The spoils of war
John Fletcher
For The Calgary Herald
Sunday, March 23, 2003
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'Oil is a curse that brings foreign armies." At this defining moment in history, this Iraqi expression has never been truer. Now, the long-suffering Iraqi people have death and destruction raining down upon them in the name of freedom and democracy.
Using as its "casus belli" the unproven allegation Iraq still possesses weapons of mass destruction and therefore constitutes a clear and present danger to the United States of America, the current imperialistic American administration embarked upon an unjust pre-emptive war.
In launching its war of aggression without international authority, the American administration not only lays waste on Iraq, with its depleted uranium weaponry, but also smashes the present rules of international law and forever damages our fundamental multilateral institutions such as the United Nations and NATO.
In my view, one of the main reasons this American administration is turning our world upside down is to ensure the United States controls much of the world's oil supply for the foreseeable future.
The United States imports half of its oil needs. To sustain economic growth, the United States must secure reliable oil and gas supplies available at reasonable prices.
With two-thirds of the world's known oil reserves in the Middle East, the United States long ago declared as a national strategic directive it will ensure the free flow of oil from the Persian Gulf. Apparently, the new "Bush Doctrine" is to seize by military force the oil needed for the United States' economy.
The economic prize of Iraq is a bonanza for the United States.
Iraq has the second-largest proven oil reserves in the world after Saudi Arabia, totaling 112 billion barrels, representing at least 10 per cent of the world's total.
The U.S. Energy Department estimates an additional 215 billion barrels with respect to Iraq's probable and possible reserves.
Furthermore, Iraq's natural gas reserves are the 10th largest in the world with more than 110 trillion cubic feet of proven reserves and with probable gas reserves of 160 trillion cubic feet.
Low exploration and development costs, as well as relatively inexpensive transportation charges, make Iraq an oilman's paradise.
Iraq is capable of producing about 2.8 million barrels of oil per day under optimum conditions. To increase oil production, an American-dominated Iraqi Ministry of Oil will likely pursue Iraq's present development plan.
This plan involves the co-operation and assistance of foreign oil companies to invest an estimated $30 billion US to raise and maintain total Iraqi production to three million barrels a day within one year, then to four million barrels a day within two years and, finally, to six million barrels a day within five years.
However, outside of OPEC and under the control of the United States, it is quite possible for Iraq to produce up to 10 million barrels a day within a decade with the support of international oil companies.
The American administration estimates the war will cost about $100 billion US. Victors use the resources of the conquered to pay for the war and so it is likely the United States will utilize the Iraqi oil to pay for this American war.
Until this week, Iraq was capable of producing annual revenues of about $20 billion US (based upon exports of 2.2 million barrels of oil per day at $25 US per barrel), of which $5 billion US went to Kuwait for war reparations from the 1991 Gulf War as well as to cover the costs of all United Nations operations related to Iraq.
As Iraq requires $15 billion US to finance its annual domestic expenditures, there will be nothing left for reconstruction or to pay back its $120 billion US in foreign debts.
At this rate, Iraq will take years to pay the cost of the present war to the United States while never increasing Iraq's standard of living or reducing its other foreign debts. This financial yoke subjugates Iraq and its people for the foreseeable future while the United States Army likely will occupy an unhappy Iraq until the American war debt is repaid.
Future events may conspire to keep oil prices high. Whenever the dogs of war are unleashed, no one knows what will happen.
My pessimistic view of the future of Iraq is one of large-scale human suffering, while, outside Iraq, I foresee huge antiwar protests and increased terror against the United States. Iraq is the powder keg of the Middle East and the government of the United States has just ignited it.
Once the United States and the United Kingdom control Iraq's oil wealth, American and British oil companies will get the lion's share of the spoils of war. This very week, the major oil companies, Shell and British Petroleum, lobbied the British government to ensure they get their fair allocation vis-a-vis their American counterparts.
John Fletcher is the head of Fletcher Law Firm in Calgary, a retired colonel in the Canadian Army Reserve and, as the former vice-president, Legal and Corporate Affairs, of Ranger Oil Ltd., he visited Iraq 37 times in the past eight years.
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