemen, which killed 17 American sailors.
Al-Zarqawi reminded the world of the attack on the USS Cole, saying that
his loyalists "have repeated this attack in a new garb and with stubborn
determination by striking vital economic links of the infidel and atheist
One week after the attack on the terminals, Saudi gunmen killed two
Americans, two Brits and an Australian who were working for ABB Lummus in
the oil town of Yanbu, Saudi Arabia's most important port on the Red Sea.
On May 29, al-Qaida assassins attacked an oil industry complex in Khobar,
Saudi Arabia. That attack left 22 people dead. After the Khobar attack,
al-Qaida leader Abdul Aziz al-Moqrin (now believed to be dead) said the
attack was carried out because Saudi leaders have been providing "America
with oil at the cheapest prices according to their masters' wish, so that
their economy does not collapse."
The Iraqi government and the Pentagon are doing all they can to protect
Iraq's oil infrastructure. More than 14,000 security personnel are now
working for Erinys, a South African private security firm that has a $39
million contract to guard Iraq's pipelines, pumping stations, refineries
and oil wells. But given the results so far, Erinys may need an additional
estimated 14,000 guards.
Mike Ameen, a Houston-based oil executive, is not optimistic about the
future of Iraq's oil economy. Ameen has spent decades working in the Middle
East. He speaks, reads and writes Arabic and has recently worked as a
consultant for the U.S. government on the Iraqi oil business. Ameen says
that by targeting the oil infrastructure, the insurgents are making it far
more expensive for oil field contractors to do business in Iraq. They are
also preventing any major oil companies from even considering new
investments in Iraq. "It's a gloomy picture -- it really is," says Ameen.
Unfortunately, that gloomy picture shows no sign of improving anytime soon.
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