Andrew Hamm: the Bipolar Express

Ruminations on theatre, music, and just about anything else that crosses my bipolar brain.

Thursday, May 24, 2007

"No Blood for Oil" Examined

Warning: extremely boring content.

Any time we debate the Iraq war, and the U.S. presence in the Middle East in general, the topic of soldiers "dying for oil" always comes up. The argument is that oil is not a resource worth fighting wars over, that innocent Arabs and young, promising American soldiers should not have their blood spilled for oil.

First of all, I want to be very clear about this: There is no resource, conflict, or issue that justifies starting a war. Initiating violence to gain control of a resource, whether it be actual or intellectual, is never appropriate. However, fighting for purposes of defense, reasonable pre-emption, or to enforce international law is a different matter. I believe we are pursuing all three of those objectives in Iraq and Afghanistan. Rather than defend that idea in this column, I would refer you to articles by much better writers than myself: Senator Joe Lieberman, Bob Kerrey, and Orson Scott Card.

But I want to look at the "no blood for oil" argument here. I should say straight out that this appeal has never really resonated with me. It strikes me as an emotional argument rather than a rational one, and while I appreciate the value of taking an emotional, intuitive, or moral stance on a logical issue (I do, after all, believe God became man, died for the sins of all humankind, and rose from the dead), I refuse to discount reason entirely. It's a fallacy that numbers don't lie, but they are often very illustrative.

So let’s look at some numbers from the U.S. Energy Information Administration.

Top World Oil Net Exporters, 2006

Country / Net Oil Exports (million barrels per day)
1) Saudi Arabia: 8.7
2) Russia: 6.6
3) Norway: 2.5
4) Iran: 2.5
5) United Arab Emirates: 2.5
6) Venezuela: 2.2
7) Kuwait: 2.1
8) Nigeria: 2.1
9) Algeria: 1.8
10) Mexico: 1.7
11) Libya: 1.5
12) Iraq: 1.4
13) Angola: 1.4
14) Kazakhstan: 1.1
15) Canada: 1.1

Table includes all countries with net exports exceeding 1 million barrels per day in 2006.

So we can see that Iraq is the 12th-largest oil exporter in the world. Pretty impressive. There's a lot of money to be made with that oil on the international market. But let's look at total production:

Top World Oil Producers, 2006

Country / Total Oil Production (million barrels per day)
1) Saudi Arabia: 10.7
2) Russia: 9.7
3) United States: 8.4
4) Iran: 4.1
5) China: 3.8
6) Mexico: 3.7
7) Canada: 3.3
8) United Arab Emirates: 2.9
9) Venezuela: 2.8
10) Norway: 2.8
11) Kuwait: 2.7
12) Nigeria: 2.4

13) Brazil: 2.2
14) Algeria: 2.1
15) Iraq: 2.0

Table includes all countries total oil production exceeding 2 million barrels per day in 2006.

Total Oil Production includes crude oil, natural gas liquids, condensate, refinery gain, and other liquids.

When it comes to total production, Iraq falls a bit, down to 15th place. So they're holding onto 30% of their oil for domestic usage. Compare that to the United States, which exports virtually no oil whatsoever. Greedy Republican bastards!

For the last table, I regret that I only have 2005 data. I am going to assume that 2005 and 2006 will be similar enough for purposes of comparison. Obviously, I'm nothing resembling a scientist or statistician; I have two degrees in Theatre for Pete's sake.

This time, we'll look at U.S. imports only.

Top U.S. Oil Imports by Country of Origin , 2005

Country / Total Oil Imports (million barrels per day)

1) Canada: 2.181
2) Mexico: 1.662
3) Saudi Arabia: 1.537
4) Venezuela: 1.529
5) Nigeria: 1.166
6) Iraq: .531
7) Algeria: .478
8) Angola: .473
9) Russia: .410
10) United Kingdom: .396
11) Virgin Islands (U.S.): .328
12) Ecuador: .283
13) Kuwait: .243
14) Norway: .233
15) Colombia: .196

So Iraq, whose oil fields are firmly in the black-gloved fist of the GWBA, is sixth in U.S. oil imports, a very distant sixth behind Canada, Mexico, Saudi Arabia, Venezuela, and Nigeria. Compared to those top five, Iraq is definitively B-list.

The idea that the U.S. is basking in massive amounts of cheap oil brought to our shores only as a result of toppling Saddam Hussein and killing innocent Iraqis and soldiers is demonstrably nonsense. Iraq is a significant oil supplier to the world and the United States, but they are far from being a giant in the industry, and the United States does not hugely benefit from access to Iraqi oil fields.

If you truly believe we’re in Iraq purely or primarily for control over oil, I have three questions for you:

  1. Why aren't we invading a much easier-to-conquer country with a larger or comparable amount of oil? I'm guessing that Angola, Algeria, and Nigeria would all have been easier to subdue, even accounting for the unexpected sectarian violence. If George Bush can "invent" evidence to invade Iraq (evidence that every single other intelligence agency in the world simultaneously "invented"), he can invent evidence to invade Angola, can't he? Hell, Canada even. What are they going to do, throw back bacon at us?
  2. How much does it cost to fill your gas tank these days, because mine is awfully expensive to satisfy. If we're fighting for cheap oil, I hope President Bush invades Angola really soon. This "Invade Iraq to get cheap oil" plan isn't working at all to my satisfaction.
  3. Where do you suppose President Bush hides his cloven hooves and horns when he appears on TV?

Whoops--look out Iran! The GWBA must be manufacturing all that rhetoric from Ahmedinejad about washing the Earth in nuclear fire to prepare for the return of the Mahdi. It's the only way Bush, Cheney, and Haliburton can get their hands on more oil! Mwa-ha-ha-ha-ha-ha-haaaaaaa!

Editorial note: I'm sorry, but I just don't believe that assuming the supposedly draconian intentions of President Bush is accurate, intellectually valid, or remotely useful in any kind of discourse. You can't call him a moron one minute and an evil genius the next. You can't call him incompetent on one hand and Machiavellian on the other. Then again, a recent poll showed that 30% of Democrats believe that President Bush was complicit in the September 11 attacks. It's FDR and Pearl Harbor all over again. It's a logical progression, of course: If he stole the 2000 election, he's capable of anything, right? :rolleyes:

But back to the numbers. Overall, in 2005 we imported 13.7 million barrels of oil a day. Only 2.3 million barrels a day came from the Persian Gulf, primarily from Saudi Arabia (not Iraq). Osama bin Laden and most of the 9/11 hijackers come from Saudi Arabia. Numerous members of the Saudi royal family openly support terrorism, far more than Saddam Hussein and the wealthy widow's bounty the Iraqi despot used to pay to the families of Palestinian suicide bombers. (I'd love to hear someone explain how that isn't openly supporting terrorism.)

Yet somehow, all the diplomatic language between the U.S. and Saudi Arabia is talk of partnership and friendship. How does this happen despite American distress with theocratic Saudi law that brutally oppresses women and features public dismemberment and beheadings? (Where's the NOW and Amnesty International when you need them?) How does this happen despite the massive number of powerful, wealthy international terrorists claiming Saudi citizenship? How does this "partnership" happen when the imperialist infidels have a blasphemous military presence in the nation of Mecca?

The Saudi version of "no blood for oil" could be "no blood for dollars." In America, we tend to disregard the fact that as the oil comes in, something else goes out: massive amounts of money. According to the EIA, Oil export revenues make up 90-95% of Saudi Arabia's export earnings, 70-80% of state revenues, and a whopping 40% of the country's GDP. Dang. Even for the world's largest oil producer, that is a heavy slant on a single resource, and a non-renewable one at that.

The U.S. is a massive customer. If we were to cease and desist from buying Saudi oil, both countries' economies would obviously take downturns. Saudi Arabia provides around 15% of the United States' imported oil (not oil total; this number does not include the U.S.'s own very large oil production). If we stop buying oil from Saudi Arabia, gas prices will go up, and so will the cost of produce and other things we can't even imagine yet.

But Saudi Arabia's economy would collapse. A major pull-out from the country's only significant industry would be a complete economic and humanitarian disaster.

My point? The Saudis need us as much (or very probably much much more) than we need them. And there are a large large number of demonstrably bad guys in power over there, pumping out an endless stream of young fanatics with blood in their eyes and the deaths of Israel and America in their plans.

So I say, if we're going to be outraged about United States policy in the Persian Gulf, perhaps it would be more appropriate to coin a new protest phrase: No diplomacy for oil.

Labels: , ,


  • At 5/24/2007 3:27 PM , Blogger Scott Wichmann said...

    Dick Cheney, speaking as CEO of Halliburton, 1999:

    "By 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from?... While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies."

    Dick Cheney's (as US Vice President) energy task force, 2001:
    "By any estimation, Middle East oil producers will remain central to world oil security. The Gulf will be a primary focus of US international energy policy."

    Ken Derr, Chairman and CEO, Chevron Corporation:
    "Iraq possesses huge reserves of oil and gas -- reserves I'd love Chevron to have access to."

    Archie Dunham, Chairman of ConocoPhillips:
    "We know where the best [Iraqi] reserves are and we covet the opportunity to get those some day."

    Walter van der Vijver, CEO Shell Exploration & Production:
    "International oil companies can make an ongoing contribution to the [Gulf] region... However, in order to secure that investment, we will need some assurance of future income and, in particular, a supportive contractual framework... One option is the greater use of production sharing agreements, which have proved very effective in achieving an appropriate balance of incentives between Governments and oil companies."

    International Tax & Investment Center, representing oil companies BP, Shell, ExxonMobil, ChevronTexaco, ENI and Total, autumn 2004:
    “The most appropriate legal and fiscal form for the facilitation of [Foreign Direct Investment] longer-term development of Iraq's petroleum industry will be a production sharing agreement (PSA).”

    Oil prices and profits have never been higher, and the rate of return on the Production Sharing Agreements for US companies to develop the some fifty-four plus untapped Iraqi oilfields is between 49-140%. That's a pretty sweet deal, I'd say.

    And as far as the whole international community being of one mind that Iraq had WMD and was a direct threat to the US, not everyone was so convinced, no matter what Joe Biden, The Clintons, or Nancy Pelosi & madeline Albright said about it.

    "We had a good discussion, the Foreign Minister and I and the President and I, had a good discussion about the nature of the sanctions -- the fact that the sanctions exist -- not for the purpose of hurting the Iraqi people, but for the purpose of keeping in check Saddam Hussein's ambitions toward developing weapons of mass destruction. We should constantly be reviewing our policies, constantly be looking at those sanctions to make sure that they are directed toward that purpose. That purpose is every bit as important now as it was ten years ago when we began it. And frankly they have worked. He has not developed any significant capability with respect to weapons of mass destruction. He is unable to project conventional power against his neighbors. So in effect, our policies have strengthened the security of the neighbors of Iraq..."

    -Colin Powell, february 24th, 2001.

    "Well, the president has made very clear that he considers Saddam Hussein to be a threat to his neighbors, a threat to security in the region, in fact a threat to international security more broadly. But in terms of Saddam Hussein being there, let's remember that his country is divided, in effect. He does not control the northern part of his country. We are able to keep arms from him. His military forces have not been rebuilt."

    -Condoleeza Rice, July 29th, 2001.

    So in other words, the guy (Saddam) couldn't even keep his own house in order, yet Bush still viewed him as a threat to his neighbors even though he had no army and no WMD capability. Suddenly, the Administration reverses itself and Saddam is a ticking timebomb with every resource at his disposal?? please. The guy wanted nothing to do with Islamic religious fanatics, and he kept the Sunni & Shia from attacking each other for decades. The US Unraveled that situation really fast.

    I've never said Bush was an evil mastermind who is only an incompetent when I need him to be. in fact, I think the whole administration is delusional, and NOT ONE of their PNAC-backed strategies or predictions has come to fruition. I think they painted a rosy picture of the invasion and it's aftermath in their expensive policy papers, underestimated the historical social and religious complexities of the Iraqi populace, cut loose anyone with a dissenting
    viewpoint, and displayed a horrible set of management skills which we continue to pay the price for. They still skate undenounced on this blog for the treasonous outing of a CIA agent who was working on gathering evidence of Iranian WMD capability, which baffles me.

    Bush wanted a lot of things-- To transform the middle east, to grab the Oil fields for long-term US gain, to finish daddy's work, but nothing The Kristol-Wolfowitz-Rice-Bush-Cheney crowd ever said would happen actually happened. Now they beat the drum about Iran in the same doomsday-pr tones and expect to be taken seriously?? I know Achmadinejad is crazy, and I know how messed up Islamic Jihadists are-- I never said they weren't. But this was never about any Iraqi threat, it was about predetermined military opportunism and it was carried out through the manufacture of blatant falsehoods.

    As for the US Oil interests, come on-- it's as plain as day, The New Iraqi Supplemental contains provisions to turn over Iraqi oil interests to US companies. to the victor goes the spoils.

    Kucinich Condemns 'Blood for Oil' Measure

    by Cong. Dennis Kucinich,

    "Kucinich Statement on the Iraq Supplemental Conference Report HR 1591"

    Washington, Apr 25, 2007

    "This "Supplemental" is a plan to extort Iraq's oil wealth under the guise of a plan to end the war. Funds for the security of the Iraqi government are contingent upon Iraq giving up control of oil. This legislation is a repugnant, high pressure tactic to force Iraq to pass a "hydrocarbon act" which will effectively privatize the oil wealth of Iraq. The key deception is that the hydrocarbon act, which sounds like an environmental law, lets Shiites, Sunnis and Kurds "share" whatever is left after US oil companies take unconscionable profits. This bill is not a plan for peace. It is blood for oil. It is a guarantee of more war and the continued U.S. occupation of Iraq."

    The Iraqis Labor Unions apparently feel the same on the topic:

    "Statement issued by the Iraqi Labor Union Leadership at a Seminar held from 10 to 14 December 2006, in Amman, Jordan to discuss the draft Iraqi Oil Law:

    "Iraq is rich in natural wealth, foremost among which is its oil wealth, the essence of the economic life for Iraq and the world, which has been the focus of attention of the large industrialized countries in particular. The British and American oil companies were the first to obtain the concession to extract and invest Iraqi oil, nearly 80 years ago. After Iraq got rid of this octopus network, these foreign oil companies have again attempted to dominate this important oil wealth, under numerous pretexts and invalid excuses.

    Whereas oil and gas are greatly important for the Iraqi economy, and whereas the building of the State and its institutions are dependent on it, as the main source of the national income, it is therefore the right of the Iraqi people to read the draft oil law under consideration. The Iraqi people refuse to allow the future of their oil to be decided behind closed doors.

    Iraqi public opinion strongly opposes the handing of authority and control over the oil to foreign companies, that aim to make big profits at the expense of the people. They aim to rob Iraq’s national wealth by virtue of unfair, long term oil contracts that undermine the sovereignty of the State and the dignity of the Iraqi people.

    For example, through production sharing agreements these companies shall not be subject to the Iraqi courts in the event of any dispute, nor to the general audit, nor to democratic control. The proprietorship of the oil reserves under this draft law will remain with the State in form, but not in substance.

    This means that the occupier seeks and wishes to secure themselves energy resources at a time when the Iraqi people are seeking to determine their own future while still under conditions of occupation.

    Iraq’s labor and professional oil unions, after reading the draft oil law, studying the ideas and opinions contained within, and considering the negative impacts it shall have on the whole Iraqi society, have found this law to contain many deep and complex problems, at the administrative and technical levels.

    These problems are not remedied in this law, which was rapidly prepared without involving Iraqi specialists and experts in the field in an extensive and organized manner satisfactory to all. Unfortunately even the media and the press have not viewed it, and had they done so, their noble pens would have written about it and criticized and analyzed it.

    The draft oil law has overlooked investment of the natural gas that is being burnt off at high rates, causing Iraq to lose millions of dollars everyday, in addition to the environmental pollution this creates.

    We have found a variety of negative points in this draft oil law, some of which undermine the sovereignty of the State. On the level of economics, it will impact the real income of the Iraqi citizen. His income would be low, while at the same time he would have weak purchasing power as the overall national income would be limited, and that would affect all the Iraqi people at the health, developmental, social and economic levels. In addition this law could encourage the termination of the workers services, either by dismissal or by reducing the total volume of workers, or by reducing compensation, among other possible methods.

    There will be a high and insane jump in the fuel prices throughout the country, which would be negatively reflected on the social and economic lives of the Iraqis. The biggest disaster is that there will be an excuse and a pretext for the occupier to extend the stay of the occupying forces in Iraq to protect the foreign oil companies.

    Therefore, the oil law, if not radically remedied, will produce calamities that will cause great damage and deprivation and a large increase in the number of Iraqi families under the poverty line.

    Feeling responsible towards the working class in Iraq and their union representatives, we hereby submit our demands in specific points, the aim of which is to protect the oil wealth and the Iraqi people. We shall mobilize our workers and their families, and seek the assistance of civil society institutions in Iraq, and the Parliament that was elected by the people, to stand by us and assist us in obtaining the support and solidarity of the Arab and International Labor Unions.

    Our demands, which are the demands of the Iraqi people as well as of the Iraqi workers, are as follows :

    First : Not to expedite the issuance of the oil law, which would render the oil wealth seized and exploited by the oil Cartel (the multinational oil companies). We are asking to delay this law until it is well prepared by the Iraqis with expertise in the field of oil, with the participation of legal and economic professors from Iraqi universities, and after extensive consideration by the Iraqi trade unionists and the Oil Professional Unions.

    Second : We are asking that the discussions about the oil law be attended by Labor Union Federations and Oil Professional Unions for the purpose of enriching the ideas and opinions of the legal provisions of the oil law, as these workers have on-the-ground and practical experience to bring to bear on these discussions. This practice of democracy would contribute to the protection of the oil wealth for the coming generations and for the whole country.

    Third : We demand involvement of civil society organizations to contribute their opinions about the law, considering that Article (111) of the Iraqi Constitution specifies that oil and gas are the property of the Iraqi people. It is the property of the people in every place and time. There should be no manipulation of the terms to beautify them at the expense of the Iraqi people.

    Fourth : We trust that our brothers, the members of the Parliament, shall study the draft oil law with accuracy and diligence, and that this law will not be approved with all the defects and negative points it contains, and that they will form specialized committees to study it and submit it to the Iraqi people after their consideration.

    Fifth : We strongly reject the privatization of our oil wealth, as well as production sharing agreements, and there is no room for discussing this matter. This is the demand of the Iraqi street, and the privatization of oil is a red line that may not be crossed.

    Sixth : We call upon the media and press in the spirit of brotherhood to play a role in conveying the facts to the Iraqi people. We are certain that the brothers and sisters in the field of media and press will stand by the Iraqi people to protect the oil wealth from any greedy exploitation.

    Seventh : The Iraqi State and its regions should directly invest in oil and gas, as provided for in the Iraqi Constitution, through the support and development of the Ministry of Oil and its institutions in order to ensure the success of the extraction operations.

    Eighth : Since work is the qualitative activity that sets apart the human experience, and it is the source of all production, wealth, and civilization, and the worker is the biggest asset to the means of production (we honour humanity), we demand that this law includes an explicit reference emphasizing the role of all workers in matters of oil wealth and investment, to protect them and build their technical capacity, both in and outside Iraq.

    Ninth : It is possible to benefit from the experiences, technology and expertise of some foreign oil companies through purely Iraqi work contracts that preserve the sovereignty and standing of the State and the independence of its political and economic decision-making. The State should have the right to terminate these contracts whenever it wants however, under the sole jurisdiction of the Iraqi judiciary.

    Tenth : To rehabilitate the Iraqi National Oil Company, by virtue of a law enacted for this purpose by the Parliament. The Iraqi National Oil company should shoulder the responsibility of Iraqi oil policy."

    The US has no fundamental right to any plundered Iraqi resources. But by standing behind the 'we took the preemptive risk we'll take the reward' ideology, the US and its OPEC pals have carved out a nice little niche for themselves.

    Look out Iran, you're next-- the preemption doctrine wins again!!


Post a Comment

Subscribe to Post Comments [Atom]

<< Home